Traders hiked rice prices on excuse of floods

TDS Desk:

The August floods in the country’s southeastern region and the ongoing floods in Mymensingh have caused an estimated loss of about 10.87 lakh tonnes of rice production, primarily Aman, according to agriculture ministry damage reports.

In response, the government has initiated the import of 5 lakh tonnes of rice and is expected to allow private imports soon to ensure food security and stabilise prices, which have increased by Tk 5-6 per kg over the past month.

Alongside rice, more than 2 lakh tonnes of vegetables and other crops, including peppers, have been affected. According to ministry reports, total nationwide losses for all crops from two rounds of flooding are estimated at around Tk 4,500 crore.

Meanwhile, flood-related loss and supply disruption have driven up prices for essential items — rice, vegetables, eggs, and broiler chickens — affecting average consumers.

Making hay of the flood situation, traders have raised rice prices by Tk 5-6 per kg in two to three increments over a month, consumers claimed.

Floods in the southeast began in mid-August, severely damaging Aman rice production. In recent weeks, heavy rains and upstream waters flooded four districts in Mymensingh Division: Sherpur, Jamalpur, Netrakona, and Mymensingh.

File Photo

According to food ministry data, the government currently has rice stocks of around 12.16 lakh tonnes and wheat stocks of 4.69 lakh tonnes.

However, the rice stock is gradually depleting as the government distributes rice to one crore families each month at subsidised prices via the OMS programme.

To tackle the impending shortage and price hikes, the Chief Adviser’s Office authorised the food ministry to import rice under the G2G modality.

The ministry also sent a letter to the National Board of Revenue on 29 September, requesting a reduction in import duties from 62.5% to 5% for allowing private imports.

In the letter, the food ministry said the severe floods affecting Aush-Aman production in 14 districts could trigger a price surge if private imports are not facilitated.

Since international rice prices exceed local prices, it is crucial to lower the import duty to encourage rice imports; otherwise, private imports cannot be supported.

Masudul Hasan, secretary to the food ministry, told that the NBR has yet to make a decision on the tariff reduction.

“We have officially initiated the process of importing 5 lakh tonnes of rice. While private imports are under consideration, the quantity has not been determined yet,” he added.

Agricultural economist Jahangir Alam Khan told that due to the current volatility of rice prices, some consumers may switch to wheat, as flour is cheaper.

The government should increase rice supply and boost wheat imports as well, as international wheat prices are low, he added.

WHAT CONSUMERS AND TRADERS SAY ABOUT RICE PRICE HIKE

Ariful Islam, a resident of Rampura in Dhaka, told that, “I bought a 50 kg bag of BR-28 rice two months ago for Tk2,650, but now it costs Tk3,000 — an increase of Tk250 per bag.”

Similarly, medium-quality fine rice, which previously sold for Tk64-65 a kg, is now priced at a minimum of Tk70. Coarse rice is currently available for at least Tk55-56 per kg.

According to the state-owned Trading Corporation of Bangladesh, the price of coarse rice has risen by 7.14% compared to the same time last year.

To purchase the best quality fine rice, consumers now need to spend Tk80 or more, up from last year’s price of Tk75.

Although consumers blamed traders for raising rice prices using the flood as an excuse, traders said otherwise.

Nirod Baran Saha, president of the Naogaon Paddy-Rice Traders Association, told that, “The stock of Boro paddy is running low. As farmers lack paddy, supply to the market is inadequate, resulting in rising prices.”

“In the past month and a half, the price of medium quality rice in the wholesale market has increased by Tk3 per kg, while fine rice has risen slightly, now selling for Tk 68-70 per kg,” he added.

Officials from the agriculture and food ministries said that the floods have mainly damaged Aman rice production.

According to the agriculture ministry’s damage reports, around 8 lakh tonnes of rice — 7 lakh tonnes of Aman and 1 lakh tonnes of Aush — have been damaged in the southeastern region while about 3 lakh tonnes of rice have been damaged so far across four districts in Mymensingh.

Agricultural economist Jahangir Alam Khan said that this year’s rice production will not meet the government’s target.

“Floods have prevented Aman from being planted in many areas, and late planting will also lead to reduced production in some regions,” he said.

MYMENSINGH FLOOD IMPACT EXPECTED TO WORSEN

Concerns are growing that flash flood damage in Mymensingh will worsen. At least 30 upazilas across the four districts have sustained substantial losses.

Among the four affected districts, Sherpur has experienced the most significant destruction. In Nalitabari upazila of Sherpur, the target for Aman cultivation was 23,253 hectares, which has been fully met.

But 15,100 hectares of Aman crops were destroyed in the flood, resulting in a production loss of 69,762 tonnes of rice, according to the Ministry of Agriculture.

The agriculture ministry set a national target of 59.668 lakh hectares for Aman cultivation this year. However, crops were completely destroyed at an average rate of 14.50% across 23 districts in the flood-affected southwestern region and four districts in Mymensingh.

A senior official from the Ministry of Agriculture, speaking to        on the condition of anonymity, said, “We have created new paddy seedbeds for farmers in the southeastern region and decided to distribute free fertiliser and cash, with Tk165 crore allocated for this purpose. However, there is no time to plant Aman seeds in areas affected by the Mymensingh floods.”

The flood impact extends beyond rice to vegetables, with no vegetables available in the Dhaka market for less than Tk 80-100  a kg. Some vegetables cost even higher.

Mohammad Azad, a retailer at Karwan Bazar, said, “Vegetable truck arrivals at Karwan Bazar are down by 50% compared to normal times. The supply is low, but demand from wholesale buyers is high, which is driving prices up.”