To mitigate inflation, economic experts have emphasised the need to enhance market supply by prioritising both imports and local production, dismantling syndicates of middlemen, and enabling direct procurement of goods from farmers.
They assert that bringing key importers back into operation would significantly ease inflationary pressures.
Experts also highlighted the limitations of relying solely on contractionary monetary policies in a densely populated, import-dependent country like Bangladesh.
They suggested that while new government measures to tackle inflation are underway, their impact may only become evident during Ramadan.
Root causes of inflation and proposed solutions
Abdul Awal Mintoo, a former president of the FBCCI, attributed the ongoing supply crisis to policy missteps over the past 15 years.
He criticised the current contractionary monetary policy, which has restricted banks' ability to issue letters of credit (LCs) for imports, thereby hindering the procurement of essential goods.
Mintoo questioned, "How will the supply increase if we cannot import?"
He proposed three key strategies to boost market supply - increasing industrial production, enhancing agricultural output through advanced technology and quality seeds, and improving imports.
However, he noted that even increased industrial production relies on imported raw materials, which are currently constrained by LC limitations.
Impact of corruption allegations on major importers
Dr Abdul Majid, a former chairman of the NBR, observed that several large importers, who previously played a vital role in ensuring food supply, have been blacklisted or had their accounts frozen over allegations of corruption.
This has disrupted their import activities, exacerbating market shortages.
Current NBR Chairman Abdur Rahman Khan highlighted measures to facilitate imports, such as reducing or waiving import duties, even at the cost of revenue.
However, insiders reported that 20–25 major import firms remain paralysed due to frozen accounts and suspended BINs, further straining the market.
These disruptions are particularly critical for the Trading Corporation of Bangladesh (TCB), which relies on these importers for a consistent supply of essential goods.
Government directives have recently allowed these firms to resume limited operations until allegations are resolved.
Exploring direct procurement from farmers
Efforts are underway to explore direct procurement of food products from farmers, bypassing middlemen.
Meetings led by district commissioners and other local officials have proposed leveraging administrative support for efficient collection processes.
Government efforts and business collaboration
The government is actively engaging with business leaders to address supply chain issues and restore market stability.
Shafiqul Alam, press secretary to the chief adviser, affirmed the administration’s commitment to increasing market supply through innovative strategies and fostering closer cooperation with traders.
Golam Rahman, former president of the Consumers Association of Bangladesh, stressed the importance of ensuring sufficient supply during Ramadan to stabilise prices, urging the government to adopt robust measures to that end.
The path to controlling inflation lies in a multi-pronged approach - increasing production, facilitating imports, and ensuring direct access to farmers’ produce.
Without decisive action, experts warn, supply shortages and price hikes may persist, particularly during the upcoming Ramadan season.
