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Price hike cannot be checked thru raids on markets

Editorials 2023-08-11, 11:16am


food marketing

It is observed that mobile courts are fining business people at wholesale markets for price hike of essential items at retail outlets. It's true that wholesale price of goods is reflected at the retail level where essential items become even dearer. The question is why retailers charge more on certain essential items at a certain point of time. 

The administration officials will do good if they seek to know whether the price hike is based on the economic rule of demand a supply, or merely on the instinct to make undue profits making use of monopolistic advantages. If the price hike is based on demand and supply imbalance, the remedy will lie in doing away with the imbalance not by compelling retailers sell items at lower prices because this will not work in the long run. If the cost of production of the items have gone up and yet the administration wants those to be marketed at affordable prices, the best measure would be to act at the growers level by helping reduce production costs. 

In other words there is no easy solution to address the problem of price hike. The problem should be solve at its source. There are of course tendencies among a section of businessmen to seek windfall gains of sudden fluctuations in the supply chain. Steps against hoarding of essential items are welcome. Here again is a word of caution. Those charged to take action against hoarding should be equipped with adequate knowledge distinguish between normal stock maintained by big businessmen and hoarding. To check dishonesty by a section of dealers of essential items, there may committees having representation from trade bodies to identify wrong doing and wrong doers. 

There is nothing to be excited to see the differences of prices of perishable items at the retail and the wholesale markets. Retailers have to add costs to transportation, rent of their shops, the service rendered to ensure sale of their products, the price difference between the fresh ones, medium and lower quality ones. Retailers of perishable items have to sell the left overs at throw away prices at the end of the day. Profits have to be calculated by making adjustment for variables mentioned above.

Thus, to rein in price hike administration officials should primarily address the problem at the source and then maintain surveillance against dishonest practices. The second option singly cannot give optimum results.