Artificial supply crunch drives up flour prices by Tk 6 per kg

Amid the ongoing speculations of a hike in flour prices following the Indian wheat export ban, coarse and finer flour prices have risen by Tk 6 per kg in the retail market.

Although the government is optimistic about its efforts to convince India to continue exporting to Bangladesh, wholesalers claim that local retailers and manufacturers of wheat-based products are hoarding stocks in anticipation of a price hike in the coming week, causing an artificial supply shortage.

The price of each sack (50kgs) of coarse (atta) or finer (maida) flour, has risen by up to Tk 300, The Business Post found while visiting different wholesale and retail markets in the capital on Monday.

Each sack of maida was selling for Tk 3,050-3,100, up from Tk 2,750-2,800 and atta was selling for Tk 2,050-2,100, up from Tk 1,750-1,800 a day earlier.

Without having any definitive directives from the parties concerned, a section of retailers was selling atta and maida at Tk 40-45 a kilogram, marking an increase of Tk 5 per kg.

“Although the retail flour market is yet to experience a price hike, some of the retailers have already been asking for an increased price from the consumers,” said Shibly Saidi, proprietor of Bhuiyan Enterprise in the capital’s Mugda Bazar.

“As the government did not send us any directives about the price hike we are not asking for an increased price as we are selling products from our existing stock,” Shibly said.

The wheat price hike will substantially affect the prices of different wheat-based bakery products, including bread, rolls, cookies, pies, pastries, and muffins, he added. 

This correspondent found that bakeries have already raised the price of various baked goods.

Rejaul Haque, the owner of Haque Bakery and Bread, said he had not been able to get his desired quantity of flour from the company’s regular wholesalers since India declared the ban. 

“I think the price of flour may rise up to Tk 4,000 a sack in the upcoming week, which will be disastrous for businesses like us,” Rejaul said.