Good harvest makes price situation worse
Rice growers have become hard hit by free fall of price at farm gate while millers ripping the benefit extracting exorbitant price from consumers at retailers level. Price has fallen to a nearly three-year low as farmers find them abandoned in the process.
A good Boro harvest and higher private and public stocks are making the situation further worse. Meanwhile the government plan to export rice while keeping the rice import channel open. This is likely to further boost traders at the cost of growers.
Traders will buy at low cost and export at high cost. On the other hand importers will sell stock at high cost in the wake of an artificial supply shortage in the market. Many believe pressure groups are at work to take the two-way advantage taking the farmers hostage.
Rice price in the market is not enough now to allow farmers to recover the cost of production. The average retail price of coarse rice was Tk 33 per kg in city markets last week down 24 percent from a year ago, according to the Department of Agricultural Marketing (DAM).
It is the lowest since August 2016 when the average retail price of the same quality grain was Tk 33.58 per kilogram, show data from the UN Food and Agriculture Organisation (FAO).The FAO data showed that the prices gradually declined after they soared to Tk 47.78 in September 2017. Just more than a year later in November 2018, the prices fell below the Tk 40 mark.
Since then, the prices gradually declined because of good crop harvest. Bangladesh bagged 3.62 crore tonnes of rice in fiscal 2017-18 and the total production is expected to hit a new high during the current fiscal year, according to official data.
In addition, fresh imports and carryover stocks have added to the overall domestic supply, said rice millers and traders.“We’ve a huge stock of rice,” said a leading importer who also owns several rice mills.He said prices of rice and paddy are interrelated and when the prices of paddy fall, rice prices follow suit.
As of May 15, coarse paddy price dipped to Tk 540 each maund from Tk 702 for the same quantity a year ago. “Farmers are in real trouble. They have to pay very high wages to hired workers to harvest paddy during this peak season, but they sell their produces at nearly half the production cost. It’s a terrible situation,” an official said.
He also said the demand for rice remains low because of good harvest of Boro, the biggest crop, almost throughout the country. He said there has been a delay in purchasing paddy from growers because of a delay in preparing a list of the farmers.
“We will buy only 12 lakh tonnes of rice and that will be added to our stock of nearly 13 lakh tonnes of cereal. We have a capacity of storing 21 lakh tonnes [of grains],” he said.“We have instructed all our field offices to start buying paddy and rice,” he said.