Rice prices jump again

With the commencement of paddy and rice procurement activities, the price of rice has started rising again in the market.

Although the price of rice declined after the Boro season, it has increased by Tk200-Tk250 per sack in the last two weeks.

Even though the demand has not increased, the price of rice is being increased artificially in the wholesale market using the government procurement activities as a pretext, according to sources concerned.

After a long upward trend, the price of rice in the country started falling a month and a half ago, decreasing by Tk300 per sack (50 kg). After that, rice prices remained stable for about two weeks. 

However, the price of rice has been rising again in the last two weeks, increasing by upto Tk250 per sack, said wholesalers from Pahartali and Khatunganj in Chattogram.

According to traders, a few days ago, Nazirshail rice, imported from India, was sold at Tk2,650 per bag, but now it is being sold at Tk3,140, with a rise by Tk490 per sack.

The price of domestic Jirashail rice has gone up by Tk200 to Tk2,850 per sack, Motasiddha by Tk150 to Tk1,800 and Miniketsiddha by Tk 250 to Tk2,400 to Tk2,500.

In the current boro season, the government has set a target of procuring a total of 16 lakh tonnes of paddy and rice, including 6 lakh tonnes of paddy and 10 lakh tonnes of boiled rice. On 6 May, the food ministry issued a circular instructing the concerned field level offices to achieve this target by next August.

According to the government's announcement, the Boro Paddy and rice procurement activities for 2021 started respectively from 28 April and 7 May. The government has procured a total of 7,62,214 tonnes of paddy and rice in the last two months.

Sheikh Selim, a wholesale rice trader in Chattogram's Chaktai area, said the newly harvested rice has started coming to the market during the last three weeks. 

Earlier, the country started importing rice from India and other countries due to increasing prices in the market which succeeded bringing stability in the market. But with the onset of the third wave of the ongoing Covid pandemic recently and the increase in global prices, the price of rice in the country started increasing again. 

"Earlier, the rice market in the country remained volatile for 5/6 months. At the end of the last Boro season, when new rice started arriving in the market, prices started to decline. Traders are apprehending further instability in the rice market as prices have risen again in a few weeks," he added.

Shanto Dasgupta, former president of the Khatunganj Rice Mill Owners' Association, said the price of rice in the retail market is rising as rice procurement activities have gained momentum. Farmers and traders have reduced their sales as they have benefited from paddy and rice during the last one year.

According to traders, the government has reduced the import duty on rice to 10% in the wake of rising prices. However, as the import process was not competitive, rice was not imported as per the target. Despite the benefits of tariff reduction, rice prices gradually increased in the market. The market of rice, the main food grain of the country, is not stabilising even after the start of the import process, due to food shortage in the country mainly.

According to traders, the government allowed rice imports but the initiative did not have much impact on the country's rice market; because the rice import opportunity was not open to all. The approval was given by the commerce ministry, after submitting applications to it. 

As a result, only a handful of companies got the opportunity to import rice; that is why the rice import initiative of the government or the tariff reduction on import failed to create any impact on the market, said the traders.