#Free_hand_writing :) POLITICAL UNREST AND INFLATION Spiralling costs of freight transportation by road due to political unrest have hit the businesses hard, with some essentials sellers such as rice traders even deciding to shift the burden of increased expenses to consumers. If the blockade persists for long, all consumer goods sellers may resort to adding the soaring freight costs to the prices of their products, which along with a supply shortage, may ultimately stoke inflation. 1. Businesses now have to pay Tk 13,000-Tk 14,000 per truck to transport goods from Dhaka to Chittagong, as more than half of the transport service providers have stopped plying their vehicles on the highways for fear of arson and vandalism. The fare for the same route was Tk 8,000-Tk 10,000 per vehicle before the start of political unrest on January 6. 2. But it is the prohibitive freight costs from the troubled north that is particularly worrying, as the majority of the staple rice and vegetables arrive from the region. It now costs up to Tk 28,000-Tk 35,000 to hire a truck to send goods from the northern region to Dhaka, in contrast to Tk 18,000-Tk 20,000 prior to the blockade, according to Khan and some traders. 3. The few truckers that are coming are charging very high fares, due to which the rice prices have increased by Tk 1-Tk 2 in the city markets. 4. The transport fare now depends on the risk factors: the higher the risk of arson and vandalism, the higher the fares. The Rajshahi division, particularly Chapainawabganj district, carries high risk. 5. With the onset of blockade on January 6, the number plummeted to 30,000-40,000, and on the first few days, it cost as much as Tk 20,000 to send goods to the port city from the capital. 6. Meanwhile, inflation extended its downward trend in December, coming down to 6.11 percent -- the lowest in 25 months, mainly due to falling commodity prices on the global markets. Food inflation was the biggest driver behind the drop in the overall inflation last month, sliding to 5.86 percent from 6.44 percent in November, according to Bangladesh Bureau of Statistics. However, non-food inflation, which has been rising for a long time, went up further to 6.48 percent in December from 5.84 percent a month ago, because of a rise in house rent, transportation costs, education and medical expenses and prices of other non-food items. 7. Roads account for 80 percent of the freight transport in the country. (Collected)
Posted on: Sat, 17 Jan 2015 10:30:58 +0000