With the month of Ramadan fast approaching, the familiar annual spiral in the prices of essential commodities has already begun to make itself felt across the country, and with notable intensity.
Containing the seasonal and sporadic surges in the prices of daily necessities has long been a critical test for successive governments. What is particularly striking, however, is that governments of all political stripes have responded in almost the same way whenever the prices of essentials -- especially food items -- begin to rise sharply. The default response has been the deployment of open market sales (OMS) of key commodities through the state-owned Trading Corporation of Bangladesh (TCB). Truckloads of rice, flour, lentils, edible oil and sugar are dispatched to designated locations and sold at subsidised rates, typically in the run-up to Ramadan or during episodes of sudden price escalation. While this approach offers limited and short-term relief to segments of the urban population, it has consistently failed to ensure sustained or broad-based market stability.
Despite its inherent limitations in scale and coverage, the OMS system has endured for decades. Successive governments, perhaps reassured by the symbolic visibility of subsidised essentials being sold on city streets, have continued to rely on this stopgap measure as their principal response to market volatility. The reality, however, is clear: OMS is neither designed nor is it capable of serving as a substitute for a long-term market intervention strategy.
Stabilising the market requires boosting supply, not just threats of action or token OMS drives. However, traders -- operating largely for profit -- have little incentive to flood the market with affordable goods in times of scarcity. The state, therefore, has a critical role to play in stepping in when supply is inadequate or manipulated by syndicates.
Despite being the lone state trading agency, TCB's operations are confined mostly to OMS during a few occasions in the year, particularly in the run-up to Ramadan. Its limited scope means that its impact on stabilising the overall market is negligible. At best, it offers temporary relief to a section of the urban population, while rural consumers remain virtually untouched.
More critically, TCB's ability to intervene in the market depends entirely on its procurement and storage capacity. Without sufficient stockpiles in its warehouses, the corporation cannot counter the influence of organised syndicates that deliberately withhold goods to create artificial shortages and raise prices. In effect, TCB has been reduced to a symbolic entity rather than a potent instrument of market intervention.
The deficiencies of TCB become more evident when compared with similar organisations in neighbouring India. There, around a dozen state trading agencies operate with considerable autonomy, resources, and professionalism. Initially endowed with government funds, these agencies function as self-reliant entities, generating income through bulk imports, exports, and regular trade operations throughout the year. Their effectiveness lies in three basic factors: operational freedom, financial strength, and professional management. They function much like private businesses, free from bureaucratic constraints, while still serving public policy objectives.
In contrast, TCB has neither evolved into a self-sufficient trading entity nor been empowered with the autonomy necessary for effective functioning. It continues to depend on periodic government directives, limited funding, and outdated operational practices. Furthermore, unlike its Indian counterparts, TCB has not been encouraged to expand its role beyond OMS. It has remained largely reactive -- mobilised only during crises -- rather than proactive in managing long-term supply dynamics. This structural weakness has prevented it from becoming a serious counterweight to organised syndicates, which continue to dominate the market with ease.
The persistence of OMS as the government's principal market intervention tool reflects a deeper structural weakness in Bangladesh's economic governance. While it offers short-lived relief to a limited number of consumers, OMS does not address the root causes of market volatility. The real challenge is to ensure adequate supply and prevent manipulative practices by organised syndicates.
For that, TCB must be transformed from a symbolic entity into a robust state trading organization -- equipped legally, financially, and institutionally to act as a genuine counterforce to market manipulation.
wasiahmed.bd@gmail.com
