Bangladesh is struggling with a surge in the prices of essentials such as sugar, lentils, and soybean oil, despite significant government subsidies.

Last week, the government released Tk 1,596.76 crore in trade gap subsidies for five essential commodities, including sugar, lentils, and soybean oil, covering January to June 2023. This adds to Tk 1,600 crore allocated in the previous six months. Through the Trading Corporation of Bangladesh (TCB), these subsidized goods reach over 1 crore cardholders.

However, open-market prices remain stubbornly high. In March, TCB sold sugar and soybean oil at Tk 100 per kilogram, and lentils at Tk 60. Yet, dwindling imports, especially since the government transition, have aggravated shortages. Palm oil prices surged by Tk 10-19 per liter, and soybean oil rose by Tk 7 per liter.

The National Board of Revenue (NBR) reports a steep drop in raw sugar, palm, and soybean oil imports following the fall of the Awami League government. Though import duties on sugar were reduced, the supply gap persists, with Bangladesh demanding 24 lakh tons of sugar annually—far exceeding domestic production.

Economist Dr. Reza Kibria highlighted that political upheaval often disrupts supply chains. He urged the promotion of entrepreneurs to boost production and imports. Additionally, floods in northern and Comilla regions have hit vegetable production, compounding the crisis.

While price-controlling syndicates were dismantled after the government shift, banks’ reluctance to provide import loans has led to a credit crunch. Kibria stressed that resuming lending would help reverse the declining imports.

TCB spokesperson Humayun Kabir noted that without TCB’s intervention, market prices would have climbed even further. Bangladesh also recorded its highest inflation in a decade in 2023-24, with food inflation exceeding 10% for much of the year.