Prices of all varieties of rice crept up owing to crop losses for flash floods, rainfall, disease attacks on standing paddy and depleting stocks.
The price of the coarse variety of rice went up 13 percent to Tk 42-45 a kilogram at retail levels in Dhaka yesterday, from Tk 37-40 a month ago.
Year-on-year, the price of coarse rice, which is an indicator of the rice market, rose 32 percent yesterday, according to data from Trading Corporation of Bangladesh (TCB).
The price of the medium and fine grains also edged up -- by Tk 2-4 a kilogram -- over the weekend, according to TCB and the Department of Agricultural Marketing.
“There is a shortage of rice at the mills while the stock of paddy is nil as well. The flood-induced damage of paddy in the haor region and recent rainfalls came as a blow for the market,” said KM Layek Ali, general secretary of Bangladesh Auto, Major and Husking Mills Association.
The price spike of the staple comes at a time when stocks at the public warehouses hit a six-year low and imports slumped due to a duty hike. At this time of year, stocks from the previous harvest typically begin to dwindle and fresh paddy harvests come in from the haor regions in the northeast, said traders and millers.
But floods in the back swamps have wiped out crops, causing a loss of 4.5 lakh tonnes of cereal, according to the government's primary estimates.
“There is no hope. It would be tough to recover the losses,” Ali said.
With farmers struggling to recover a part of their crops in the hoar areas, rainfall and floods affected standing boro in some districts in the northwest as well.
The attack of fungal diseases in some fields has worsened the situation, dampening prospects for boro paddy that accounts for about 55 percent of the total annual supply of the staple at 3.47 crore tonnes.
The Department of Agricultural Extension (DAE) earlier projected the production of 1.91 crore tonnes of rice in the current boro season, as part of its goal of bagging 3.51 crore tonnes in fiscal 2016-17. Millers said farmers in the northwest usually begin harvests at the end of April. But it is yet to start in full swing.
“There is an acute shortage of paddy in the local haats in the growing areas. Wherever there is a supply of fresh harvests, buyers are rushing to the spot. There also are reports of advance selling by some millers,” he said.
Abdur Rashid Dawan, proprietor of Matin Rice Agency, a commission agent at the rice wholesale depot of Babubazar in Dhaka, said millers could not supply the required quantity of rice because of inadequate supplies.
He placed orders for 30 tonnes of rice with a miller last week; the miller supplied half the order. “I will contact the mill again tomorrow (today).”
The supply of paddy remains low as many farmers could not harvest the already matured paddy because of bad weather, he said.
“Rainfall has also delayed ripening of the grain. But it appears that supply will rise in a week, if the current weather continues.”
Towfiqul Islam Khan, research fellow of the Centre for Policy Dialogue, said a diminished stock of rice and loss of boro crops are promoting speculation in the rice market.
The rising price of coarse rise is particularly affecting the extreme poor working in the non-farm informal sector, including the urban slum dwellers.
This group spends about 40 percent of their total income on rice, he added. “It is critical to enhance efforts towards country-wide open market sales and relief works in the flood affected haor areas.”
Khan said the rising prices may also affect boro season procurement, as the offered price may not appear lucrative. The government must keep a close eye on it and explore import options, he added.
The government aims to buy seven lakh tonnes of paddy and eight lakh tonnes of rice during the harvest of boro at Tk 24 and Tk 34, which is 4 percent and 6 percent higher than last year's.