Rice price spirals out of control

File photo
File photo

Rice prices have spiralled out of control, following a drastic fall in the country’s food reserves.

Traders fear prices will go up further.

In the last one month, the price of fine rice increased by Tk6 per kg while the price of medium and coarse rice rose between Tk 3 and Tk 4.

The price of fine rice exceeded Tk 60 per kg which was normally below Tk 50 the corresponding period in previous years.

BR-28, a medium quality rice, is being sold between Tk 52 and Tk 54 while coarse rice is being sold between Tk 46 and Tk 48.

In comparison to the corresponding period of last year, this year the price of fine rice increased by Tk 10 per kg while coarse rice by Tk 13.

The warehouse of the Food Directorate is supposed to contain at least 600,000 tonnes of rice, but it contains only 325,000 tonnes.

The government failed to increase the stock even after signing agreements with rice mill owners and different countries.

The government formulated a law in 2013 to coordinate the rice reserves with rice mill owners and traders. According to the law, the ministry should keep a monthly stock of rice, but it could not do so in the last four years.

Speaking to Prothom Alo, the food minister and the secretary said they did not know the stock.

In view of rising rice prices every week, the food ministry and the commerce ministry are blaming each other. Denying its own responsibility, the food ministry is blaming the commerce ministry, claiming that the rice price increased due to lack of monitoring by the commerce ministry.

Commerce secretary Shubhashish Bose said there is no reason of this price hike. The commerce ministry is regularly monitoring the market, he added.

"Letters were sent to deputy commissioners to control the price of rice," the commerce secretary said.

Owner of Agro Food Abdur Rashid said, "The rice mill owners have suggested that the government imports large quantities of rice to reduce the prices."

According to economists and civic organisations, the traders generally raise the price of rice when the government stock falls.

Speaking to Prothom Alo, Consumer Association of Bangladesh (CAB) president Ghulam Rahman said the traders took advantage of the government’s incompetence.

He said the traders raised the price as the stock in the government warehouse has fallen.

Ghulam Rahman also said the traders will raise prices until the stock is between 1m and 1.2 million tonnes.

Food minister Quamrul Islam said there is no reason of hiking prices as rice is available in the market. It is the responsibility of the commerce ministry to monitor the market, he added.

"I personally asked the divisional commissioners to strengthen the monitoring," the food minister said.

According to the food ministry, 363,000 tonnes of rice were imported till 26 August.

Before Eid, the government reduced duty on rice import to 2 per cent from 28 per cent. But this has had no impact on the market.

Director general of Bangladesh Institute of Development Studies (BIDS) KAS Murshid said the blame game between the food ministry and the commerce ministry will not resolve the crisis.

He said the operations of the mobile court may have a negative impact.

The government has to increase stock while the open market sale (OMS) programmes have to be expanded, he suggested.

Meanwhile, the government is facing a crisis with its social safety net programmes. The food ministry has delayed the pro-poor programme of selling rice for Tk 10 per kg by one month.

*The article, originally published in Prothom Alo Bangla print edition, has been rewritten in English by Rabiul Islam