Public food stocks near 3-year low
Public foodgrain stocks fell to 6.56 lakh tonnes, the lowest in nearly three years, raising apprehensions that greedy traders would use the current situation to manipulate prices to pocket higher profits.
Of the stocks, 5.43 lakh tonnes are rice, which is less than half of what the Directorate General of Food had a year ago, according to the food ministry data.
The current reserve is way less than the optimum 10 lakh tonnes public storages should maintain.
"This means that the government's free and subsidised food distribution programmes will be affected. This will affect the food security of many poor people," said Quazi Shahabuddin, a former director-general of the Bangladesh Institute of Development Studies (BIDS).
A lower stock of foodgrains also gives a signal to the market that the government does not have enough foods to supply to rein in prices.
"Ultimately, the unscrupulous traders get a scope to manipulate the market," he said.
The food office had 13.47 lakh tonnes of grains in its stocks at the end of August, the highest this fiscal year.
The reserve fell consistently as the distribution under social safety net and other state programmes continued against insignificant progress in domestic procurement as farmers and millers were unwilling to sell their grains to the food office at the government-fixed rates as prices were soaring.
The procurements began in early November last year.
Since then, the directorate has managed to attain only 5 per cent of its 2 lakh tonnes of paddy procurement target and 10 per cent of 6.50 lakh tonnes of rice procurement goal from Aman harvests, the second biggest output after Boro.
The prices rose, driven by speculations of a reduced Aman yield for repeated flood-induced damages during the planting period and low imports for the presence of high tariffs.
Yesterday, the price of coarse rice, consumed by low-income people, was 37 per cent year-on-year higher at Tk 44-48 per kilogram in Dhaka, shows the Trading Corporation of Bangladesh's market data.
Overall, prices rose to a three-year high in January, said a Food and Agriculture Organisation report on Bangladesh last week.
In a recently released review report on the Bangladesh economy for the current fiscal 2020-21, the Centre for Policy Dialogue said rice production, particularly Aus and Aman, was adversely affected for the consecutive floods, which swept through about one-third of the districts.
Approximately 25.7 lakh hectares of paddy fields were inundated, affecting about 12.7 lakh farmers, it said.
The think-tank said Aman harvests fell 10 lakh tonnes short of the target. The low output affected domestic stocks.
Md Moniruzzaman, the directorate's additional director, said public food reserves would increase as rice bought by the government had started to arrive from abroad.
"Ships are coming every day," he said, adding that already 1 lakh tonnes of rice bought under a food office-initiated deal had arrived.
The directorate has already signed an agreement to buy 6 lakh tonnes of rice. "We will continue making imports until the market attains stability," he said.
The official said stocks were being replenished with new arrivals, but the level remained low as distribution under various programmes were ongoing simultaneously.
Shahabuddin said the decision to go for imports and reduce tariffs came too late.
"The government had failed to anticipate the situation and act accordingly. It seems that the government did not learn lessons from the past," he said, citing the price spirals following floods in haor areas in 2017.
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