Rice prices shoot up despite sufficient stock

Amid national outcry over skyrocketing onion prices, the prices of different varieties of rice have surged by Tk5 to Tk7 per kilogram over the past several days.

Traders said the sharp increase in the price of the major cereal has been caused by a hike in the price of paddy. 

However, the Directorate General of Food said no such crisis has erupted in the country to warrant the price hike. The government agency is worried that some vested quarters from the business community are trying to destabilise the market.

According to data by the Trading Corporation of Bangladesh, price of the coarse variety of rice shot up by 10.29 percent since last week, while prices of the fine and the medium qualities of the essential commodity rose by 7 percent and 6 percent, respectively.

Expressing anger over the volatile kitchen market, a buyer named Rabeya at Karwan Bazar, Dhaka said, "Until now there has been a drama over the price of onions. Now another drama has been launched over rice. The price of the commodity has been raised by Tk5 to Tk6 in one go."

Another buyer Abdur Rahman said the prices of all commodities are now "out of reach," adding, "All pressure is now on the common people." 

Even a month ago, the food directorate tried to sell rice in the open market at Tk30 per kilogram, but failed to do so as the price of the item was low in the local market. 

However, traders have raised rice prices on the pretext of a supply shortage. They claimed the surge in rice prices is a combined upshot of the dwindling stock of Boro paddy, and the hike in paddy price after the government fixed the price of Aman paddy. 

Dr Mosammat Nazmanara Khanum, director general of the food directorate told The Business Standard that there is no scope for a shortage in the supply of rice as the production and stock of paddy has been very good. 

"The price may rise by Tk1 per kg at the highest because of an increase in transportation costs," she pointed out, adding, "The government will have to look into as to why the price is surging in this context."

Meanwhile, during a meeting with Food Minister Sadhan Chandra Majumder last Sunday, mill owners said traders have raised the price of paddy following the fixing of the price of Aman paddy by the government. 

Since the price of paddy has increased, it is quite normal that the price of rice would also increase, they said. 

They, however, could not explain as to why the price has risen so high.

Dr Mosammat also said that the Directorate General of Food will write to the Ministry of Food and the Ministry of Commerce, urging them to strengthen market monitoring.

Meanwhile, millers, wholesalers, and retailers are blaming each other for the sudden volatility in the rice market.

The millers said prices of different varieties of rice have increased by Tk1.5 at mill gates. The additional prices are going to the pockets of the wholesalers, and the retailers.

Abul Kalam Azad, a miller in Bogura, said, "Miniket rice is produced from Zirashail paddy. This paddy is harvested during the months of April and May, so farmers do not have much stock of the paddy at this moment. The limited stocks which are available now are in the hands of the businessmen. 

"The businessmen have raised the price of the paddy, as a result of which the price of miniket rice has increased by Tk1 to Tk1.5 at mill gates. The rice is being sold for a maximum of Tk40 per kilogram at mill gates, but the retail price has exceeded Tk50."

However, the wholesalers and retailers have held the millers completely responsible for the price surge.

Shariful Islam, manager of a wholesale shop Badshah Rice Agency at Karwan Bazar, said the millers have raised the prices of various types of rice. 

He said that since they are buying rice at higher prices, they are compelled to sell at higher prices as well.

As farmers were denied a fair price of paddy during the last Boro season, the government has decided to procure Aman paddy directly from farmers. In the upcoming Aman season, the government will buy 6 lakh metric tonnes of paddy at Tk26 per kilogram.

At the same time, the government will procure 4 lakh tonnes of rice in the coming season. The procurement price of one kilogram of parboiled rice has been fixed at Tk36, and that of non-parboiled rice (Atap) has been fixed at Tk35.

The millers said rice traders have raised the price following the government's announcement of procuring paddy and rice. 

They also claimed due to the enforcement of the Road Transport Act, there has been a crisis of transportation across the country, which has resulted in a rise in transportation costs. 

"This has impacted the price of rice," said Layek Ali, secretary general of Bangladesh Auto, Major and Husking Mill Owners Association.

According to Food Ministry data, the current reserves of rice and wheat in government silos across the country are 11.46 lakh tonnes and 3 lakh tonnes, respectively.