The yearly price fixing failure

With Ramazan close to ending this week, the relief of affordable commodities has remained a far cry for lower-income groups. This was primarily due to structural issues in market dynamics that the government perhaps never factored in.

While market players argue their case with their usual, weak rationale, consumers go unrepresented; an average buyer from the middle- or lower-income groups ends up in losses, unable to even buy fruits during Ramazan thanks to the monopoly of market players.

A regulatory framework supposed to govern these areas follows a conventional approach, and thus, price fixation by administrations and market committees remains ever-present. Nobody at the government level delves into the dynamics of market committees where wholesale trading of vegetables and fruits takes place. Superficially, everything is left to commission agents and masha khors (middlemen) to handle.

It appeared to be a monopoly held by certain players within the mandi, a key cause of the problem that was never fixed. Prices were jacked up, artificially or otherwise, in the mandi. Its trickle-down effects were then seen in retail or roadside markets, burdening the average buyer.

Despite the presence of a market committee to oversee commodity price ceilings, market monopolies continue to negatively impact prices

Despite the presence of a market committee to oversee commodity price ceilings, market monopolies continue to negatively impact prices

Though administrative measures were taken to check prices, consumers’ cries about the prices of edibles, fruits and other items in Ramazan increased as they were left high and dry. No substantive change was seen in the whole exercise of price fixation by market committees.

The civil administration machinery focuses on price controls at the start of Ramazan to ensure that the prices it fixes are adhered to. Those violating the price list are met with heavy penalties, but such penalties hardly ever benefit consumers, and there is no permanent mechanism in place that could help consumers to seek recourse against profiteers.

Furthermore, price lists are issued separately. Grocery rates were fixed by a district-level committee headed by the deputy........

© Dawn Business