Rice prices soar despite new crop and bumper imports

Rice prices soar despite new crop and bumper imports

Various varieties of rice grown by farmers in nearby villages are sold for 1400 taka to 2,000 taka per pound (about 37 kg) in a centuries-old floating market held every Saturday and Tuesday on the Sandha River at Banaripara upazila in Barishal. The photo was taken yesterday. Photo: Tito Das

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Various varieties of rice grown by farmers in nearby villages are sold for 1400 taka to 2,000 taka per pound (about 37 kg) in a centuries-old floating market held every Saturday and Tuesday on the Sandha River at Banaripara upazila in Barishal. The photo was taken yesterday. Photo: Tito Das

Rice prices have remained high in Bangladesh despite an ample supply of grain as farmers harvest the second largest safety crop, making low-income groups struggle amid continued economic uncertainty.

Over the past month, retail rice prices have risen by as much as 6 percent in the capital’s markets.

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The prices of medium-quality grains recorded the highest increase, followed by fine and coarse rice, which put pressure on the purchasing power of low-income people, who are already counting an increase for the increase in the cost of transportation and the high prices of various necessities, including edible oil.

Yesterday, data from the state-run Trading Corporation of Bangladesh showed that retail prices for medium grain were 52-58 taka per kilogram, up from Tk 48-Tk 56 a month ago.

The best item sold 3 percent more at Tk 60-Tk 70 yesterday than last month. Coarse grain prices rose 3 percent to 45-50 taka over the past month.

Millers and traders say the purchases of rice mills, including large industrial houses such as ACI Ltd, City Group, Pran and Akij Resources, which have entered the rice market in recent years, to build stocks to market the commodity during the lean season, is one of the The driving factors for the rise in rice prices.

The higher cost of transportation, fueled by the government from higher diesel prices in November, has contributed to higher prices for grain, which also faces 62.5 percent customs duties and taxes when imported.

Data from the Agricultural Marketing Department (DAM) showed that the prices of coarse and medium grains and less expensive grains of fine grains increased during the past month.

For example, prices for Aman Coarse, the second largest paddy field that makes up 38 percent of annual rice production, rose to Tk 913 – Tk 972 per million on Jan. 3 from Tk 919-Tk 950 a month earlier. This rise during the harvest season raised questions.

In Bangladesh, imports under reduced import tariffs increased from December 2020 to October 2021.

Of the total imports of 13.59 thousand tons in the 2020-21 fiscal year that ended in June, importers from the private sector brought in 7.86 thousand tons.

They have purchased 2.82 thousand tons from the international market so far in the current fiscal year, and the imported rice is already available in the wholesale markets in Dhaka.

“There may be a rationale behind the increase in prices during the lean season. But any rise in prices is illogical during the peak seasons,” said Al-Amin, a private business owner who lives in Uttara, Dhaka.

Nirud Poron Saha, a rice and rice wholesaler in Naogaon, one of the major rice wholesale centers, said rice prices remained strong even during the harvest season due to purchases made by mill owners.

Officials at three rice mills agreed with Saha, adding that mill owners and big wholesalers are busy buying rice for storage as they look to sell rice during the lean season before the next crop arrives by the end of April.

Besides, some farmers are hoarding rice in hopes of selling it at higher prices later, creating some crises in the market, say market insiders.

The Department of Agricultural Extension (DAE) estimates that a safety crop will be planted on 56.2 hectares of land during the current fiscal year, an increase of 4.3 percent over the previous year.

“We expect a good harvest this year,” said an official at Dubai Aerospace Enterprise.

Abdul Rashid, Chairman of the Owners Association of Major and Automobile Mills of Bangladesh, said that the increase in income tax, production costs and transportation affected the mills and increased the cost of production.

In the wake of the rice price hike, Food Minister Sadhan Chandra Majumder, in a meeting with mill owners and warehouse keepers on December 27, asked for help in keeping the market stable.

He also alleged that mill owners and warehouse guards manipulated rice prices.

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