A bumper yield of paddy and the government’s move to cut import duty on rice has failed to create an impact in the market thanks to the hefty profit margins maintained by the importers and traders.
The government has cut the duty on import of rice to 15 per cent from 25 per cent to rein in spiralling prices.
The government has imported around 572,000 tonnes while traders imported some 786,000 tonnes of rice in the 2020-21 fiscal. Despite the huge stock, rice prices remain high in the market.
To control the rice market, the government allowed rice import and increased government rice stock to 12.3 lakh tones till 12 August but the price of rice is still high in the local market.
The fine varieties of rice were selling at Tk 60-65 per kg, medium-quality rice at Tk 55 per kg while coarse rice was selling at Tk 47-50 per kg in the city on Monday.
The price of fine quality rice is 14.29 per cent higher compared to the corresponding period of last year, the price of medium quality rice was 12.77 per cent higher than the same period last year and coarse rice price was 11.76 per cent higher than the same period last year, according to Trading Corporation of Bangladesh (TCB) data.
Agri economist Prof ASM Golam Hafeez said a section of millers is responsible for the price hike of rice despite a good paddy production.
“The frequent price hike of rice affected the middle and lower-income groups during the crisis,” he said, adding that cashing in the Covid-19 crisis, the millers hiked the price of rice when the paddy stock gone to their hands.
“Though the country witnessed bumper production in the last few seasons, most of the paddy is now stocked by the middlemen,” he said, adding that a slower release of the stock increased the prices of rice.
Food Minister Sadhan Chandra Majumder on Monday said the businessmen have the tendency to make higher profits even in the middle of a pandemic.
“We are more focused on the ways to make more profits. It is not just rice, they want to get more whenever they get a chance,” he added. He also said the government has decided to cut the total import duty on rice and import rice through private channels in a bid to rein in prices of the staple in the local market.
This year, the production of Boro paddy has increased by more than 11 lakh tonnes.
In total, Bangladesh produced 6 per cent more rice year-on-year to 3.86 crore tonnes in FY 21 , according to an estimate by the Bangladesh Bureau of Statistics (BBS) and Department of Agricultural Extension (DAE).