Government of Bangladesh takes urgent measures to stabilize potato prices ahead of National Elections early 2024

Observing an alarming rise in potato prices barely two months before the national elections, scheduled for January 7, 2024, the Bangladesh government has initiated several measures to ensure that potatoes and other essential food items are available at reasonable prices.

The issue was discussed at a meeting in the Bangladesh Prime Minister's Office (PMO) on November&nbsp11, the Financial Express published from Dhaka said in a report. The government immediately instructed deputy commissioners (DCs) to deploy officers to all cold storage starting November 12.

The government ordered potatoes to be sold from cold storage at BDT 27 (USD 0.24) and in the retail market at a maximum of BDT 36 (USD 0.33). In addition, the government has decided to provide low-income individuals in Dhaka with subsidized 2 kg potatoes and other commodities.

The initiative will benefit about 9000 families in Dhaka, The Business Standard published from Dhaka said in a report on November 13. According to these media reports, the PMO instructed Bangladesh Bank Governor Abdur Rouf Talukdar and state-owned Sonali Bank's managing director, Md Afzal Karim, to ensure an adequate supply of US dollars to facilitate smooth imports of potatoes and other food items by the Trading Corporation of Bangladesh (TCB).

This agency supplies subsidized food items to the country's poor. The reports attributed the information to Commerce Secretary Tapan Kanti Ghosh. The potato shortage in Bangladesh has been in the news for the past few months this year. Early this month, PotatoPro reported that the country had opened potato imports for the first time.

According to estimates, Bangladesh consumes about 9 million tonnes of potatoes annually. At the end of harvest in March 2023, the Ministry of Agriculture of Bangladesh announced that potato production was 11 million tonnes, a surplus of 2 million tonnes. But after July, the country with nearly 170 million people began facing a shortage of potatoes and a rise in prices.

The shortage was believed to be due to less-than-expected production after July. Some independent observers point out a mismatch in the government's data about potato production in the financial year 2023. While the Department of Agriculture Extension (DAE) said it was 11.2 million tonnes, the Bangladesh Bureau of Statistics said it would be 10.4 million.

Bangladesh Cold Storage Association (BCSA) said it was 8.5 million tonnes. After the scarcity and price rise in the domestic potato market hit the headlines, the government ministries conducted a study in late October and claimed that the cold storage operators were manipulating the supply, creating a shortage of staple vegetables in the market.

The government of Bangladesh for the first time in its history allowed the import of potatoes, capping the limit at 200,000 tonnes. So far, the country has received 1095 tonnes of potatoes imported from India. By the end of October, the potato prices in the retail market touched BDT 70 (USD 0.60) per kg.

Alarmed by the rise in prices of potatoes and several other food items such as onions, eggs, lentils, oil, and sugar, the Bangladesh government decided to open imports of these items. The Bangladesh government has taken strict action against those manipulating potato prices.

But given the approaching national elections, media reports said the government intends to tactfully navigate the issue and keep the option of harsh actions post-elections.