Despite high yield of Boro paddy, adequate stock in government warehouses and low price at the international markets, rice prices are remaining high in Bangladesh, putting pressure on the low-income people who are suffering due to the pandemic-induced slowdown of economic activities. Usually, rice prices fall during Boro harvest since more than 55 per cent of total rice output is produced during this season. But this year rice prices didn’t fall, rather continued to rise even before the harvesting period ended.
The government agencies’ earlier claims about increased production of the staple grain in the last three crop seasons — Aus, Aman and Boro — raised questions among the consumers. Estimates by the Bangladesh Bureau of Statistics (BBS) and Department of Agricultural Extension (DAE) showed that the country produced 6 per cent more rice year-on-year to 3.86 crore tonnes in fiscal 2020-21. Policy makers however linked the price hike to a slow release of grains by farmers from holdings, and stocking by a section of middlemen and millers, as uncertainty looms large over the lingering of the pandemic. According to the latest report of the UN Food and Agriculture Organization (FAO), the rice price is the highest in Bangladesh than India, Pakistan, Thailand and Vietnam.
The countrywide lockdown since the beginning of this month destroyed income opportunities of a large section of the population, including micro and small businesses, hawkers, transport workers, rickshaw pullers and day labourers. Against this backdrop, the Food Ministry has decided to allow private importers to import 10 lakh tonnes of rice at 25 per cent customs duty in order to increase supply of the cereal in the domestic markets to contain the prices. Presently, the customs tariff on imported rice is 62.5 percent. Bangladesh can import coarse varieties of rice at lower prices than the local market prices. The price of coarse varieties of rice reached Tk 50 per kg in the local markets whereas the import cost will be at Tk 33-40. When asked why rice prices are on the rise, a rice mill owner blamed the middlemen, saying they are stocking paddy and rice.
As the purchasing power of the poor has dropped due to the pandemic, they may be consuming less food due to the high price of rice. We want the government to increase the distribution of rice under the social safety net programmes to ease the pressure on the low-income people. This will also reduce pressure on local markets and help stabilize prices.
