Aziz blames supply worries, profit taking for price hike

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FE Report
Rice price in the local market has started to decline after it sky-rocketed in the recent weeks due to worries over supply shortfall and 'profit maximising' by businessmen, a government adviser said Saturday.
"People's expectation on price hike and supply shortage for post-cyclone impact pulled up the prices of rice in the recent times," Finance adviser Mirza Azizul Islam told reporters.
Rice price soared by an average 20 per cent in the last week, retailers said, blaming hoarding by the millers and wholesalers for the abnormal hike.
In 2007 alone, rice prices soared by 60-70 per cent due to shortfall in production in the country and a massive spike in prices in the international market.
The adviser said worries that the floods and the November 15 cyclone would cause a massive shortfall in rice production coupled with profit taking by the businessmen resulted in the abnormal spike in prices.
"It is a natural tendency of businessmen to maximise their profits," Islam said, while answering a query whether the rice traders were to blame for the recent hike.
People's 'anticipation' that there would be supply shortfall in because of the cyclone also led to price hike, he said.
The agriculture ministry had earlier said the floods in July-September and the cyclone that hit country's southern districts would cause a shortfall of rice worth US $600 million.
The country was projected to produce 26.8 million tonnes of rice in the current fiscal. But the production has already fallen short of target by at least two million tonnes due to the successive natural disasters.
On Saturday, prices of rice has started to decline at the retail level after the government announced that it would import some 0.40 million tonnes of rice soon.
The prices are declining at the mill-gates and wholesale markets following increased supply as well from both local and foreign sources.
However, the downward trend of the wholesale prices have not yet made any impact on the retail in the capital city, where prices were prevailing as before, a market survey by the FE has revealed.
Some traders said the prices of different varieties of rice, particularly the coarse variety might fall substantially in the retail level within a day or two.
When asked about the current price of rice, millers in Naogaon Saturday said, prices of the coarse varieties of rice in the mill-gate went down by Tk 100-Tk 150 per maund (37.32 kg) while the fine varieties by Tk 100 per maund.
"Today price of best quality of Paijam and Najirshail rice in the mill-gate at Naogaon is Tk 1400- Tk 1450 per maund in place of Tk 1500-Tk 1550 a few days back. Miniket is Tk 1300-Tk 1360 per maund against earlier price of Tk 1380-Tk 1450 while coarse rice is Tk 1000-Tk 1100 per maund in place of Tk 1200-Tk 1300 per maund last week," Ahmed Ali Sardar, a rice miller in Naogaon told the FE Saturday.
Sine the government has taken some steps to ensure supply through imports from abroad, the price would come down further, Sardar stated.
Meanwhile, the price of fine rice Saturday in the wholesale markets in the capital went down by only Tk 30 and the coarse rice by Tk 50 per maund.
Nuru Miah, a wholesaler at the city's Babubazar said a lot of imported rice from India has been arriving in the markets over the last two days while the number of buyers decreased Saturday.
Jewel, another wholesaler in the Mohammadpur Krishi Market in the city also sketched the same picture about their markets.
Belal Hossain, a retailer at Kawran Bazar Saturday said he sold only 18 maunds of rice the entire day whereas his normal sale volume was 60-80 maunds per day in the past.
Sarwar Alam, Deputy Terminal Manager (General Cargo) of Chittagong Port Authority, said some 18,343 tonnes of rice were being unloaded from the three vessels in the port.
Another 7,000 tonnes of rice from Myanmar will arrive at the Chittagong port tomorrow, he said.
Besides, some rice traders said a convoy of trucks loaded with rice had arrived in Bangladesh from India through Benapole and Sona Masjid land ports.
The trucks are being unloaded and the consignments will reach the city's market within a day or two. This increased supply would bring down the rice price further, the traders opined.