Despite adequate production in many cases, Bangladeshi consumers are paying significantly more for essential food items – rice, potatoes, onions, eggs, and broiler chicken – due to a fragmented and inefficient market system.
A recent study by the Bangladesh Bank revealed that supply chain distortions, poor storage management, speculative trading, delayed government interventions and rising input costs were collectively driving up retail prices.
While farmers occasionally benefit from high prices, consumers are consistently left burdened as weak market oversight allows costs to multiply across each layer of intermediaries. The result is a system where food moves from fields to tables through a chain riddled with inefficiencies, leaving consumers to absorb the fallout.
Based on a pilot survey across 14 districts, the report highlighted impact of floods, speculative stockpiling and inadequate supply chain management on price volatility in an economy where agriculture accounted for 11.55 per cent of nominal GDP in FY24.
Rice, a staple comprising 10.84 per cent of the Consumer Price Index, saw retail prices for coarse varieties surge by 18.8 per cent from 2023 to 2024 despite a strong harvest.
Floods during Aman season, pest attacks, rising fertiliser and pesticide costs, and thefts of irrigation infrastructure undermined cultivation.
Besides, many farmers in Naogaon, once a major rice-producing hub, shifted to mango and potato due to repeated losses.
Meanwhile, rice millers, facing higher electricity and labour costs and interest rate hikes on loans, passed the burden to the market, the study revealed.
Government rice procurement fell short of targets and delayed imports created supply gaps.
Retailers reported over 18-per cent increase in coarse rice prices from 2023 to 2024, with fine rice rising by over 13 per cent, showing the impact of cumulative stress across the chain.
Farmers earn high profits, up to 85 per cent for fine rice, but intermediaries like forias and aratdars add slim margins, while rice millers profit from by-products.
Speculative hoarding during shortages and limited foreign exchange for imports exacerbate price spikes.
The report suggested timely rice imports, as implemented in October 2024, to stabilise prices, alongside transparent pricing and better credit access for farmers to boost production resilience.
The potato market tells a different but equally troubling story. Although farmers in Rangpur, Bogura and Munshiganj earned healthy margins, 66 per cent on house potatoes by selling at maximum Tk 50 a kilogram, prices at the consumer level skyrocketed in late 2024, reaching up to Tk 90 a kilogram.
The surge followed August–October floods that wiped out vegetable crops, pushing consumers toward potatoes as an alternative.
This demand spike, combined with speculative holding of cold-stored potatoes, caused market imbalances.
Yet the study showed that much of the profit remained with growers, not intermediaries, indicating that the lack of coordinated release from cold storage was a key failure.
Without government oversight on cold storage gate pricing or planned release strategies, prices spiralled unchecked.
The study warned that an expected surge in potato production in 2025 – motivated by last year’s high returns – could lead to a price crash and major grower losses unless carefully managed.
It recommended phased cold storage releases and price ceilings from July to November to curb profiteering, alongside imports during October-November to address supply gaps without harming local farmers.
Onions, a sensitive kitchen staple, remain a flashpoint for inflation despite Bangladesh being the world’s fifth-largest producer.
In December 2023, prices reached an alarming Tk 250 a kilgoram, only to collapse the following season.
The study pointed to an overreaction by farmers, who, encouraged by the previous year’s windfall, expanded Murikata onion cultivation.
But this highly perishable variety flooded the market during the January 2025 harvest, forcing farmers to sell at a loss. Average production cost stood at Tk 54 a kilogram, while the market price fell to Tk 41.
The report highlighted that while public perception blamed hoarding, the real issue lied in the inability to stabilise supply-demand dynamics and extend shelf life.
The report advocated for imports in September-October, when supply is low, and promoting onion paste to reduce post-harvest losses, ensuring price stability without undercutting local producers.
Egg and broiler chicken prices are driven by feed costs, which account for 74 per cent of egg and 64.8 per cent of broiler production expenses. The feed costs are heavily influenced by global maize and soya bean markets
Smaller farms suffer more – lacking access to bulk deals, they pay higher rates for chicks, medicine and feed, often on credit. These producers see higher per-unit costs and lower profits, pushing prices up further.
Retail margins remain narrow, showing that end-user price hikes are mainly the result of cost push from upstream.
Imported feed ingredients, inflated by dollar price spikes and inefficient port handling, escalate costs.
The study urged government incentives for feed mills, reduced import duties and improved port efficiency to lower costs.
Across all segments, the study found that while farmers often made healthy profits when conditions aligned, their income was highly unstable. Meanwhile, the role of intermediaries – forias, aratdars, millers and wholesalers – continues to inflate costs without adding much value.
The system lacks transparency, efficiency, and coordination. Poor infrastructure, minimal cold storage regulation, speculative trading and delayed imports all create conditions for prices to swing wildly, often to the detriment of both farmers and consumers.