EDEN BUILDING TO STOCK EXCHANGE

Published: 12:00 AM, 26 April 2020

https://dailyasianage.com/news/227627/commodities-supply-situation-during-lockdown-and-thereafter

Commodities supply situation during lockdown and thereafter

M S Siddiqui Developing countries are dependent on essential foods and medicines on bordering countries and Bangladesh is not an exception. Bangladesh is dependent on China and India for many essential products. WB has prepared the paper from the experiences of Ebola virus disease (Ebola) epidemic during 2014-16 on some of the world and suggested to keep the border open and co-ordinate with customer of bordering countries free flow of essential food and medical items and limiting negative impacts of jobs and poverty. The global trade and regional integration unit of WB has prepared some trade and COVID-19 guidance notes for developing countries are prepared. WB has suggested to take practical measures governments can implement to mitigate the impact of the COV19 virus outbreak. They have suggested some steps to arrange essential medical goods including material inputs for their production) and services to help contain the pandemic and treat those affected and providing farmers with necessary inputs such as seeds, fertilizers, pesticides, equipment, veterinary products for the next harvest. WB also suggested policy measure for reducing the cost and improving the availability of COVID-19 related goods and services through reducing tax and administrative burdens on importers and exporters. They also suggested reducing the cost of food and other products heavily consumed by the poor and contributing to the macro-economic measures introduced to limit the negative economic and social impact of the COVID-19 related downturn. Bangladesh are manufacturing 95 of the medicine locally although the major part of raw materials and ingredients are being import from China and India. The supply chain is not a risk as the major source of raw materials is China. The supply chain of agricultural inputs and equipment are manufacture or import by private sector and there is no shortage of those products. Prime Minister Sheikh Hasina already has announced a new stimulus package of Tk5,000 crore for farmers to boost agricultural production. The money from the fund will be disbursed among small and medium-scale farmers, including those in the poultry and dairy sector, in rural areas, at five percent interest. Small and medium-scale farmers in rural areas will get loans from the fund, and they can use the money to produce agricultural products, flowers, fruits, fish and poultry etc. Regarding commodity products, Bangladesh is relatively in better position as businesspersons are importing sufficient products for Ramadan.

Their consignments are either in stock or in transit from different countries. India has sealed border with Bangladesh and there is no period, when they will open the border. Another good news that China started ship the consignments. Our Chattogram port is working in a limited capacity for releasing some essential products. Chattogram customs sources said due to the countrywide shutdown from March 26, the product delivery dropped by around 70 percent. Moreover, the delivery from the port has declined due to the shortage of transport workers and vehicles. Many perishable products are laying in the port, which may cause loss of valuable commodities at this crucial time. The government has launched open market sale (OMS) of key essential items to keep prices within the buying capacity of the common people ahead of upcoming Eid-ul-Fitre. Trading Corporation of Bangladesh (TCB), a state-owned agency, would sell essential commodities in different parts of the country, using 350 trucks including 50 in Dhaka, 16 in Chattogram, 10 each in other divisional cities and four in each district town. Sugar, soybean oil and red lentils will be sold through trucks, according to the TCB. The OMS programme will continue across the country until May 20, except on Friday, says a press release issued by the TCB. The Commerce Minister in an interview confirmed that we have already ensured stocks of different essential commodities, including oil, pulse, onion, garlic and salt. The overall stock this year is around 40 percent higher than the previous year. Commerce Minister requested the Tariff Commission to prepare a report on existing stocks of essential products in the market. Accordingly, they have prepared a report on the demand, stock, import situation and supply of the products. According to the report, annual sugar demand is 18 lakh tonnes in the country. Monthly sugar demand is 1.35 lakh tonnes, which jumps to 3 lakh tonnes during Ramadan. Till now 62,000 tonnes of sugar have been produced and from February 2019 to January this year, 18.75 lakh tonnes sugar were imported. As per the estimate, the country has additional 1.37 lakh tonnes sugar in stock. Likewise, annual edible oil demand is 20 lakh tonnes, monthly demand is 1.50 lakh tonnes which increases to 3.50 lakh tonnes during Ramadan. The country locally produces 2.17 lakh tonnes edible oil annually and from February 2019 to January this year, 21.58 lakh tonnes were imported. That means, the country has additional stock of 4.75 lakh tonnes of edible oil. As per the report, annual lentils demand is 5 lakh tonnes, now the country has additional stock of 42000 tonnes of lentils. Annual ginger demand is 3 lakh tonnes, now the country has additional stock of 18,000 tonnes of ginger. There is an additional stock of 2000 tonnes of garlic, additional 1.43 lakh tonnes of onion and 68,000 tonnes of gram. In addition, a commerce ministry latest update showed that, the total food grains reserve at the government warehouses is 17.51 lakh tonnes. Of this, rice is 14.29 lakh tonnes and wheat 3.22 lakh tonnes. The food ministry is also saying the country has satisfactory reserve of food grains. The disruption of supply chain throughout country are affecting farmers as they are unable send vegetable and other perishable fruits. Many city dwellers left Dhaka, the demand also declined, and the price cheaper than normal time.

There is no indication when government will withdraw the lockdown but when normal economic activities will resume. PM Sheikh Hasina announced a new stimulus package of Tk 5,000 crore to provide financial assistance to farmers in rural areas for boosting agricultural production facing the fallout of Covid-19at only 5 percent interest. A local daily newspaper reported that the prices of essentials items like ginger, garlic, onion, potato and loose soybean witnessed further hike in the city markets. However, chicken, egg and meat prices showed a slight decline. Some of these items are halted import from India and Bangladesh should look for alternate source without any delay. There is change in behaviour of some other countries since they have started hoarding food due to fear of uncertain period of coronavirus. It has been reported in global media that some of exporting countries stopped export and looking for sources to import to meet any possible crisis in their own country. Government should plan and sit with the importers to plan an import strategy and look for different sources of essential commodities to maintain a large quantity of stock. There is another good step taken by the central Bank at the request of the government to extend deferred payment of Letter of Credit up 365 days instead of 180 days to help ensure supply chain of commodities during this COVID-19 situation. Deferred payment arrangements are often use in retail settings where a person buys and gets an item with a promise to making payments at a future date. Some of the business groups has shown their desire and whole hearted action to overcome crisis of onion of last year. They have supplied imported onion sold to TCB at import cost for selling to consumers at fair price. Government may sit with importers for making a strategy for import of essential goods from alternate sources to make buffer stock. The port should be operational in full capacity to release essential commodities. Let us follow guideline of Word Bank and re-call experience of the crisis of onion and take an immediate step to make buffer stocks of essential foods. The writer is a legal economist. Email: mssiddiqui2035@gmail.com