Desk Report:
Commerce Minister Khandaker Abdul Muktadir has identified high logistics costs, increased production costs and various inconsistencies in the market system as one of the reasons for high food inflation. He said that to bring food inflation under control, there is no alternative to reducing logistics costs, controlling the cost of production inputs, reducing informal costs in the market and increasing the productivity of agricultural products.
He made these remarks as the chief guest at a dialogue titled ‘Food Value Chain in Bangladesh: Market System, Profit Margin and Role of Middlemen’ organized by the Center for Policy Dialogue (CPD) at the BRAC Center in the capital on Thursday (July 30, 2026).
The Commerce Minister said that inflation reduces the purchasing power of people and has a negative impact on the overall economy. Inflation increased in almost all countries of the world in the post-Covid period due to excess liquidity, supply chain disruptions and increased demand. However, although many countries were later able to control it, inflation in Bangladesh has remained high for a long time.
He said that one of the reasons for the persistently high inflation in the Bangladeshi economy is logistics costs. While logistics costs account for about 10 percent of GDP on average in the world, in Bangladesh it is about 16 percent. If this cost is reduced, it will be possible to significantly control food prices.
The minister said that market asymmetry is harming farmers. For example, he said that farmers have continued to produce the same amount of potatoes despite not getting a fair price for several years. This means that farmers are not receiving accurate market information and necessary instructions for alternative production plans.
He said that initiatives are being taken to introduce traceability in the entire supply chain from the production of agricultural products to the consumer. Through this, it will be possible to easily identify at which stage abnormal costs or price increases are occurring. At the same time, he also emphasized on reducing informal spending.
Khandaker Abdul Muktadir said that about 17.8 million farming families in the country live on a limited income. Their savings opportunities are very limited. As a result, the ability to invest in modern technology and high productivity in agriculture is also limited. For this, agriculture must be brought under more state support, research and technology-based management.
He said that since independence, various governments have continuously supported the agricultural sector by providing subsidies, fertilizers, seeds and irrigation facilities. However, now is the time for a more integrated and technology-based transformation of agriculture. Considering the soil, climate and agricultural characteristics of the country, an agricultural development strategy that is consistent with its own reality must be adopted.
The minister also said that agriculture is a sector that is not operated in a specific environment like industry; rather, it is dependent on nature and various external risks. Therefore, special attention must be given to agriculture and support must be continued to ensure national food security.
He said that to reduce food inflation, special emphasis should be given to three issues – reducing logistics costs, controlling the cost of production inputs and increasing agricultural productivity. If productivity increases, not only will the income of farmers increase, but it will also be easier to ensure the supply of food products at affordable prices for consumers.
CPD Senior Research Associate Fakhruddin Al Kabir presented the keynote speech at the dialogue. CPD Executive Director Dr. Fahmida Khatun moderated the discussion, which was attended by former Vice Chancellor of Bangladesh Agricultural University Professor Dr. Abdus Sattar Mandal, former Finance Secretary Siddiqur Rahman, former National Board of Revenue (NBR) Chairman Abdul Majid and Bangladesh Garments Workers Solidarity President Taslima Akhter Lima.
