The US Department of Agriculture (USDA) has revised upward its forecast regarding Bangladesh's rice production in the marketing year (MY) 2022-23 beginning from last May.

Production of the staple grain is forecasted to be 3.58 crore tonnes in MY23, up from the USDA's official estimate of 3.56 crore tonnes, the agency said in its Grain and Feed Update on Bangladesh released by the end of last week.

The USDA said it increased Bangladesh's rice harvested area and production forecast because of good Aman season rice harvest during the marketing year that begins with Boro and ends with Aman rice.

The USDA said it hiked MY 2022-23 Aman season rice harvested area and production forecasts to 58.5 lakh hectares and 1.41 million tonnes respectively, which is higher than its estimates for MY 2021-22.

The Bangladesh Bureau of Statistics has yet to release its estimate for rice production in the three-crop season -- Boro, Aus and Aman -- for 2022.

"Aman rice production exceed the target in many areas of the country," said the US agency, citing proper sunlight, irrigation and balanced fertiliser application for boosted yields.

"Moreover, there was no flooding during this season, which also helped to have good production. But despite the good yields, farmers incurred higher production costs due to fuel and fertiliser price hikes during planting," the USDA said in its report.

The agency estimates 1.97 crore tonnes of rice was produced during the last Boro season in MY23, which is 2 per cent higher than the 1.93 crore tonnes produced previously.

However, cultivation of Aus season rice, which took place in March and April 2022 and was harvested in July and August, dropped 24 per cent from the previous year as severe floods affected the north and north-eastern parts of the country during planting.

Yet, overall production was equal to the 3.58 crore tonnes estimated by the USDA for MY22 thanks to higher yields of Boro and Aman.

And despite no change in overall production, prices of all types of rice prices remained high through the third and fourth quarters of 2022.

"Usually, rice prices decline at harvest; however, higher production costs, high milling and transportation costs, appreciation of the US dollar, and high inflation were the major factors contributing to the high rice prices this year," the USDA report said.

In December 2022, the average retail price of coarse rice reached Tk 50.55 per kilogramme, which was approximately 7 per cent higher than what it was during the same period the year before.

This season, farmers harvested Aman rice in November and December 2022. The average retail price of high-quality nonaromatic (fine) rice hit Tk 75 per kilogramme last December, up by approximately 3 per cent compared to the same period the year prior, it added.

While prices of wheat flour hit a record high in January 2023, the average retail price of unpacked coarse wheat flour, also called aata, hit a record of Tk 61.6 per kilogram, up approximately 70 per cent year-on-year, the USDA said.

At the same time, the average retail price of fine quality unpacked wheat flour, called maida in Bangladesh, reached Tk 72 per kilogramme, which was also a record high.

The USDA report said since the Russian invasion of Ukraine began in February 2022, all types of wheat flour prices have been rising due to supply chain disruptions and higher international prices.

India's wheat export ban on May 13, 2022, and the appreciation of the US dollar against Bangladesh's taka aggravated the situation further as most wheat is imported.

"Due to the high price of all types of wheat flour, demand has fallen significantly at the consumer level," the USDA said, citing industry contacts that high wheat flour prices would likely continue until the wheat harvest begins in Bangladesh in April 2023 and India allows exports again.