Paddy prices are refusing to pick up, much to the anxiety of farmers who are set to kick off aman paddy harvesting next month.
In September, the prices of coarse and medium grains fell further from August as the market saw ample supply of the staple resulting from back-to-back good yields, including the principal rice crop boro harvested in the April-May period.
Last month, consumers could buy one kilogramme of coarse rice at Tk 32 in Dhaka, down from Tk 32.75 in August, according to data from the Food and Agriculture Organization, a specialised agency of the United Nations that leads international efforts to defeat hunger.
Data from the UN agency also showed that residents in the city could buy medium-quality grain at lesser prices in September than they could in August.
And since the beginning of October, the prices of coarse grain declined in kitchen markets of Dhaka city, according to data from the Trading Corporation of Bangladesh.
“There is no chance for the prices to go up as harvesting of new crop is just in front of us,” said Abul Kalam, a farmer in the northwest district of Rangpur.
Instead, the prices may decline for the arrival of the new crop.
“It seems nothing but losses are left for us,” said the 65-year-old grower, who planted fine variety of paddy so that he can get better prices by selling the surplus in the market.
Rice is the staple crop in Bangladesh and is grown on 70 percent of the total cropped area of 1.54 crore hectares.
As many as 77 percent of the marginal and small famers depend on rice for food security and their livelihoods, according to the Bangladesh Integrated Household Survey 2015.
Prices of the cereal started to decline in the middle of aman harvest in 2018 and the downturn continued even though imports dropped after the government hiked import tariffs, according to data from the food ministry.
On September 10, the stock of rice in public silos was 13.46 lakh tonnes.
The distribution of rice by the government social safety schemes also put a damper on the rice market, Kalam said.
“Traders are not interested to buy,” he told The Daily Star over telephone yesterday.
One maund of coarse variety paddy was Tk 550-Tk 570 in his locality, according to Kalam. The price was much below the government’s previous estimate of production cost.
There is almost no demand in the market because of distribution of rice by the government, said Chitta Majumder, managing director of Majumder Group of Industries, which owns several rice mills.
“We had expected that the market would be vibrant after Eid-ul-Azha in August and bought the fine-variety paddy. But, the prices fell below the rates we had paid.”
He said his firm and some millers tried to export rice but they could not as the prices they quoted were higher than what Indian exporters were offering.
“The current trend does not give confidence that the prices will remain unchanged. Rather, the prices will drop after the arrival of new aman crop,” he said, adding that the prices of coarse paddy might decline to as low as Tk 500 per maund.
Bestowed by monsoon rain, aman crop accounts for 38 percent of the annual rice output.
In the current season farmers planted paddy on 58.94 lakh hectares, which is much higher than the previous season.
Aman harvests look set to be bountiful, said Md Tareq Anam, national sales manager of Rashid Agro Food Products, one of the main rice millers.
“We expect a bumper crop if there is no natural disaster or bad weather,” said KM Layek Ali, general secretary of the Bangladesh Auto Major and Husking Mills Association.
If so, there will be 8-10 lakh tonnes of surplus, he said, while demanding cash incentive from the government to export rice.
“The government should buy more paddy from growers in the coming aman paddy harvesting season to prevent prices from falling,” said Nirod Boron Saha, president of the Naogaon Dhan O Chal Arathdar Babshayee Samity, an association of rice wholesalers and commission agents in the northwest district.
The rice milling charge should also be increased, he added.
Contacted, Mosammat Nazmanara Khanum, director general of the Directorate General of Food (DG Food), said her office has placed a proposal to buy aman grains equivalent to 7 lakh tonnes of rice this year with the Food Planning and Monitoring Committee (FPMC), a cabinet-level committee headed by the food minister.
The purchase plan is one lakh tonnes less than last year’s procurement during the aman season. The reason being the rice stock in public silos is high.
“Since we did not face any natural calamity during boro, we have procured full amount of our boro target this year. As a result, we have good stock now,” Khanum said.
Besides, the DG Food does not have any dedicated silo for paddy right now and paddy is more susceptible to insect infestation than rice.
The FPMC will decide on the amount of paddy and rice to be purchased in the coming aman harvesting season and at what prices at its meeting by the end of October, she said.