Sylhet floods push rice prices up Tk4-6 a kg

The price of rice has risen Tk4-6 per kg over the last couple of days as a large portion of Sylhet division and northern Bangladesh, one of the key paddy-producing regions, was recently inundated by devastating floods.

A 50-kg sack of coarse rice sold for Tk2,100 in Chattogram's Khatunganj – the largest commodity wholesale hub of the country – on Tuesday, while other varieties sold for TK2,200-3,200. Atap rice was  selling for Tk1,700-3,800 per 50-kg sack in the market.

With the price hike in the wholesale hub, different retail markets across the country increased rice prices accordingly.

"The floods have submerged Aush paddy fields in Sylhet. Earlier, boro paddy fields in the region were also destroyed by rain and flood waters. The two disasters badly affected the country's rice market," Omar Azam, general-secretary of the Chattogram Rice Traders Association, told The Business Standard (TBS).

Rice prices also rose Tk300-400 per 50-kg sack during the peak hours of Boro season last month when rice millers and wholesalers ostensibly manipulated the market by curtailing supply of the item.

The government then imposed restrictions on stockpiling and raided warehouses, which helped bring down prices by Tk200 per bag within just 10-15 days. It also cut import duties on rice to 25% from 62% to keep the most essential commodity at a reasonable price level.

The rice market, in the span of a month, has become unstable again purportedly due to the floods in the north and northeastern districts.

 "Large millers and business groups have huge stocks of paddy and rice. Now, they are taking advantage of the floods," Shantu Dasgupta, former president of the Chattogram Rice Mill Owners Association, told TBS.

He added that the rice market would stabilize again with the beginning of rice imports.

"Paddy and rice from the greater Sylhet region were supplied to other parts of the country. Now, the situation has reversed. The region needs rice from other parts," said SM Nizam Uddin, general-secretary of Pahartali Banik Samiti, a Chattogram-based wholesale rice hub.

At the same time, the government's programme of procuring paddy and rice is ongoing, which also creates a shortage, he told TBS, adding that the price of rice went up a bit, as a result.

Traders urged the government to cut duties further on rice imports to keep the essential market item at a tolerable level.

"The announcement to reduce import duties on rice will help curb stockpiling. Prices will also come down if the warehouses are raided again," said Pahartali Merchant Association Vice-President Zafar Alam.

Meanwhile, the food ministry has asked traders to apply by 17 July to import rice privately.