Soaring rice price hurting low earners

Highlights:

• Rice price soared at least Tk4-5 per kg
• Price shot up twice in last 3 months
• In April and May, rate of price increase was 12.45% and 12.78%
• In June and July, it was 15.18% and 15.82% 

Reasons:

• Impact of fuel price hike on the market
• Govt procuring rice at an increased rate
• Price hike is artificial, traders allege

With the price of rice, the main staple, shooting up twice in the last three months, people and low income earners in particular, are suffering the most.

Impacts of the recent fuel price hike, and increase of rice procurement price at the government level have caused prices to skyrocket. However, wholesale traders have alleged that prices are being manipulated by creating an artificial crisis.

Rice prices in the domestic market have been rising sharply since June, when the rate of rice price increase was 15.18% on average, followed by 15.82% and 15.62% in July and August. Earlier, in April and May, the rate was 12.45% and 12.78% respectively.

"The sudden skyrocketing of rice prices usually forces low earners to reduce their rice consumption," Moinul Islam, former professor at the Economics Department of the University of Chittagong, told The Business Standard.

"These families spend 50-60% of their income on food and the most amount is spent on rice. According to various statistics, over 66% of families reduce their staple consumption," he added.

According to traders at Chattogram's Khatunganj, the country's largest wholesale market, the price of rice had already been on an upward trend due to the fuel price hike. On top of it, the supply of rice from different parts of the country has declined over the last one week.

As a result, the price has gone up by Tk100 to Tk250 per 50kg sack while the warehouses are showing a crisis in supply, they said.

Prices of parboiled varieties, including Sharna, Miniket, Kajollata and Jirashail, per 50Kg have increased by Tk200 and are being sold at Tk2300, Tk2500, Tk2700 and Tk3100 respectively while the parboiled Paijam variety price has gone up by Tk150 and is being sold at Tk2500.

On the other hand, prices of sun-dried varieties of Miniket have soared by Tk100 and are being sold at Tk2600 per 50Kg, Irri increased by Tk200 and is being sold at Tk2000 while Katari is being sold at Tk3400.  

Prices in the retail market have also gone up by Tk4-5 per kilogram.

Farid Uddin Ahmed, general secretary of "Chaktai Shilpa Banik Samiti", told The Business Standard, "Importers did not import even 25% of what they said they were going to because the prices do not match with the local market. So the prices have gone up a bit."

However, he claimed that prices are beginning to decrease.

Abdus Sattar, owner of Khan Department Store, said, "Prices in the domestic market are on the rise due to rising prices of Indian rice."

Meanwhile, the government has set a target of procuring 3 lakh tonnes of paddy and 5 lakh tonnes of parboiled rice in the current food procurement season, which will continue till 28 February 2022.

On November 8, the food ministry issued a special directive to ensure fair prices for farmers.

Based on the circular, signed by Nazmanara Khanum, secretary at the food ministry, the government purchase price of Aman paddy was later fixed at Tk27 per kg and purchase price of rice was set at Tk40 per kg through an agreement with millers. ***