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The volume of loan taken by Trading Corporation of Bangladesh (TCB) has hit a record high of around Tk 2.60 billion in the outgoing fiscal year, sources said.
The state-run agency took the loan to supply an increased amount of key essential goods due to prevailing Covid-19 pandemic.
The amount of loan against trust receipt (LTR) increased by over 503 per cent in the outgoing fiscal year (FY) than that of the previous fiscal.
TCB received a sum up to Tk 430 million in the last FY to operate its open market sale (OMS) in a bid to help keep the prices of essentials stable.
It took nearly Tk 2.60 billion as LTR from state-owned Sonali Bank in the current fiscal.
The prices of various essential items were volatile at the end of 2019 and the trend continued in the early of 2020 in the market.
TCB purchased more essential goods including sugar, edible oil, red lentils and etc through taking LTR as part of market intervention in the final quarter of the last calendar year and the first quarter of 2020, a source said.
In case of taking LTR from banks, TCB has to pay interest at a rate between 11 per cent and 12 per cent. Such borrowing increased import/purchase costs, said a high official concerned.
The stock of essentials is now ten times higher than that of the previous year, he also said.
The government has approved a mega purchase plan for TCB aiming to supply essential commodities to the people at affordable prices and help stabilise the market during the pandemic.
An inter-ministerial committee has approved the plan for the state-run agency to supply a total of 182,500 tonnes of kitchen products, around 59 per cent up than that of the current fiscal year.
"Many players will try to play foul amid the coronavirus pandemic. That's why we have approved the plan for the next FY," a senior official of the commerce ministry told the FE.
TCB is the market intervening agency and the government cools the market down by supplying staple goods at affordable prices through open market sale (OMS).
If the Covid-19 pandemic lingers, he said, some players may destabilise the market. "So, large business procurement will help foil such moves."
This time eight key essential commodities including two new products--garlic and ginger--will be bought from local and international markets.
Some 1,000 tonnes of ginger and garlic each will be supplied during two biggest festivals--Eid-ul-Fitr and Eid-ul-Azha.
Lentil is on the top of the chart as the government wants to supply 40,000 tonnes, up by 540 per cent than that of the current fiscal year.
It wants to supply 60,000 tonnes of soyabean, up by 33 per cent, and 30,000 tonnes of onion, up by 20 per cent, 40,000 tonnes of sugar, up by 33 per cent and 10,000 tonnes of gram, up by 25 per cent.
The government has planned to procure 500 tonnes of date for next FY.
It has set target to buy 30,000 tonnes of sugar, 45,000 tonnes of soybean oil (pet bottle), and 25,000 tonnes of onion, 6250 tonnes of lentils, 8,000 tonnes of gram and 500 tonnes of date for the current FY.
The government is set to prepare a key commodity calendar to stabilise the kitchen market which often remains volatile hitting hard limited income group of people, officials said.
The calendar consisting of seven most consumed products is expected to be unveiled from July next.
The calendar, first of its kind in the country, will include most used kitchen products--onion, edible oil, sugar, lentil, ginger, garlic and gram.
The government has provided subsidy amounting to over Tk 3.93 billion to TCB from fiscal year (FY) 2010-11 to FY 2017-18, according to the annual report of TCB.