Non-coarse rice prices start creeping up as OMS goes on

FT ONLINE

 

Prices of rice, especially those of fine quality, increased again at the retail level, straining purses of fixed-earning consumers.

Factory-gate and city wholesale prices of coarse rice also increased, but its impact on the retail markets remains minimal, according to the traders.

Low rice production in the Aman season, poor market monitoring and negligible distribution share through the government channels are causing the price rise, said experts.

Non-coarse varieties such as Jeerashail, Miniket and Najirshail were selling at Tk 60-Tk 64 (Rangpur) a kg; Tk 65-Tk 72 (Dhaka) a kg, medium quality at Tk 50-Tk 52 (Rangpur); Tk 56-Tk 60 (Dhaka) a kg across the country on Monday- a Tk 2.0-Tk 3.0 increase in the last one and a half weeks.

The data from the state-controlled Trading Corporation of Bangladesh (TCB) showed a 2.0 to 4.0 per cent hike in rice prices during the period.

Coarse rice sold at Tk 41-Tk 43 a kg in factory-gate in Naogaon, Jaypurhat, Rangpur, Dinajpur, Pabna and Kushtia-a Tk 1.5-Tk 2.0 hike in the last seven days, according to the Bangladesh Auto Major Husking Mill Owners Association, a platform of the country's 18,000 rice-millers.

However, the impact of the hike in coarse variety at the wholesales has not yet been felt at the city retail level. Coarse rice sold at Tk 46-Tk 52 (Dhaka) a kg in the capital on Monday.

Mohammad Asadullah, a Babubazar-based rice wholesaler, told the FE that prices of all kinds of rice increased in the last two weeks at the factory-gate.

He said coarse variety rice also increased at the wholesale level. The price might begin to rise with the end of the older stocks of the retailers, he added.

He said Swarna was selling at Tk 47.5 a kg at Babubazar and Badamtoli on Monday from Tk 46.0 a kg a week ago.

KM Layek Ali, secretary of the husking mill owners' group, told the FE that Aman production declined significantly this year amid flooding.

He said Aman paddy traded at Tk 900-Tk 1,020 (Swarna) a maund and Tk 1,350-Tk 1,450 (Najirshail) a maund (40 kg) during the harvesting period from November to January last.

He said that milling cost of Swarna is now Tk 41.0 a kg and Najirshail Tk 60 a k,g which was less than Tk 34 and Tk 52 a kg respectively of the last year.

Prices of rice increased at a time when the government's open market sale of coarse rice went on across the country.

The state-run directorate general of food (DGoF) started the OMS operation from March 6 through its 811 dealers across the country, 120 of which are in the city. They are selling the items from trucks at various points.

Each truck is distributing one tonne of parboiled rice and one tonne of flour (atta). The rice sells at Tk 30 a kg and flour (atta) at Tk 17 a kg. A person can purchase 5.0 kg of each of the items.

Vice president of the Bangladesh Agri Economists Association Prof Golam Hafiz Kennedy said the association's ongoing market study showed the daily sale of coarse rice could be 40,000 tonnes across the country.

He said 800 tonnes open sale a day was "very insignificant" compared to the country's total demand for 82,000 tonnes a day including coarse, medium and fine-quality.

He said if the government's share would have been minimum 10 per cent of the demand it could leave "some impact" on the mainstream market.

Taufiqul Islam Khan, research fellow of the think-tank Center for Policy Dialogue (CPD), said the government had to admit the production of rice declined remarkably in the Aus and Aman seasons.

He said the CPD study found some 9.0 per cent of croplands was damaged by monsoon floods in the Aman season.

Bangladesh Bureau of Statistics, the government statistics provider, should publish Aman output immediately to help policy makers take timely actions, he said.

He also said both importers and millers would have to be brought under regular monitoring to avoid any market distortion.

Farmers will have to be provided with incentives in the ongoing Boro season to get additional production, he suggested.

Head of the food directorate Md Badrul Hasan told the FE that it has now a record stock of 1.1 million tonnes of rice.

He said another 0.09 million tonnes of rice would be released at the docks within a few weeks.

There will be no scarcity of rice at public warehouses as they will purchase another 1.0 million tonnes in the upcoming Boro harvesting season, he added.

He said import costs of rice were now US$ 388 to $ 430 a tonne (Tk 33 to Tk 37 a kg).

The country has imported a record 3.4 million tonnes of rice so far in the current financial year, the government data showed.

Last year, rice prices hit an all-time high in Bangladesh as coarse variety sold at Tk 55 a kg while finer quality at Tk 78 a kg then, according to the corporation.

The current rice prices in the country are still 15 to 28 per cent higher than the prices a year ago.