Rice price spike: Retailers blame millers for rigging

Rice prices rose by Tk 2 to Tk 4 per kg at retail level amid the COVID-19 epidemic despite a bumper harvest of Boro. Almost everybody says millers are to blame.

Mill owners, however, cite a spike in paddy prices as the reason for price spirals at the retail level.

The price of Nazirshail and Minicate rice rose by as much as Tk 4 over the course of a week to Tk 54 and Tk 68 per kg on Friday, according to data from the Trading Corporation of Bangladesh. The price of medium-grain Paijam rose by as much as Tk 3 to Tk 45 per kg.

According to retailers in Dhaka, rice millers have increased the prices of a 50-kg sack of rice by at least Tk 200 in the past month.

Mill owners say rice prices have risen because the price of rice paddy rose in the Boro season after the government fixed the price for purchases.

But there are doubts over their claim. The practice of setting prices by the government for purchase is nothing new. It happens every year. And the price set this year for Boro is the same as last year.

Three days ago, Food Minister Sadhan Chandra Majumder warned rice millers that they were not providing Boro rice at the contract prices, which indicates that the owners are manipulating prices.

The minister is aware of the industry’s workings due to his family’s background in the rice business.

The government planned to purchase a total of 1 million tonnes of rice in the Boro season at Tk 26 per kg. The price is the same as last year, but the amount purchased by the state has risen by 200,000 tonnes. The bumper crop of Boro should have resulted in an increased supply in the market, meaning there is no clear reason for the price hike.

The price of rice remained steady for about 10 days after the harvest, said Mohiuddin Harun, a rice retailer at Mirpur’s Shah Ali Market.

“The price of rice paddy increased this year, but the rising price will help farmers and the agricultural sector,” said Shahidul Islam Patwari, vice president of Bangladesh Auto Major and Husking Mill Owners Association.

The price of rice rose in accordance with the rising price of paddy, Shahidul said.

bdnews24.com also spoke to Layek Ali, general secretary of Bangladesh Auto Major and Husking Mill Owners Association.

“The government set the price of paddy at Tk 1,040 per maund. If we take that into account the price of rice is rather low, or at the correct level,” he said.

But neither of them was able to give clear indications of how much the price of paddy increased.

It is clear from the words of Mohammad Sulaiman, a farmer in Kushtia, that rice mill owners are purchasing rice at far below the contract prices.

Sulaiman said he had harvested Boro rice on 20 bighas of land this year. He sold paddy to the mills at Tk 850 to Tk 900 per paund.