Photo: Collected
The price of rice, a staple food for millions in Bangladesh, has seen a troubling rise despite an ample supply in government storage facilities. This paradox has emerged against the backdrop of ongoing Aman and Aush rice harvests, which typically boost the availability of fresh paddy rice. Yet, the rising costs persist, reflecting a complex web of market dynamics and institutional failures.
As of September 15, the price of rice in various markets across the capital, including Karwan Bazar, Hatirpool, Badda, Rampura, and Malibagh, has surged by Taka 3 to Taka 6 per kilogram within just a week. For instance, BR-28 and BR-29 varieties are now priced between Taka 60 and Taka 65 per kilogram, up from last week's rate of Taka 58 to Taka 60. Medium-quality Miniket rice has climbed to Taka 70 to Taka 75 per kilogram, while high-quality Miniket rice commands a price of Taka 80 to Taka 85 per kilogram. Nazirshail rice, which is a premium variety, is similarly priced, with Desi Basmati rice reaching up to Taka 90 to Taka 95 per kilogram.
The situation is particularly grim for low-income consumers. Swarna or Paijam rice, traditionally a staple for this demographic, has risen from Taka 55 to Taka 58 per kilogram. This rise contrasts sharply with prices from the previous season, when BR-28 and BR-29 rice were sold for Taka 58 to Taka 60 per kilogram, and medium-quality Miniket and Nazir rice ranged from Taka 65 to Taka 70 per kilogram. Even higher-quality Miniket and Nazirshail rice had prices between Taka 75 and Taka 82 per kilogram.
The root causes of the price increase are multifaceted. According to a wholesale trader in Karwan Bazar, the recent surge can be partly attributed to the large-scale distribution of rice to flood victims in 14 districts, including Cumilla and Noakhali. Additionally, international market fluctuations have contributed to the increase. The price of a 50 kg bag of rice has reportedly surged from Taka 150 to Taka 300, exacerbating the crisis.
Wholesalers and traders argue that they are forced to raise prices due to increased procurement costs. They also point to the failure of the Sheikh Hasina-led government to dismantle the rice syndicate as a key factor driving up prices. This syndicate, dominated by large companies, is alleged to manipulate the market by hoarding stock, leading to artificially inflated prices. Smaller rice producers, who struggle to access loans, are particularly vulnerable to these manipulations.
Investigations reveal that major rice-producing companies are contributing to the problem by stockpiling paddy and rice in key regions such as Rajshahi, Kushtia, Naogaon, Dinajpur, Pabna, and Bogra. Traders have called for the opening of letters of credit (LCs) for rice imports to alleviate the pressure on the domestic market and break the syndicate’s hold.
Sajib Howladar, a buyer from Rampura market, expressed frustration with the government's failure to regulate rice prices effectively. Despite the availability of sufficient rice, the market is being manipulated by large companies creating an artificial scarcity, which impacts small traders and consumers alike. Saidul Alam, another trader, warned that without proper market oversight, price instability could persist until October, though he is hopeful that prices might drop as the Aman harvest reaches its peak in November.
Government data indicates that as of September 15, there are 1,481,000 tons of rice in storage. Although this is less than the previous year’s stock, it is deemed sufficient for the next three months. The USDA has noted that while there is a slight market shortage, the overall instability is expected to resolve in about two months.
Md Dolon, a rice trader from Old Dhaka, criticized previous government efforts to tackle the rice syndicate, attributing the current crisis to systemic failures in market regulation. Shahadat Hossain echoed these concerns, stressing the need to dismantle the syndicate and implement rigorous market monitoring to stabilize prices.
Shaheen Mia, the owner of Messrs. Jonoprio Rice Agency, suggested that the government needs to enforce strict measures on all rice-storing institutions and reduce costs associated with pesticides, irrigation, and labor.
This approach could help reduce production costs and, consequently, the retail price of rice.
In conclusion, while the current increase in rice prices in Bangladesh can be traced to both domestic and international factors, the failure to control market monopolies and effectively manage stockpiles plays a significant role. As the Aman harvest progresses and new policies are considered, there is cautious optimism that the rice market may stabilize, bringing relief to consumers and traders alike.
Messenger/Disha
