As the prices of most varieties of rice started increasing this week, the government has taken measures to avoid volatility in the domestic market by taking an initiative in advance, officials concerned said.
As per the move, the ministry of commerce (MoC) will now issue a directive to the Trading Corporation of Bangladesh (TCB) asking it to act on managing the domestic market of rice on the basis of its production and export-import trend and the trend in the rice exporting countries, they said.
The government will take decisions based on the forecast on local and global production of the staple food, they added.
The decision came at the monthly coordination meeting held at the ministry of commerce (MoC) recently with its Senior Secretary Hedayetullah Al-Mamun in the chair.
The government is taking an ambitious initiative aiming to tackle the price hike of the staple food and overcome its shortage in future, a competent source said.
"Rice is the staple food of Bangladesh. Any shortage or sporadic increase in rice prices may create panic. So, the government has decided to take an initiative to rein in its unusual price hike and shortage at any cost in future," a high official of the MoC said.
The move has been taken to mainly resolve the artificial crisis and rein in price hike of the essential commodity in the domestic market in the coming days, Hedayetullah Al-Mamun told the FE on Saturday.
"We want to keep the price of the item within the common people's purchasing capacity and ensure its sufficient stock and supply. That's why now we have to look at the market situation across the globe. Then we will take necessary steps to check any volatility of the rice market," he said. Shortage of rice in the country could lead to "big problems" for the country's people if the production of the staple item in the country had failed due to natural calamities. This is why the government has taken the move as a precaution, he said.
Market prices and supply of the essentials are now in a good position, the senior secretary added.
Industry insiders said they hope that the measures taken by the government will keep the rice market stable with adequate supply of the essential item throughout the current year and next years.
After a slight decline last month, the prices of most varieties of rice started increasing from this week which millers attributed to the price hike of paddy and uncontrolled import.
The experts have got astonished at the increasing trend of the staple food as it is peak Aman harvest season, the second biggest rice sourcing period after Boro and the country has also imported a large quantity of rice recently.
The prices of most varieties of rice which declined by Tk 2-4 per kg during mid-December period last year started increasing over the last two days.
The price of Swarna, now the highest grown rice variety in Aman season, increased to Tk 35-36 per kg while Miniket rice sold at Tk 48-52 per kg, Paijam at Tk 38-40 (new) and Tk 44-46 (old) per kg, Najirshail at Tk 56-57, Brri dhan-28 at Tk 42-44 per kg on Saturday, up by Tk 2-3 in last five days in the city's kitchen markets.
The prices also increased at the mill gates in Dinajpur, Rangpur, Kushtia, Joypurhat, Naogaon and Pabna, traders said.
Shahidur Rahman Patwary Mohan, an executive member of Bangladesh Auto Major and Husking Mills Owners Association (BAMHMOA) told the FE that paddy price remains high during this Aman season. Swarna paddy sold at Tk 750-760 per maund (40 kg) which was Tk 680-700 per maund a few days back.
He said Paijam variety of paddy sold at Tk 830-850 per maund on Friday which was Tk 780-800 seven days back.
He said the prices of Swarna, Miniket and Paijam rice have increased by Tk 0.5-1.0 per kg in last ten days at mill gates.
He said the rice market has been influenced by uncontrolled import.
Importers and their allied traders are manipulating the market, Mohan said.
Mohan said nearly 50 per cent of the millers have shut their operation due to incurring huge losses as imported produce is dominating the rice market even in rice hubs like Dinajpur, Rangpur and Naogaon.
He said the Swarna variety's import cost was Saturday $345-350 against $315-320 few days back. Mohan informed that nearly 5000 tonnes of rice are being imported per day now from India.
Secretary of BAMHMOA, KM Layek Ali, said duty-free import also contributed to making local rice market volatile.
"We are paying more than 16 per cent of interest to the banks when the importers are paying no duty," he said.
He said if such a trend continues, the rice industry will suffer within few years.
According to the Directorate General of Food, the country's private imports brought in nearly 0.405 million tonnes of rice in July-December period of 2014.
The country had the highest production of 34.065 million tonnes in the financial year 2013-14.
The country's demand for rice is 31 million tonnes, DGoF data showed.
Dr Khondaker Golam Moazzem, additional research director of the Centre for Policy Dialogue (CPD), told the FE that they should first look into the matter in the food security context.
"The government has to look into the actual supply and demand. If there is shortage in availability, then importing is viable," he said.
The government also can permit import to stabilise the rice market if it is being manipulated by local traders.
"But the government should look into the matter that the import might not cause shutdown of local mills," he said.
He said the country is now exporting daily edible rice (non-aromatic).
"It is necessary to know what kind of rice the country is exporting if it has similarity with the rice which is being imported. Product differentiation here is important," he said.
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