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Rice prices up as paddy supply low in markets

02 April 2024

Paddy supply has dropped in local markets as Amon season stocks are almost exhausted. This in turn has caused rice prices to go up at all levels – including in mills, wholesale, and retail markets.

All types of rice prices, including the fine and coarse varieties, have increased by Tk 2 – Tk 4 per kg in the last two weeks.

Retailers however say there is less demand for rice during Ramadan, so there is no logical reason behind the rise in rice prices. The claim that the mill owners are increasing price prices on a whim.

Meanwhile, mill owners and wholesalers say Boro paddy harvest season will begin in areas such as Thakurgaon, Bogura, and Naogaon during the last week of April. When the supply of new paddy arrives in the local market, the price of rice will go down.

So, the rice domestic market may fluctuate for the next month, but there will be no shortage of the essential commodity.

On a spot visit to different rice markets – including the city’s Rampura and Malibagh areas – on Friday, The Business Post found that coarse rice (Sorna and China Eri) is being sold at Tk 52 – Tk 53 per kg, which was Tk 50 – Tk 51 a kg two weeks ago.

The price of medium quality rice (Paijam and BR-28) has increased to Tk 57 – Tk 60 per kg, from Tk 55-56 a kg recorded two weeks ago. In two weeks, the price of medium quality rice has increased the most in the market by Tk 2 – Tk 4 per kg.

The price of fine rice, such as Miniket and Nazirshail, has increased to Tk 64 – Tk 80 per kg, from the previously recorded Tk 62 – Tk 78 per kg.

Md Yunus, the owner of Maryam rice store in the capital’s Maniknagar market, said, “Every year, the demand for rice decreases a lot during Ramadan, as a result the price also decreases. Even if the price does not decrease, it remains unchanged, does not increase.

“But the scenario is different this year, as the price of rice has been increasing for the last two weeks. The rate increase escalated in the last one week. The price of rice rose by around Tk 100 – Tk 200 per sack (50 kg) in the last two weeks.”

The prices increased by around Tk 70 – TK 100 in the last one week alone, he added.

According to the Trading Corporation of Bangladesh (TCB), a kg of coarse rice has increased by Tk 2 to Tk 52 in the last one week. And fine rice is being sold at Tk 65 – Tk 73 per kg, increased by Tk 3 per kg.

Jahangir Alam, the owner of Purity Rice Mill and Agency in Thakurgaon, said, “The price of rice is determined by the auto husking mill owners. They had raised the prices two weeks ago, and now they have reduced it again.

“However, there is a logical reason for the rise in rice prices, the stock of last Boro season paddy is already exhausted, and the Amon season stock is almost over. The farmers have no paddy in stock right now.”

The supply of paddy in the market is very low, so the price has increased, impacting the market negatively, he added.

According to the Bangladesh Rice Research Institute (BRRI), an institution operating under the Ministry of Agriculture, the country can produce 4.12 crore tonnes of rice in the current FY24.

Of this figure, Boro occupies 2.9 crore tonnes, Aush 0.30 crore tonnes and Aman 1.70 crore tonnes. The demand of rice in the country is nearly 3.5 crore tonnes. According to the available data, there should be a surplus of 50-60 lakh tonnes of rice in the country.

On the other hand, according to the United States Department of Agriculture (USDA) report, at the end of FY24, rice production in Bangladesh will reach 3.63 crore tonnes. At the same time, consumption will stand at 3.76 crore tonnes.

So, the difference between consumption and production is 13 lakh tonnes. The figures indicate a big gap between USDA's production data and Bangladesh government's data on rice production.

Source : businesspostbd