A SHARP increase that rice prices have registered over a fortnight remains a cause for concern, especially for the poor and low-income people who are estimated to be spending 40–50 per cent of their income on rice. What remains further concerning is that rice prices have gone up when aman rice, which meets 40 per cent of the annual rice demand, is harvested. Rice prices have increased by Tk 5–10 a kilogram on both the wholesale and the retail market. Rice of medium quality sold for Tk 60–70 a kilogram on December 23, but the prices were within the Tk 56–62 ranges a fortnight ago. Whilst the standard variety sold for Tk 80–85 a kilogram, up from Tk 76–80 two weeks ago, the fine variety sold for Tk 90–100 a kilogram, up from Tk 85–90 two weeks ago. Traders say that the prices have gone up at the mill gate and millers have put the increase down to an increase in paddy prices, which is said to have resulted from a decline in the production of aman rice because of flooding and heavy rainfall in some areas of the country.
Economists and market analysts, however, say that rice prices have increased riding on the wings of a declining government stock, lack of market oversight and syndication of the rice market, which also includes corporate companies coming into play. They say that mill owners and wholesalers are fully aware of the declining buffer stock and are cashing in on the situation. Whilst a stock of 1.1 million tonnes of rice is considered the standard, food ministry data show that the stock now stands at 0.75 million tonnes. A Department of Agricultural Extension official says that 91.4 per cent of the aman harvest has been completed, with rice production having reached 16 million tonnes. Once the harvest is completed, the rice production is expected to reach 17.5 million tonnes, which would be 300,000 tonnes below the government target of 17.8 million tonnes, putting the shortfall down to the decrease in aman production because of flooding. Figures show that the situation is not that bad. The food secretary seeks to say that the buffer stock is increasing as the import by both the public and private agencies continues. And, the government withdrew the duty on rice import in November to increase the buffer stock. This suggests that only the withdrawal of import duty does not always work unless other measures are also taken.
Traders, however, urge the government to investigate the rice price spiral and take action accordingly to bring down rice prices. The government should, therefore, step up market oversight, increase the rice stock and break market syndication to keep the rice market stable. Corporate companies having been at play on the rice market has also been blamed for the price spiral. The government should, in such a situation, empower the Competition Commission to look into and deal with the issue of the corporate play of the rice market.
