Pandemic bites aromatic rice processors

Haji Nanna Biriyani, a popular restaurant in Old Dhaka that serves up a mouthwatering selection of sub-continental and rice-oriented dishes, has reopened its doors to customers nearly a month ago.

The turnout of customers is fair given the coronavirus jitters that keep haunting people, but the daily sales at the food joint still remain half the pre-pandemic time.

Three hundred kilometres northwest, in Chapainawabganj, the state of affairs for aromatic rice milling firm Erfan Group is more depressing.

The demand for aromatic rice, popularly known as chinigura, nosedived nearly 70 per cent to about 50 tonnes per day at this mill from 150-200 tonnes in the pre-pandemic days when life was normal, social festivals and gatherings were everyday affairs and the habit of eating out among urbanities was building up quite steadily.

"Hotels and restaurants are one of the main buyers of aromatic rice. Though lockdown has been lifted, most people still choose to stay put as the ruthless killer lurks in the open," said Md Erfan Ali, chairman and managing director of Erfan Group.

The spread of the novel coronavirus has put a curb on ceremonies as people have been forced to maintain social distancing and avoid gatherings.

Subsequently, wedding parties, birthday celebrations, and other social, cultural and public events have been scarce, affecting the community and party centres, restaurants and other businesses like these.

As a result, the prices of aromatic rice dropped, Ali said.

The prices of locally produced chinigura rice declined to Tk 86-87 each kilogram now at wholesale from Tk 92 before the pandemic took over the country -- a situation that can only be termed as a sharp contrast to the usual trend in the rice market.

The regularly consumed rice though is becoming dearer amid fears of crop losses for repeated floods, reduced yields and slow release of paddy by large farmers and stockists.

Bangladesh annually produces 18 lakh tonnes of aromatic rice and the majority of the grain is produced from the paddy planted in the rainy season, according to Md Shahjahan Kabir, director general of Bangladesh Rice Research Institute (BRRI).

Apart from domestic production, traders import long-grain rice such as basmati to cater to the demand from the middle class and upscale consumers.

"We, the aromatic rice millers, are one of the first victims of the pandemic. There is barely any demand for scented rice," said Sanat Saha, who operates a rice mill in Sherpur, an aromatic rice-producing district in the north.

Millers, who process scented paddy, have been incurring losses as they have to sell each maund of milled rice at Tk 2,400.

The processing costs, including the prices of paddy, stand at Tk 2,800 per maund, Saha said.

"Lockdown is over but there are no large gatherings. None would invite 500 people during this time to celebrate anything," he added.

Anup Kumar Saha, deputy executive director of ACI Consumer Brands, a unit of ACI, said they processed 3,500 tonnes of aromatic rice but faced difficulties to clear the stock as demand fell.

ACI, which operates rice mills, incurred losses as prices declined at the wholesale level because of a fall in demand. It has 1,600 tonnes of aromatic rice in stock now.

"The purchasing power of people has dwindled due to the economic crisis brought about by the pandemic. Preparing food like polao or biriyani is not an expense for rice only. People also need to buy other items such as meat to enjoy the food."

Despite the decline in prices at the wholesale level, processors did not reduce the prices of their retail packs to that extent.

Instead, marketers are trying to sell their items through promotions or increasing trade commissions to distributors and retailers, according to Anup.

Marketers are giving extra benefits to retailers to stay ahead of others in the competition, said MA Mahmud, senior brand manager of Square Food & Beverage.

Some 50 companies sell aromatic rice to profit from the market of nearly Tk 800 crore in the branded segment.

Retail prices of consumer packs could not be reduced as procurement prices were higher, he said.

"We can't suffer losses," he said, expecting that the demand would rebound slowly.

Saha, however, was not upbeat about recovery as he thinks there is no hope of business until a vaccine is developed and brought into the country.

He rather believes that farmers would reduce cultivation of aromatic rice this planting season frustrated by low prices of this type of grain.

The market would see increased supply and prices might decline further when a new crop will arrive in December, Ali said.