Top 50 millers account for 20 per cent of all rice milled by a total of 949 auto-rice millers in the country, according to a research.
"This indicates the concentration of the market power among the small number of millers of different areas," said the study conducted by the Bangladesh Institute of Development Studies (BIDS).
Some 12.5 per cent of the country's millers have the storage capacity that is beyond the legal limit, posing a threat to market and price manipulation, according to the study on "Rice Market of Bangladesh: Role of Different Players and Assessing Competition".
"Some 12.5 per cent of the millers have maximum storage capacity, which is larger than the amount of paddy that they are legally allowed to store," the study said.
The top-50 mills also have an average milling capacity of 1,574 tonnes fortnightly. This is an average scenario of the concentration of rice milling for the whole country.
Agriculture minister Abdur Razzaque has recently said the production of rice has increased to about 38.70 million tonnes during financial year 2020-21.
In the financial year 2016-17, a total of 33.8 million tonnes of rice were produced in the country. More than 50 per cent of this production is high-yielding variety, known as Boro rice, the report said.
Farmers are mostly excluded from the value-adding activities beyond the farm gate in the rice supply chain.
Most of the smaller farmers remain dependent on the local actors (pharias/beparies) as price takers in the local market, the state-run think-tank said.
But large farmers are capable of keeping stock at home and selling their harvest almost round the year.
The major supply of rice comes in the harvesting seasons of Boro and Aman as these two varieties constitute around 91 per cent of the rice production.
Though rice is cultivated in almost all districts of Bangladesh, a major share of production is concentrated on a few districts.
For Boro and Aman varieties, Mymensingh, Noagaon, Dinajpur and Bogra are among the top four districts. Aus is mainly produced in Comilla, Noagaon, Sylhet and Bhola districts, the study said.
While talking to the FE, Sarwar Mahmud, director general of the Directorate of Food, said a section of vested interest millers and some seasonal traders take refuge of various strategies to store the paddy and rice more than they are allowed as per the government regulation.
However, drives are underway to find out their evil motives and punish them as per the country's law, he insisted.
Mr Mahmud also underlined the need for intervention and prevention policy to curb the manipulation of millers and seasonal traders.
Citing the study, Nazneen Ahmed, senior research fellow of the BIDS, told the FE millers are found to be well-connected with the association of similar traders.
That association appears to be well-structured, but it is hard to find any evidence of collusion, she said.
They exchange market information, help each other in the crisis, and work as an informal insurance mechanism.
The study suggested implementing the hoarding act properly.
Millers need to report their stock information to the registration authority every month. But they are reluctant to do that regularly. Even if they do so, monitoring is very limited to observe whether they are reporting properly, the study said.
The current procurement practice of Public Food Distribution System (PFDS) under the ministry of food for setting rice price is largely arbitrary, it added.
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