Rice prices edged up as large millers are cashing in on crop losses, caused by the recent flash floods in the greater Sylhet region, amid depleting stocks from previous harvests and low imports, said traders.
In Dhaka, retail prices of coarse rice such as the swarna variety rose to a new level of Tk 40-42 a kilogram now, up 6.49 percent from Tk 37-40 a week ago.
Prices of the medium and fine categories of the staple also went up between 1.96 percent and 4.65 percent in the last one week, according to Trading Corporation of Bangladesh.
The prices rose in other parts of the country as well.
Millers and traders said rice prices typically go up near the end of a season for dwindling stocks.
“There is a shortage of paddy in the market. The small mills do not have paddy, and neither do the large mills. Those who had paddy might have milled the grain to empty their storages and make space for freshly harvested grains,” said Chitta Majumder, managing director of Majumder Group of Industries that operates an auto rice mill.
Every year, paddy markets usually get an initial supply from harvests from the haor or seasonal water bodies in the northeastern region. Farmers in the region usually begin to harvest their crops in the third week of April.
However, floods in the haor regions have not only affected standing crops and caused losses to growers but also dampened prospects of an early arrival of fresh paddy, said Nirod Boron Saha, a wholesaler in Naogaon, one of the main rice trading hubs in the northwest.
“We usually rely on supplies from the haor region until harvests in the north begins; it keeps prices stable in the initial days of the harvest season.”
The haor areas account for nearly 10 percent of the total boro cultivation area at about 48 lakh hectares this year.
The flood has affected 1.40 lakh hectares of paddy in the fields, according to estimates of the Department of Agricultural Extension (DAE).
Saha said speculation over delayed harvest for the bad weather is another reason for the recent price spiral as farmers, small and medium millers and wholesalers do not have paddy stocks.
“Only large mills have grains now,” he said.
Bappi Saha, a rice miller from the northeastern district of Netrokona, said, “This may be an artificial shortage.” The price hike is temporary, he added.
“The government, for the time being, can reduce the import duty on rice to encourage imports and increase the supply in the market,” he said.
Rice imports by private traders slumped 65 percent to 76,600 tonnes in July-March of the current fiscal year from the same time last year, after the government hiked the duty from 20 percent to 28 percent to ensure that growers get fair prices for their produce.
Boro, one of the three rice crop seasons in a year, accounts for nearly 55 percent of the country’s annual rice output of 3.47 crore tonnes.
DAE earlier targeted to ensure the production of 1.91 crore tonnes of rice during the current boro season to attain the total output goal of 3.51 crore tonnes for this fiscal year.
Rice production in the two crop seasons — aus and aman — rose 0.11 percent to nearly 1.58 crore tonnes year-on-year, according to Bangladesh Bureau of Statistics (BBS). Aus output declined but aman production rose, according to the BBS.
