Rice prices have remained high in Bangladesh despite ample supply of the grain as farmers harvest the second biggest Aman crop, giving low-income groups a hard time amid persisting economic uncertainty. 

Over the last one month, retail prices of rice edged up as much as 6 per cent in the markets in the capital.

Prices of medium-quality grain registered the highest increase followed by finer and coarse rice, putting a strain on the purchasing capacity of the low-income people, who are already counting extra for increased transport cost and soaring prices of various essentials, including edible oil.

Yesterday, retail prices of medium grain were Tk 52-58 per kilogramme, up from Tk 48-Tk 56 a month ago, data from state-run Trading Corporation of Bangladesh showed.

The finer variety was selling at 3 per cent higher at Tk 60-Tk 70 yesterday from a month ago. Coarse grain prices rose 3 per cent to Tk 45-50 over the last one month.

Millers and traders say purchases by rice millers, including large industrial houses such as ACI Ltd, City Group, Pran, and Akij Resources, which have entered the rice market in recent years, to build stocks to market the staple during lean season is one of the drivers for the higher prices of paddy.

Higher transport cost, fueled by the diesel price hike by the government in November, contributed to the higher price of the grain, which also faces a 62.5 per cent customs duty and taxes when imported.

Data from the Department of Agricultural Marketing (DAM) showed that the prices of coarse and medium grains of paddy, which are less expensive than the finer ones, rose in the past month.

For instance, the prices of coarse Aman, the second-biggest paddy making up 38 per cent of the annual rice production, rose to Tk 913-Tk 972 per maund on January 3 from Tk 919-Tk 950 a month ago. Such a spike during the harvesting season raised questions.

In Bangladesh, imports were up riding on the reduced import tariffs from December 2020 to October 2021.

Of the total imports of 13.59 lakh tonnes in the fiscal year of 2020-21 that ended in June, private importers brought in 7.86 lakh tonnes.

They procured 2.82 lakh tonnes from the international market so far in the current fiscal year, and the imported rice is already available in Dhaka's wholesale markets.

"There may be a rationale behind price increase during lean season. But any price spike is illogical during peak seasons," said Al Amin, a private job holder who lives in Dhaka's Uttara.

Nirod Boron Saha, a rice and paddy wholesaler in Naogaon, one of the main wholesale hubs for rice, said prices of rice remained strong even during the harvesting season because of the purchases made by the millers.

Officials of three rice mills agreed with Saha, adding millers and large wholesalers are busy procuring paddy to stockpile as they look to sell rice during lean season before the arrival of the next crop by the end of April.

Besides, some farmers are stocking paddy in the hopes of selling them at higher prices later, creating some crises in the market, market insiders say.

The Department of Agricultural Extension (DAE) estimates transplantation of Aman crop on 56.2 lakh hectares of land during the current fiscal year, up 4.3 per cent from the previous year.

"We expect a good crop this year," said an official of the DAE.

Abdur Rashid, president of the Bangladesh Auto Major and Husking Mill Owners Association, said increased income tax, production and transportation costs had affected millers and pushed up the production cost.

In the wake of rising rice prices, Food Minister Sadhan Chandra Majumder, at a meeting with millers and warehouse keepers on December 27, asked them to help keep the market stable.

He also alleged that mill owners and warehouse keepers were manipulating the prices of rice.