Editorial

Why the hike in rice prices?

Update:

Perhaps the government can practice a little introspection as to why the price of rice has gone up, despite all efforts to keep it in check. Quoting the Trading Corporation of Bangladesh (TCB), the media reports that the price of coarse rice has gone up by Tk 1 per kg over the past one month. This wasn’t to have been so.

The rice market was supposed to have steadied because the government had cut import duty on rice from 28 per cent to 2 per cent. Not only did it make it easier for the private sector to import rice, but the government itself also began signing deals with various countries to procure rice. Rice has been imported both by the private traders and the government, but this has had no positive impact on the local market. In fact, rice prices continue to rise. Why is this so?

In the first place, the government’s efforts to thwart the threat to food security came late. Even after it took up the initiative, the food ministry worked at a lax pace. Three months after the decision was taken to import 1.5 million tonnes of rice, it was possible to store only 127,000 tonnes in the government godowns. And within the country, the government has been a failure in its grain procurement drive. The stock of rice is not increasing in the government godowns. After all that flurry of effort, till now the government stock is only 321,000 tonnes. This poor state of food stock could well be the cause behind the inflated rice prices. Economists say if the government food stock falls below 600,000 tonnes, this is bound to have a negative impact on the market.

It is assumed that the rice mill owners and the rice traders have at least 10 million tonnes of rice in stock, but are not interested in selling this to the government. After all, the government’s fixed purchase price is Tk 33 per kg, far less than the market price. They have appealed to the government to raise this to Tk 35 per kg. If the government can import rice from abroad at Tk 40 to Tk 45 per kg, why can they not purchase this at Tk 35 per kg within the country?

It is imperative for an immediate decision to be taken in this regard and also to speed up the process of rice import on both a government and a non-government level.

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