Rice millers, traders cash in on diesel price hike

Staple price surges by Tk 5.0-8.0 a kg

| Updated: August 16, 2022 15:11:45

Rice millers, traders cash in on diesel price hike

Rice has witnessed a price surge as millers and traders are allegedly making more profits taking advantage of the latest diesel-price hike, while coarse rice hit maximum Tk 58 a kg in the city retail markets on Monday, marking a Tk 8.0 a-kg rise in a week.

The latest 42.5 per cent hike in diesel price by the government has caused a surge in carrying cost of rice by Tk 0.5 to Tk 2.5 a kg depending on distance, but millers raised price by Tk 5.0-6.0 a kg in a week, according to market insiders.

The mill-gate price hike has affected the city retail by Tk 6.0- 8.0 a kg in a week as coarse rice was sold at Tk 54-58 a kg, medium at Tk 62- 65 and finer rice Tk 75- 98 a kg, according to the city groceries and chain shops.

Coarse rice of hybrid varieties was sold at Tk 54-56 a kg while Swarna at Tk 56-58 a kg, medium variety BRRI dhan 28 rice at Tk 62-66 a kg and non-branded common finer varieties like Jeera, Miniket, parboiled Banglamoti (BRRI dhan 50) and Nazirshail at Tk 72-92 a kg.

Branded finer rice varieties were retailed at previous high of Tk 84-98 a kg, according to trading sources.

According to the Bangladesh Truck Covered Van Owners Association and Bangladesh Bus Truck Owners Association, fares of goods-carrying vehicles have increased by 30-40 per cent due to the diesel price hike.

Morshed Ajam, a Rangpur division based truck owner, told the FE that rice transport fare had increased by Tk 0.5-2.5 a kg depending on distance.

Secretary of Bangladesh Auto Major Husking Mill Owners Association K M Layek Ali also recognised that the carrying cost of rice had increased by maximum Tk 2.5 a kg for the diesel price surge.

Apart from diesel, prices of paddy have also increased by Tk 5.0-6.0 a kg in the last one and a half weeks, he told the FE.

This has come as another blow for the millers as BRRI dhan 28 paddy was selling at Tk 1,400 a maund, while Jeera, Katari at Tk 1,850 a maund from last week.

Mr Ali said the millers had reviewed prices recently by Tk 3.0-4.0 a kg, in order to make adjustments with the diesel price hike.

If the paddy price continues to surge, the cost of rice might increase further, he said, adding that the production of rice in the Boro season was not adequate.

He said the import process should be made easier for now to tackle any possible shortage and the government should take special care on rice production in the ongoing Aman season.

Ishwardi-based rice miller M A Aziz claimed that the city retailers were charging much higher compared to the wholesale prices - this should be monitored.

He said they were delivering BRRI dhan 28 rice at Tk 53-54 a kg to city wholesalers while wholesalers were charging Tk 56-57 from grocers but retailers were selling those at Tk 65-66 a kg.

Farm economist and value chain expert Prof Golam Hafeez Kennedy said the existing 25 per cent import duty should be removed until October to bring in a good portion of rice from other parts of the globe.

He said only 20,000 tonnes of rice had been imported in the last one month while the government had set a target to import 1.1 million tonnes within October.

He said the tiny amount of rice import could hardly have any impact on the market.

"The global rice market is still in a good condition compared to that of other commodities and the government should take this advantage immediately," he said.

He said the state of local rice/paddy procurement from the Boro season as well as production scenario both in Aus and Aman seasons is not likely to be good this year - all these should be taken into consideration.

He also said Boro production data should be disclosed immediately by the Bangladesh Bureau of Statistics (BBS) to help take policies in ensuring the country's food security.

According to the Directorate General of Food, it has been able to purchase 1.1 million tonnes of rice and paddy so far against a target of 1.95 million tonnes within August 31.

S M Nazer Hossain, vice president of the Consumers Association of Bangladesh (CAB), said the government's diesel price hike by such a high margin had left an impact on poor and low middle-income people.

He opined that public interest was totally ignored while fixing the fuel prices.

The unscrupulous millers and traders are now cashing in on the untimely price hike of fuel, he said.

Apart from reviewing diesel price, strict market monitoring should be imposed both in the milling hubs and city wholesales and retails, he added.

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