Rein in rice prices, or lose food security

The government’s recent decision to allow private imports of rice and more than halving the import duty on this food grain has hardly made a dent in the runaway domestic market prices, which in turn puts the entire country’s food security at risk.

According to a report published by this daily on Sunday, after the food ministry began allowing rice imports from June 27, permissions were granted to 329 traders until July 13 for importing 0.906 million tonnes of rice at a 25 per cent duty.

Ministry sources further confirmed that 1,000 tonnes of rice have already been brought into Bangladesh through Bhomra, Hili, and other land ports, and the volume is expected to increase from Sunday.

But rice prices are still soaring in local markets at an unprecedented pace. During the past two weeks, the retail price of various types of rice, including Nazirshail, Miniket, BR 28, and Paijam, has gone up by Tk 2 – Tk 3 per kg in different markets, including those in Dhaka city.

Consumers are now spending Tk 72 – Tk 74 for per kg of normal quality Nazirshail rice, Tk 66 – Tk 72 for Miniket, and Tk 50 – Tk 52 for BR 28 and Paijam varieties.

There is no indication that the outrageous rice prices will go down in the coming days. Quite the contrary, almost all types of rice now cost Tk 2 – Tk 3 more per kg compared to the prices recorded two weeks ago. Traders are blaming the rising rice prices for slow imports, which is reportedly happening because of a number of factors, including various import conditions, rising import source prices, and higher duty rates.

Over four hundred traders had received permits to import 1.79 million tonnes of rice last year, but they could import only 0.305 million tonnes, though the duty was only 15 per cent at that time.

Many importers say that the existing rice import conditions – from the opening process of  LCs to bringing in rice within a time limit and introduction of a permit system for limiting the number of importers – might lead to insufficient imports like that of last year.

There might not be an easy solution to the rice price hikes, as importers point out that the rates in the import sources are high, which is forcing local traders to readjust their prices. The rising USD rates and high import duty further complicates the situation.

According to Bangladesh IPC Chronic Food Insecurity Report, published by humanitarian information portal ReliefWeb in June this year, over 58.5 million people in Bangladesh, representing 36 per cent of the total population, are facing Mild Chronic Food Insecurity.

Nearly 35 million people, representing 21 per cent of the total population of Bangladesh, face Moderate and Severe Chronic Food Insecurity, of which 11.7 million people or 7 per cent of the total population face Severe Chronic Food Insecurity.

Besides, 23.1 million people, or 14 per cent of the total population, face Moderate Chronic Food Insecurity.

Just when Bangladesh was recovering from the Covid economic shock, the Russia-Ukraine war triggered high global inflation, which in turn pushed up essential commodity prices across the globe.

This unfortunate series of events – coupled with the local traders’ dubious practices of price gouging and hoarding – is pushing a large segment of Bangladesh’s shell-shocked population – mostly the low income and marginalised groups – on the brink of starvation.

Bangladesh’s road to LDC graduation and economic prosperity will be a lot rougher if a lion’s share of the country’s people becomes unable to afford three square meals a day.

The government must take effective measures as soon as possible to rein in skyrocketing rice prices, such as offering greater policy support and incentives to importers and ensuring strict surveillance to curb hoarding and price gouging by market manipulators.

Without firm and immediate action in this regard, Bangladesh will be at a serious risk of losing the food security it worked so hard to achieve in recent years.