Rice prices remain high despite supply chain recovery

After the formation of an interim government and the recovery of the supply chain, the prices of most commodities have started to decline, but the same is not true for rice.

Despite sufficient stock, the price of rice has increased by Tk5-8 per kg over the past one and a half months, with wholesale and retail traders attributing the unreasonable hike to exploitation at the mill level amid political instability.

Food Secretary Md Ismail Hossain told The Business Standard that while the unstable situation caused some disruptions, things are expected to return to normal by overcoming the crisis.

"There have been a few issues. One is that the transport system was not functioning normally, leading to increased transportation costs. Additionally, many rice mill owners' organisations are led by members of the recent ruling party, and several leaders have become unavailable," he said.

He said another factor could be that open market sale (OMS) activities were suspended for the past week. However, OMS operations are resuming in full swing on Sunday.

"We are actively working on this, and I am hopeful that the rice market will return to its previous state very soon," added the food secretary.

At the wholesale market in the capital's Karwan Bazaar, BRRI 28 variety rice is being sold at Tk57-58 per kg. Additionally, BRRI 29 rice is priced at Tk60, Jeerashail or Miniket at Tk66-70, Payjam at Tk58, Nazirshail at Tk72-76, Siddha Katari at Tk74-76, and Basmati at Tk88-90 per kg.

In the retail markets, stores are selling rice at least Tk3-4 higher than the wholesale price per kg. Traders say the price has increased by at least Tk5-8 per kg compared to the third week of June, after Eid-al-Adha. While prices started to decrease last month, they have recently risen again by Tk2-3 per kg in the past week.

The mill-level price influences both retail and wholesale prices, with Naogaon, which hosts the country's largest rice depot, supplying the most rice from its mills nationwide.

Shahon Hossain, a rice wholesaler at Karwan Bazaar, told TBS, "We purchased rice for Tk100 more per 50kg bag on Friday. The price has been rising for a month. If prices increase at the mill gate, we have no choice but to follow suit. However, there is currently no justification for the rising cost of rice."

On Saturday, the country's largest rice depot at Artdarpatti in Naogaon reported that Swarna was priced at Tk52-53 per kg at the mill gate, BRRI 28 at Tk57-58, Subhallota at Tk60-61, Jeerashail or Miniket at Tk65-66, and parboiled Kataribhog at Tk65-70.

In the third week of June, Swarna was sold at Tk49-50 per kg, BRRI 28 at Tk54-55, Subhallota at Tk51-52, Jeerashail at Tk59-60, and Kataribhog at Tk59-62.

Sukumar Brahm, proprietor of Sukumar Rice Mill in Naogaon, told TBS, "The supply of rice is low due to security concerns. We are unable to send rice to various locations. However, we are fulfilling orders from those who still choose to buy. No one wants to take the risk if there's an accident on the road, but the situation is gradually normalising."

Naogaon District Rice Mill Owners Association General Secretary Farhad Hossain Chakdar has attributed the rise in rice prices to the increase in paddy prices.

"This time, the price of paddy was higher than ever before. Corporate entities are also influencing the rice market," he added.

SM Najer Hossain, vice president of the Consumers Association of Bangladesh, told TBS, "There is no longer any extortion, so prices should be decreasing."

"However, mills are notorious for exploiting political unrest to make extra profits. Over the past one and a half months of turbulence, they have taken advantage of the situation, which is unacceptable. The new government must enforce strict monitoring," he added.  

The day after the formation of an interim government, traders on Friday said vegetable prices have decreased by at least Tk15 per kg over the past three days, while chicken prices have dropped by Tk20 during the same period.