Although the government maintained the Boro paddy procurement price, retail rice prices have recently surged across the entire country.
According to the state-run Trading Corporation of Bangladesh, rice prices rose by about four per cent in a single week, while flour prices jumped nearly six per cent.
Coarse rice experienced a higher rate of increase compared to fine or medium varieties, disproportionately affecting the poor.
Wholesalers and retailers in Dhaka blamed mill owners for the sudden and unexpected surge.
However, a Naogaon mill owner told TIMES of Bangladesh that they had not increased prices as much as the market suggested.
TCB data shows coarse rice rising from Tk48 to Tk52, medium rice from Tk52 to Tk55, and flour from Tk40 to Tk45.
Traders claim mill owners raised prices following the new paddy harvest.
The government kept the Boro paddy procurement price at Tk32 per kg, identical to last year.
Meanwhile, overall fuel and electricity costs are steadily rising. Diesel prices increased by Tk15 to Tk115 per litre, which is only Tk1 higher than August 2022 levels. Additionally, electricity tariffs rose by an average of 17 per cent, effective this June.
Akhter Uddin, owner of M/s Haji Rice Bhandar in Karwan Bazar, told TIMES that premium Nazirshail rice sells for Tk86 to 88 per kg. Medium miniket rice costs Tk78 to 80 per kg, and coarse rice is Tk56 to 58.
He noted that the new harvest occurred in Baishakh less than a month ago. He firmly claimed that there is absolutely no logical reason for prices to rise during this full season, blaming manipulation by millers and hoarders.
In North Badda, consumer Mokammel Ahmed, who was shopping at local kitchen market, questioned why prices are so high without any market shortages. Typically, domestic rice demand is met for nine months until the Bengali month of Chaitra. Typically, a normal rice crisis only occurs in the final three months before the new crop.
Consequently, retailers find a price hike just one-month post-harvest highly unusual.
Local market vendor Farid Ahmed noted that rice prices have been climbing steadily since Eid, worsening significantly after the fifth of June. According to his information, he reported that miniket rice increased by Tk6 per kg around Eid, Nazirshail rose even more, and the price of fragrant Chinigura rice surged by Tk14.
Millers’ supply stopping strategy
Rice traders allege that mill owners in the Bogura, Naogaon and Rajshahi regions of North Bengal are controlling the national rice market. Currently, many mills have halted new orders.
One trader said that upon contacting a mill, he was informed that orders were temporarily suspended and would only resume the following Sunday or Monday at newly increased prices.
Furthermore, mill owner associations in various regions convene at their convenience to dictate market prices. Consequently, rice is sold across the country at nearly identical rates.
Traders note that while mill owners procure paddy in massive bulk quantities of up to 400 sacks at a time, retailers must deal with hundreds of individual buyers to sell that same stock. Ultimately, general consumers bear the heavy financial burden of the profits accumulated by both the millers and the traders, leaving them with little choice but to pay the inflated rates.
When justifying the surge in rice prices, traders and hoarders frequently cite rising transportation and fuel oil expenses. However, wholesale rice traders argue that this reasoning does not align with the actual price increments.
They explain that a standard truck transports approximately 300 sacks of rice, with each sack weighing 50 kg. Due to the mango season, truck fares have risen from Tk19,000 to Tk22,000, representing a maximum additional cost of Tk3,000 taka. This extra expense translates to merely Tk10 taka per sack, or just Tk0.2 per kg.
Wholesale traders calculate that if one maund, equivalent to 40 kg of paddy, costs Tk1,400, it yields roughly 26 to 27 kg of rice. This places the production cost at approximately Tk51 to Tk52 taka per kg.
Factoring in these production expenses, the maximum mill level price for miniket rice should be between Tk58 and Tk60. Even after incorporating transportation, ancillary costs and a reasonable retailer profit margin, the consumer price for miniket rice should not exceed Tk62 to Tk65 per kg. Despite these calculations, the current mill gate price for miniket rice is being set at Tk68 or higher.
Mill owner’s response
In response to the claims made by Dhaka traders, Farhad Hossain Chakdar, General Secretary of the Naogaon District Rice Mill Owners Group, told TIMES that the wholesale market price in their region has risen by a maximum of Tk2 per kg.
Denying allegations of deliberately reducing supply, he said that there is no shortage at the mill level or within the local supply network. He explained that rice is being supplied according to demand, although there is also some selling pressure in certain instances.
When questioned about the Tk2 price increase despite the government maintaining its procurement price, Chakdar explained that rice prices had previously dropped to their lowest point in five years. He noted that the current market is simply experiencing a normal upward correction from that historical low.
Edible oil prices rise
Signs of new volatility have emerged in the edible oil market, adding to the burden of consumers already grappling with the highest inflation in sixteen months. Grocers claim that supplying companies have been charging Tk5 more per litre over the past week leading up to the budget announcement.
“The company is supplying goods at an increased rate, so we are also having to sell at a higher price,” said Md Abdul Kader, a grocer at the North Badda Kitchen Market.
This increase in edible oil prices comes alongside rising costs for rice and flour observed on Friday, further straining households with limited incomes.
The Bangladesh Bureau of Statistics reported that inflation reached 16 months high in the month of the budget announcement, reflecting the cumulative impact of these essential commodity price hikes.
Beyond edible oil and grains, other food items continue to command high prices. Summer vegetables have been more expensive than in previous years, with few items available below Tk60 in the North Badda Kitchen Market, though pumpkin and raw papaya could be found for Tk50.
In the protein market, fish trader Sikder Mia sold Pangasius for Tk180 to Tk220 and tilapia for Tk200 to Tk230. Ruhi ranged from Tk260 to Tk350 per kg depending on size, while shrimp sold for Tk550 to Tk900 per kg based on type and size.
However, poultry prices showed some stability. Broiler chicken sold for Tk160 in the North Badda market, slightly lower than during Eid, while Sonali chicken remained unchanged at Tk340 to Tk360 per kg.
