Rice prices rise, reserves fall

The price of rice has remained high for some time now, with little hope of any relief. The government’s initiatives have done nothing to salvage the situation and the present reserves indicate that the prices will not go down anytime soon.

The price of rice has had an impact on the economy. According to the research institute South Asian Network on Economic Modelling (SANEM), the 30 per cent increase in the price of rice over the past few months has pushed 500 thousand people below the poverty line. The finance minister has rejected the report, though admitted that the increased rice price has been a problem for some.

There may be debate over how many people have been pushed into poverty because of the rice prices, but when the price of coarse-grained rice is Tk 44 to Tk 46 per kg, it is certainly difficult for many to bear.

It is even more alarming that the price of rice in the international market is on the rise. That means import costs will go up. And the government food reserves are at a precarious level. The government has no tool to control the impact of rising rice prices on the market. Unscrupulous traders can take full advantage of the situation, pushing prices up even further. The government’s food grain storage capacity is 1.7 million tonnes, but it presently has only 375 thousand tonnes of rice and 250 thousand tonnes of wheat in reserve.

According to experts, the government loses significant control on the market if its food grain reserves fall below 1 million tonnes. And it fully loses control if the reserves fall below 600 thousand tonnes. That means the situation is alarming.

The government, on principle, has taken several measures to control the price of rice. It has cut down import duty to facilitate import of rice by the private sector. But the food ministry has completely failed to boost its food reserves. There is obvious need for supervision from the highest level. Round-the-clock monitoring of reserves, supply and imports is essential.

Rice is the staple food of the country and attention must be paid to the social and economic impact of the rising rice prices. If this trend continues, people above the poverty line will fall below and the ones already below, will become ultra-poor. This will consolidate poverty further and the country will be gripped by malnutrition. Efforts must now be directed towards increasing government food reserves. We hope the government focuses on this task.