Rice price soars despite surplus production

The gap between the production and consumption of rice still prevails. According to the Ministry of Agriculture, the production is good enough, at least 5 million tonnes more than the demand. So there is no need to import rice. However, despite the surplus production, the prices of rice are on the rise.

Meanwhile, the United States Department of Agriculture (USDA) said rice production in Bangladesh this year is little lower than the demand. The demand for rice rose due to the decline in wheat import.

According to the Bangladesh Rice Research Institute (BRRI) a total of 41.2 million tonnes of rice is likely to be produced this year, including 20.9 million tonnes of Boro rice, three million tonnes of Aush rice and 17 million tonnes of Aman rice. The overall demand of rice in the country at the moment is nearly 35 million tonnes. As such, there should be a surplus of 5 to 6 million tonnes of rice.

However, the USDA report says rice production in Bangladesh may stand at 36.3 million tonnes by the end of the current fiscal. At the same time, the amount of rice consumption may reach 37.6 million tonnes. So there will be a deficit of 1.3 million tonnes of rice. There is a huge difference between the information provided by the USDA and the government regarding rice production in Bangladesh.

The demand for rice usually remains low during the Ramadan. So the prices of rice are supposed to be stable during this month. However, it has been increasing for the last two weeks.

The food ministry held a meeting with the rice mill owners to keep the situation under control. The rice mill owners also made a commitment to not raise the price of rice. However, despite all these initiatives, the price of rice is on the rise. According to the Trading Corporation of Bangladesh (TCB), the price of rice has increased by Tk 2 to 3 over the last week.

In this situation, the government is relying on their old strategy by bringing down the import tariff to 17 per cent from existing 67 per cent. Initially, the food ministry gave permission to some 30 agencies to import 83,000 tonnes of rice. The ministry is also considering permitting some other agencies to import more rice. In all, the government may give permission to import 200,000 tonnes of rice.

Food ministry secretary Md Ismail Hossain told Prothom Alo, there is no scarcity of rice in the market. In addition, Boro rice will hit the market by April. Despite that, the price of rice is rising. The permission to import rice has been given to keep the rice prices stable throughout Ramadan.

According to the TCB, the price of coarse rice increased by Tk 2 per kg last week. Per kg fine rice is being sold at Tk 65 to Tk 73 after being raised by Tk 3 per kg. These varieties of rice are being sold at even a higher price in reality.

Visiting the markets in the capital’s Rampura and Malibagh yesterday, the price of coarse rice (Swarna and Chinese IRRI) has risen to Tk 52-53, which was Tk 50-51 per kg even two weeks ago. The price of semi fine rice rose to Tk 57-60 from Tk 55-56. The price of semi fine rice has increased the most.

Meanwhile, the prices of fine rice, including minikate and Nazirshail, have increased from Tk 62-78 to Tk 64-80. There are many varieties of Nazirshail rice in the market. Those varieties are being sold even at higher prices depending on the variety.

The prices of Miniket and Basmati rice have increased by Tk 2 in Kushtia’s Khajanagar, one of the biggest hubs of the rice market in the country. The price of BR-28 remained the same.

Bangladesh Auto, Husking, Major Rice Mill Owners Association general secretary HR Khan Pathan told Prothom Alo the government had many options other than putting pressure on the rice mill owners and giving permission to import rice. They should have decided to check whether anyone is stockpiling rice instead.

The price of rice rose once during mid-January this year. However, it came down due to the various initiatives taken by the government at the time. Now the price of rice is on the rise again.

The government has decided to import rice to control the market. Already the government has permitted 30 agencies to import rice. A large part of these agencies are from Jashore, Sylhet and Chattogram. However, many of the major exporters are refraining from importing rice this time.

The figures of Food and Agriculture Organization (FAO) of the United Nations (UN) shows that Bangladesh hasn’t imported any par-boiled rice due to the high price of rice in the international market where Bangladesh imported nearly 1 million tonnes of rice in 2021 and 2022.

Speaking to Prothom Alo, Chitta Mazumder, “We used to import rice mostly from India. It was cost effective considering the low price and low import cost. However, we have no other ways than importing rice from Thailand, Vietnam and Myanmar after India imposed a ban on rice exporting. If we import rice from these countries, then the price of rice would be Tk 60-70 per kg. So we are not importing rice this time.”

According to the FAO report of food price in March, the price of rice has increased by 13 per cent in the global market as compared to the price in November. The price of rice in most of the rice-exporting countries is between USD 560-670 per ton. Including shipping cost and tariff, the price of rice would be Tk 600-75 per kg. The price of rice has risen as India stopped exporting rice, except for some specific countries.

Naogaon is the country’s biggest rice producing zone. The price of paddy has decreased there by Tk 50-60 per mound. Per mound Swarna paddy was being sold at Tk 1400-1420 on Wednesday, which was between Tk 1,465 and 1,470 a week ago. The prices of Jeerashail and Kataribhog paddy have fallen by Tk 30-40 per mound.

Speaking regarding this, Noagaon district Rice Mill Owners Association general secretary Farhad Hossain Chawkdar said the prices of paddy had started to fall. This will be reflected in the rice market within a day or two.

Bangladesh Institute of Development Studies (BIDS) director general Binayak Sen told Prothom Alo, “The price of rice is quite higher in the international market now. It is likely to increase further. Therefore, the government might have taken the decision to import rice as a precaution. However, we have seen that the agriculture ministry always exaggerates regarding production rate, but the food ministry always comes up with deficits. We have to incorporate information from both ministries to have the actual figures on production, consumption and stocks. Otherwise, situations like this will continue to appear in the future.”

*This report appeared in the print and the online versions of Prothom Alo and has been rewritten in English by Ashish Basu.