Supply crunch cuts paddy trade by 60% at Brahmanbaria market

Highlights

• Paddy price rose by Tk100 per maund due to supply crunch
• If the crisis is longer, rice prices will rise, and many rice mills will be closed
• The crisis may continue till middle of November
• Supply shortage declines paddy trading by 60% at Ashuganj paddy market 

Paddy trading in the BOC Ghat market in Ashuganj, the largest paddy market in the eastern part of the country, has dropped by 60% due to a supply crunch and price hike of the key staple, pushing rice millers and traders to the brink.

According to traders, paddy weighing more than 1 lakh maunds, worth several crores of taka, is traded every day during the peak season and 50,000 to 60,000 maunds in off-season.

Since the beginning of October, an average of only 20,000 maunds of paddy is currently being sold every day thanks to a supply crunch and the price hike of paddy.

The crisis may continue for at least a month – until the Aman paddy harvesting begins, paddy trading insiders have said.

At the paddy market, a maund of BR-28 paddy is now being sold for Tk1,350-Tk1,380 and BR-29 paddy is going for Tk1320-1350, with an increase of Tk100 and a mound of coarse paddy is being sold for Tk1,000.

However, if the supply crisis is prolonged, many rice mills may close down alongside the price hike of rice, according to the rice millers.

In Brahmanbaria, farmers and traders bring paddy produced in farms in Kishoreganj, Mymensingh, Netrokona, Sunamganj, Sylhet and Habiganj to the market by boat. About two thousand people, including workers, traders, farmers and mill owners gather here every day.

This haat (market) mainly supplies paddy to more than 250 rice mills in the district. After procuring paddy from this market, rice millers and traders supply rice across all the districts of Chattogram and Sylhet divisions, and some districts of Dhaka division as well.

The price of rice has started increasing owing to the price hike of paddy. Within the span of a week, per maund selling prices of BR-28 rice were Tk2,600 per sack, while BR-29 rice is being sold for Tk2,550, with an increase of Tk20.

Md Shahjahan, a trader at Ashuganj paddy market, said he used to procure paddy from farmers in haor areas and sell it at the paddy market. At present, the silos of farmers are running out of paddy. The price of paddy has risen due to a shortage of supply against demand.

"The crisis may continue till the middle of November. The paddy market will be stable when the harvest of the upcoming Aman season hits the market," he added.

Mobarak Hossain, proprietor of a rice mill, said the price of rice is not rising at the rate that the paddy price is rising, causing a financial loss for millers. If we fix rice prices after coordinating with the price of paddy, the price of rice will increase by Tk100 per sack.

Hasan Imran, member of Ashuganj Auto Rice Mill Owners' Association, said, "Many rice millers are being forced to shut their mills thanks to the supply crunch of paddy at Ashuganj paddy haat. Because of this situation, millers have to count huge losses."   

"If the supply crisis is longer, we will be forced to hike the price of rice. It seems that the supply crunch will not be resolved prior to the upcoming Aman season," he added.