Further rise in rice prices likely

Prices of rice may rise further as Aman harvest has already failed to tame the uptrend in the domestic market, traders say.

They had predicted that the price may fall after a harvest of the Aman paddy but that is not happening at all.

Floods ruined 591,647 hectares of Aman paddy field in 32 districts this year, according to a government estimate in August.

Rice market heated up in that month, prompting the government move to import rice to curb the market.

Traders and governments then said prices would fall after harvesting of Aman paddy in the country.

Despite the beginning of the Aman harvest, no sign of rice prices falling was observed from last month.

Mirpur rice trader Mohammad Mohiuddin Harun said on Thursday new rice is now retailing at Tk 40-41 per kg.

On the other hand, it retailed at Tk 32-34 per kg last year, down by Tk 7 to 8 from this year, he said.

Harun said prices of a 50kg sack of coarse rice have risen to Tk 2,050-2,070 from Tk 2,000 in a week.

As such, the prices of other types of rice have risen by around Tk 50 per sack in the past week, he added.

Comparing the price to that of last year, the trader said, a 50kg sack of rice has risen in price by Tk 400.

Biplob Hossain, manager of Badda’s Satarkul Rice Agency, has predicted a further rise in the rice price.

Rice prices fall with Aman harvest every year but it has not happened for the past few months, he said.

Farmers have gotten a good price and so prices were supposed to go down, he said.

The trader said they think that the market would see a further rise in rice price at the end of this season.

Besides flood factor, high tariffs on imports and depletion in rice stocks have led to the high rice price.

The price of coarse rice is currently selling at Tk 55-58 per kg while fine grain rice is selling at Tk 65-70.

On September 19, the government inked a deal with millers and traders on lower import tariff on rice.

In the wake of this deal, the retail price of fine grain rice fell to Tk 60 and coarse rice decreased to Tk 40.

Traders had then said they expected rice prices to fall after the Aman harvests.

A government procurement move also resulted in a rise in the price of rice at the mill gates in November.

On November 30, the government announced a purchase of 300,000 tonnes of rice from domestic market.

Soon after the procurement price was set at Tk 40 per kg, the price at the mill gates rose to Tk 41 per kg.

Millers say that, prior to the announcement of the government’s purchase, the price of new rice was Tk 700-750 per maund, which was the price last season.

The price of rice rose to Tk 900-1,000 per maund afterwards.

“Rice prices this year are good,” said Belayat Hossain, a farmer from Narail. “We can make a bit of profit.”

Rice production is low due to the high price, say farmers and agriculture officials.

The harvest was also affected by floods in several districts and pests.

The Aman harvest began in the first week of November.

The Department of Agricultural Extension put the rice harvest at 80 per cent until first week of December.

In fiscal 2015-16, Aman rice was harvested on 5.59 million hectares of land across the country.

The total harvest was 13.483 tonnes of rice, according to Khondker Mohammad Rashed of DAE’s Field Services Wing.

Bangladesh produced 13.656 tonnes of rice on 5.58 million hectares in fiscal 2016-17.

Though Aman rice was planted on 5.77 million hectares this year, the total amount harvested has not been calculated yet due to flood damage.

The information will be available at the end of December, according to a bdnews24 report. 

Md Layek Ali, a Joypurhat-based miller, said 90 per cent of the rice in his district has been harvested and is arriving in the market.

But the price of rice is nearly Tk 200 per maund higher than last year, he said.

The miller, however, called the increased price ‘positive’, adding that the yield had been lower.

“Farmers can make a profit by selling the rice at Tk 24 per kg. But as the government has set the price at Tk 39, the minimum market price is Tk 25.”

The Trading Corporation of Bangladesh estimates the rice price to be 12 per cent higher than last year.

Rice mill owners and rice traders say Aman rice prices are 23 per cent higher than last year.