Published on 07 Aug 2012 at 09:36
Prices of food and other goods are on the rise during the holy month of Ramadan. Analysts argue that price increases result from simple supply and demand – Ramadan drives up the demand, which drives up the prices. However, many others, particularly sellers in the market believe that government inattention to market oversight and hoarding of foodstuff are main causes of the problem.
Khan Jan Alakozai, Deputy Chairman of the Afghanistan Chamber of Commerce & Industries (ACCI), believes that the theory of supply and demand, particularly during the high demand month of Ramadan (fasting month for Muslims) increases prices in the market. “Afghan traders haven’t intentionally increased the prices of foods in the market. On the contrary, prices of sugar and oil even decreased,” he said.
According to Alakozai, the price of gas has increased because the “Afghan-Turkmenistan gas import contract expired and this has resulted in an increase in the price of a ton gas from US$720 to US$950. Both the ACCI and Gas Department at the Ministry of Commerce & Industries are trying to solve this problem.”
Alakozai blames the rest on border issues. “The Pakistan government does not allow traders to import chickens, meat and dairy and this has also affected prices in the Afghan market.”
Professor Mohammad Bashir Dadwall, lecturer at the Economics Faculty of Nangarhar University points to several other factors contributing to rising food prices, including people’s demands and cultural behaviors, especially during Ramadan. “People try to provide different kinds of meals during Ramadan and then they prepare for Eid,” he said. “They would like to buy many types of goods and so the prices increase.”
“The Pakistan government does not allow traders to import chickens, meat and dairy and this has also affected prices in the Afghan market.”
Dadwall asks Islamic clerics and the media to inform people not to hoard goods or increase prices. “I wish the media and Islamic clerics would ask people to avoid increasing prices of goods during this holy month,” he said.
But, this is not an unfamiliar phenomenon. Every year prices of basic goods increase as the holy month of Ramadan begins. Alim Rezaee, a shopkeeper in the Furoshgah area of Kabul believes that there is more demand for food during Ramadan and thus we see an increase in prices. “Though the prices of goods have increased, many people still come and buy necessary things,” he said.
Rezaee says that due to price increases, he is also forced to sell his goods at higher prices. “A bottle of milk costs 13 Afghani before Ramadan, but now I have to buy it at 17 Afghani and then sell it at 20 Afghani” he said. “A small can of skim milk costs 45 Afghani and a can of dates costs 50. I have to sell at a higher price when I buy at a higher price.”
Khair Mohammad Safdari, head of the Market Control Department at Kabul Municipality, says the municipality does not have the right to control market prices. “Due to the free market policy in Afghanistan, the municipality only reserves the right to control the quality, not the prices in the market,” he said.
It is unclear who or what entity is responsible for overseeing market prices in the free market system. “Free market doesn’t mean that you can sell or hoard anything as you wish. The government has a specific policy to control such cases,” said Alakozai. “Though the Ministry of Commerce and Industries drafted the Free Competition and Anti-hoarding Law, it is not yet approved. Hopefully, it will be approved soon.”
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