Short stock causes rice price hike

An existing supply crunch plus the government failure to meet procurement target of rice and paddy from millers and farmers has shot the rice price up in the market, according to Citizen’s Platform for SDGs, Bangladesh.

The think tank that pushes the agenda for Sustainable Development Goals came up with the observation on Wednesday at a webinar titled -- Why is rice price increasing? Whose profit, whose loss?

They thought if the government was able to procure rice and paddy from farmers instead of middlemen like millers and managed sufficient stock, rice price could be kept under control.

Speaking at the programme, Debapriya Bhattacharya, convener of Citizen’s Platform for SDGs, Bangladesh said: “The government procurement campaign in order for reining in prices has not been successful. Rice is a very sensitive product and the state has responsibility to control its price – the hike of which contributes to inflation.”

According to former research director of Bangladesh Institute of Development Studies (BIDS) M Asaduzzaman, everyone talks about agricultural product to counter Covid-19, but nobody talks about the sorrows of the farmers.

There is no guarantee that an ample supply of the staple will benefit farmers, rather it will help millers and hoarders, he pointed out.

Drawing a reference to Fiscal Year 2019-20, Asaduzzaman said some 12 to 13 lakh food stock helped address the demand during the pandemic as that amount was used as relief for the poor and vulnerable groups.

Highlighting the mismatch of food grain in government warehouses, the researcher argued that, “Food grain stocks in government silos have reduced drastically. Of the 8 lakh tons of Boro procurement target, the government could manage only one-fourth of it.”

The authorities allowed rice import by reducing duty which has also failed as no rice has been imported so far, thus leading to its price hike, he observed.

In his address, media personality Shykh Siraj said rice price spiral is putting additional pressure on the lower-income people while farmers are not benefitting from it.

The agriculture development activist noted that public stock came down to 5 lakh tons and coarse rice is now selling at Tk 45 to Tk 50 which was Tk 42 to Tk 43 last week.

A maund of paddy now sells at Tk 1600 which was sold at Tk 1000 to Tk 1100 last week. There is no stock of rice and paddy with the farmers but the staple grains are now with millers and hoarders.

Director General of Bangladesh Rice Research Institute Md Shahjahan Kabir asserted that nobody is taking responsibility of rice price hike despite having 30 lakh tons of food grain surplus by June 30.

“The notion of price spiral due to lower production is not true. There are many seasonal traders who create artificial crisis in the market,” he hinted.

Rice Exporters Association president Shah Alam Babu stated that only a certain number of people were allowed to import rice which didn’t bring any good result.

He suggested that the government should allow more importers, and if the import duty can be brought down to 20 per cent instead of 25 per cent, everyone will be benefitted.