Food prices continue to soar in international market

FE Team | Published: September 12, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
Prices of essentials are maintaining a rising trend in the local market mainly because of the over-heated international commodity market, official sources said.
The prices of rice jumped by 64 per cent while wheat by 88 per cent in the period between August 2006 and August 2007 in the global market.
The price of a tonne of rice rose to $325 in August this year from US$ 198 in August 2006 in the international market, according to the central bank statistics.
A tonne of wheat was sold at $332 in August this year compared with $177 in August 2006 in the global market.
"Opening of fresh letters of credit (LCs) against imports of rice and wheat have significantly increased in August last, but there is little possibility of declining of prices in the local market because their upward trend in the global market," a senior official of the Bangladesh Bank (BB) told the FE Tuesday.
He also said the price of a tonne of wheat rose to $348 now in the international market from $260 that existed only three months back.
Meanwhile, the opening of LCs against imports, ahead of holy month of Ramadan, increased by 25.71 per cent during the first two months of the current fiscal over that of the corresponding period of the previous fiscal.
"If the importers had opened LCs three months back they would have avoided the recent prices hike in the global market, particularly for food grains," a senior official of a nationalised commercial bank told the FE.
He said the country is now facing inflationary pressures due to price hike of commodities in the global market.
Import LCs worth US$ 3.492 billion were opened during the July-August period of the fiscal 2007-08 as against $2.446 billion of the same period of the last fiscal.
During the period, the opening of import LCs of some essential items including rice, wheat, sugar, milk food, edible oils, pulses and onion also rose to meet the growing demand of the essentials in the local markets.
Bankers, however, said both opening and settlement of LCs against food grains have increased and the existing trend will continue for some time.
On March 12 last, the central bank directed the commercial banks to promote businesses, particularly small and medium ones, for opening fresh LCs against imports to ensure adequate supply of essentials in the markets.
The BB also asked the banks to be flexible while opening fresh LCs for import of essential commodities.
In August last, the opening of LCs for rice increased by $108.60 million in term of value, for wheat by $46.37 million, sugar by 5.14 million, milk food by $2.12 million, edible oils by 46.15 million, and onion by 1.99 million over those of the corresponding period of the previous year.