Agri Commodities

Rice Prices Hit Record High In Bangladesh, Despite Good Production

Located in the Southern part of Asia, Bangladesh has been the third-largest Rice producing country in the world for the past four years without fail. Last year alone, the country’s rice production stood at approximately 38.4 million tonnes. However, despite the increased production, there is no indication of relief to domestic rice buyers. The harvesting of Aman paddy has already been completed. Besides that, Boro season has begun and yet the price of rice in Bangladesh is at a record high. According to the previous market trends, usually, the price of rice keeps falling during the harvesting season. However, it has been different this time around. 

The price of rice and flour (the staple food of Bangladesh) is increasing which is helping traders and Rice Exporter owners to earn a huge chunk of profits. As per the article published by USDA (United States Department of Agriculture), the recent price of coarse rice is Tk 52 per kg since the second week of December. This is approximately 4 to 5 percent higher in comparison to last year’s rice prices. 

Market Price Of Rice 

The market price of rice in Bangladesh is increasing due to the high production rate. As per the agriculture ministry, the production expense of one kg of coarse rice is around Tk 40-42. However, TCB (Trading Corporation of Bangladesh) records that the selling price of rice in the market is Tk 46 to 52 per kg. As per agricultural economists, the variation between production expenditure and the consumer-level price is Tk 3 to 5 per kg and a big part of the auxiliary gain goes to traders and rice mill owners. According to economists, rice mill owners and traders are profiting too much due to which the prices of rice are not decreasing during the peak season. 

Professor at Bangladesh Agricultural University Mohammad Jahangir Alam said, Despite the increasing production cost, farmers, as well as mill owners and traders, are earning a good amount as profit from the market selling price due to which the rice prices in Bangladesh are not coming down. It is resulting in high living costs for poor people in Bangladesh and malnutrition because of the people not purchasing nutritional food crops due to high prices.” 

High Production Leading To High Cost 

According to BRRI records, there was a reduced rice harvest during the previous Aush and Boro seasons due to natural disasters. Owing to reduced yield the Government of Bangladesh has set a target of producing 1.61 million tonnes of rice in the Aman season. However, favorable weather facilitated extra production of rice crossing the targeted quantity leading to the production of 2 Lakh tonnes or 16.3 million tonnes this Aman season. The surplus of 45 lakh tonnes of rice would be enough to fulfill the needs of the country till next June. According to Bangladesh Rice Research Institute, with an increase in rice production, the production cost of Aman has also increased by 10-15%. Therefore, the production expense of paddy is Tk 25 per kg and that of rice is Tk 40-42 per kg. 

Extra Rice Stock 

The Government of Bangladesh has stocked around 1.52 Lakh tonnes of rice. According to the Food Ministry, the Government has set a goal to collect 3 Lakh tonnes of paddy and 5 Lakh tonnes of rice during this Aman season. 

The bottom line 

Sattar Mandal, a professor at Bangladesh Agriculture University said that the increasing price of rice has a huge impact on 30 million low-income residents who live in big cities like Dhaka. Therefore, the government should run a social safety program and increase the food supply for them. Lastly, he also added that it is crucial to investigate whoever is gaining the extra profit from the high prices. 

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