Rice market still unstable, prices on the rise

Amid the upward trend of edible oil prices breaking some previous records, rice, the staple food in Bangladesh, also continues to get pricier despite government efforts to control the market. 

Adding to the woes of low and lower-middle income groups, prices of different rice varieties rose by Tk2 per kg in a week. 

The prices of coarse rice, which dominate the menu of almost all low and lower-middle income families, saw the highest rise in a year - 37%.

Traders blame supply crunch for the price hike. 

Sources at several kitchen markets in Dhaka said on Friday that fine rice (ie Nazirshail and Miniket) was selling at Tk66 per kg, up from Tk64 a week ago.

The rice variety that cost Tk58 last week is now available for Tk60.

Karwan Bazar-based wholesaler Abdul Hakim said they were not getting adequate supply of rice from the mills, which is why the prices are higher.

He claimed that they were making just a 20-30-paisa profit from each kilogram of rice. 

According to the Trading Corporation of Bangladesh (TCB), the rice variety, which is now priced at Tk60, cost Tk50 around this time last year.

Over the last one year, the prices of fine rice shot up by 17%. 

Medium quality and coarse rice is now selling for Tk48-50 and Tk58-60 respectively.

Frustrated over the exorbitant pricing, many customers said it was high time the government acted strictly on the matter.

Abdul Quader, a Jatrabari resident, said: “The price hike has been going on for months. It feels like we have to omit rice from our main meal if its prices are not controlled at the earliest.”

On December 27, the government decided to allow private traders to import rice in a desperate bid to offset high rice prices in the domestic market.

The import duty was lowered to only 25% from 62.5%, so that private importers could supplement recent government efforts to import rice by floating international tenders.

Bangladesh, traditionally the world's third-biggest rice producer, has emerged as a big importer of the grain lately due to depleted stocks and record local prices after repeated floods that ravaged local crops.

The country produces around 35 million tons of rice annually, but uses almost all its production to feed its population of more than 160 million, often requiring imports to cope with shortages caused by floods or droughts.

The government is rushing to build buffer stocks as it aims to import as much as 500,000 tons of rice by June. It is finalizing the purchase of 150,000 tons of rice from India, officials told Reuters, in what would be the first such bilateral deal in three years.

The government has also issued a series of tenders to purchase rice in recent weeks.

The output of rain-fed rice, or Aman crop, is expected to fall by as much as 15% this year, due to floods and excessive rainfall, a senior official at the Ministry of Agriculture said.

With shortfalls, the government's domestic rice procurement in this harvesting season could see a setback after an earlier drive to shore up supplies falling short of targets.

In the meantime, the government on February 17 set the edible oil prices aiming to ease the “heated” market. Even after that, the scenario hardly changed and the daily essential got further pricier.

Other essentials

Chicken, too, got pricier in a week by up to Tk10 per kg, now selling for Tk150-160. Among other essentials selling at higher prices are imported ginger, local garlic and cumin.

However, most of the winter vegetables, flour and wheat got a little cheaper. 

On the contrary, summer vegetables including bottle gourd and okra are quite high-priced as they are selling for Tk100 per kg.