High food inflation persists in Bangladesh over the last year and rising food prices remain a concern to 71 per cent of households, according to a World Bank report.
The Food Security Update released by the World Bank in December classified the countries in four categories based on inflation rate and placed Bangladesh in the second category.
According to the World Bank report, food inflation was lower in India, Sri Lanka, Afghanistan, Bhutan and Nepal than Bangladesh in October-November while the figure was much higher in Pakistan.
Currently, according to the last population census, there are 41 million households in the country, and that means, as per the World Bank report, about 29.1 million households are worried over rising food prices.
South Asian Network on Economic Modeling's (SANEM) executive director Selim Raihan told Prothom Alo, “If food inflation rate soars, a large number of populations will be at a risk of poverty. We had conducted a survey in the beginning of the last year, and found 70 per cent of families with low income experience food insecurity.”
If food inflation rate soars, a large number of populations will be at a risk of poverty. We had conducted a survey in the beginning of the last year, and found 70 per cent of families with low income experience food insecurity
What the World Bank report says
According to the World Bank report, Bangladesh's targets for 2022-23 production of food grains were marginally underachieved. The government is procuring for buffer stocks. There were stocks of 1.85 million tonnes of food grains (rice and wheat) till 10 December, which was 1.76 million tonnes in June. The government has procured rice exceeding targets by 11 per cent.
Nevertheless, Bangladesh remains a food importer, and the softening of commodity prices has caused the food grain import bill to be 1.4 per cent lower than in 2022, and prices of non-grain food items were 20 per cent lower. Domestic rice prices have remained largely stable, although the price of high-quality rice has fallen since April. Bangladesh introduced a rice export ban on October 17th that includes aromatic and non-aromatic rice, the report read.
Mohammad Ali works as a manager at a construction firm. He lives with his wife and two sons in the capital’s Mirpur. Two year ago, He could easily run his family and make a little savings. He said he cannot save anything for the past one year and a half; rather he has to cut spending on food.
Though rice prices remained stable, it remained largely high. According to the state-owned Trading Corporation of Bangladesh (TCB) prices of coarse rice rose to about Tk 48-50 a kg from Tk 30-35 a kg in January last year. Price of loose coarse flour increased to Tk 45-50 a kg from Tk 28-30 a kg during this period. Likewise, the price of edible oil, sugar, and lentils also soared. Prices of lentils rose to Tk 105-110 a kg from Tk 65-70 a kg in January last year.
Prices started seeing uptrend after the coronavirus pandemic broke out in March 2020. Prices of most products including foods and oil soared after Russia invaded Ukraine in February 2022. Besides, Bangladesh witnessed a fall in foreign currency reserves, triggering the rise in exchange rate and import costs.
Prices of essentials, vegetables, fishes and red meat were largely on the rise throughout 2022 and 2023, and the government also increased the prices of fuel oil, gas, electricity and fertiliser.
Consumer Association of Bangladesh (CAB) president Golam Rahman told Prothom Alo the Russia-Ukraine war had an impact on the rise of food inflation rate in the country, but that has eased now, but the exchange rate of dollars is not falling. If dollar prices cannot be controlled, the price of imported goods will not decrease largely, he added.
Bangladesh in ‘red’ category
The World Bank marked the countries in four categories. Countries with a food inflation rate of 30 per cent or above is marked as ‘purple’; countries with a food inflation rate of 5-30 per cent as ‘red; countries with a food inflation rate of 2-5 per cent as ’yellow’ and countries with a food inflation rate of below 2 per cent were marked as ’green’.
Bangladesh was in the ‘red’ category in 2023 (January-November) along with 71 countries including Uganda, Laos, Egypt, Honduras, Kenya, Iran, Pakistan, Philippines, South Africa, Argentina, Austria, Belgium, France, Germany, Netherlands and the United Kingdom.
Food inflation dropped in the neighbouring countries of Bangladesh. Food inflation soared to 58.50 per cent in Sri Lanka till July last year, and food prices started to drop since then. Food prices fell by 3.6 per cent in November last year.
Among the rich countries, food inflation decreased in the United States as the figure dropped below 3 per cent in November last year from over 10 per cent in December 2022.
In Bangladesh, food inflation hit a record 10-year-high to over 12 per cent in November last year and overall inflation was also over 9 per cent in March-November last year.
The government provides rice, lentils, edible oil, opinion and sugar to 10 million households at subsidised price through family cards once in a month. The government also sells rice and coarse flour at subsidised prices in the open market. Economists, however, think the government should expand these initiatives since many low-income and middle class families cannot still enjoy this privilege.
Mohammad Ali works as a manager at a construction firm. He lives with his wife and two sons in the capital’s Mirpur. Two year ago, He could easily run his family and make a little savings. He said he cannot save anything for the past one year and a half; rather he has to cut spending on food.
Family expenses increased by about 30 per cent, but income did not rise that much, Mohammad Ali added.
*This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by Hasanul Banna