Prices hit Bangladeshis hard, challenge government

By Ruma Paul

DHAKA, Oct 28 (Reuters) - The head of Bangladesh's army-backed interim government has asked his advisers to tour the country to find reasons for unabated rises in commodity prices, which analysts say pose the biggest challenge to the authority.

Prices of essentials including food, spices, milk, beef and chickens as well as vegetables and fish have gone up by around 100 percent since the caretaker authority, headed by former central bank governor Fakhruddin Ahmed, took over in January following month of political violence.

It cancelled an election planned for last Jan. 22, imposed an indefinite state of emergency, banned political activity and protests, and launched a drive against corruption.

There was wide support for the promised reforms as needed to put the south Asian country on the road to peace and to the free and fair elections Fakhruddin has vowed to hold by December 2008.

But the commodity price rises, blamed partly on spikes in global prices, have been an unprecedented hardship for many Bangladeshis.

Rice, the main staple in Bangladesh, now sells at 36 taka ($0.52) per kilogram, the highest in decades, while prices of wheat, milk and other foodstuffs have also nearly doubled.

"Never in my life have I seen such a wild increase in prices of almost everything. This cannot be caused just by rises in world markets," said a government school teacher in Dhaka.

"Poor market control is also to be blamed," he said, adding further price hikes could make many people starve.