Food office to assess stock of rice, paddy to tame rising prices

With the soaring prices of rice affecting the poor, the food ministry has taken steps to assess the stock of food grain at millers and traders end.

Accordingly, the Directorate General of Food has asked its field offices to send reports on the stock of paddy, rice, wheat and flour at the end of millers and traders within five days, according to a notice issued on 24 August.

The initiative comes against the backdrop of two contradicting scenarios: rice prices are spiralling at a time when the agriculture ministry is saying production was good in the last Boro season and there would be no shortage of the food.

The Bangladesh Rice Research Institute (BRRI) estimates that farmers produced more than 2 crore tonnes of rice from Boro harvested in the April-June period and that there would be more than 55 lakh tonnes of rice in surplus at the end of November after meeting the domestic requirement.

BRRI found in its study that farmers held a higher stock of paddy.

"We want to understand the reasons behind the price spike," Food Secretary Mosammat Nazmanara Khanum told The Daily Star over the phone yesterday.

The prices began increasing nearly a week ago in Dhaka city, according to retail data compiled by the state-run Trading Corporation of Bangladesh (TCB).

For example, traders asked Tk 54-Tk 64 for each kilogram of fine grains sold as miniket or nazirshail, which is 5 per cent higher from a month earlier.

Coarse rice price increased 8 per cent to Tk 44-48 each kilogram yesterday from Tk 40-Tk 45 a month before, showed TCB data.

The prices of paddy and rice had been higher during the harvesting season because of millers' rush to buy the grain following government's declaration of purchasing 800,000 tonnes of paddy and slow release of paddy by farmers, Khanum said.

The government could attain one-fourth of its target of buying paddy during the procurement season, which is set to end next week.

The prices are going up at a time when the public warehouses had 10.7 lakh tonnes of food on 24 August, down 32 per cent from a year earlier.

Khanum went on to cite the agriculture ministry's estimate of adequate production and ample supply of the grain in the market and said there has been no shortage of rice.

"We have no shortage of rice based on the estimate and our observation. Even after that, the prices are increasing. There is a grey area. It may be that farmers, millers do not have stock as much as we are assuming. There might be a gap somewhere," she added.

In its notice issued to the district food office, the food ministry said Prime Minister Sheikh Hasina ordered the officials concerned to get reports on the stock of paddy, rice and wheat held by millers and traders to take a policy decision.

The food office is yet to find anyone holding a large stock of grain, Khanum said.

"We also want to see if large companies are packaging rice in larger quantity and reducing supply in the market. We are analysing where we need to intervene," she said, adding that the government would import after analysing the situation and to bring in discipline in the market.

Millers and traders earlier said crop losses for cyclone Amphan, recurrent floods and apprehensions over low yields of aman paddy for late plantation and food shortages for the coronavirus pandemic are fuelling rumours among growers, traders and millers that the supply of the food grain will become tight in the coming months.

And these factors are encouraging paddy to be stocked up and released slowly, said millers and traders.

Agriculture ministry recently estimated that flood damaged 32,000 hectares of Aus paddy crop and nearly 71,000 hectares of Aman paddy.

Farmers were harvesting paddy during the current Aus harvesting season. The decision on the amount of import will be taken based on the prospect of Aman, Khanum said.

As part of the preparation, the food ministry also asked its field office to furnish information on the requirement for rice for distribution among poor people under the social safety net and other public food distribution programme between September and November this year.

Khanum said they need nearly 900,000 tonnes of rice for distribution for three months.

She said the government might consider allowing the private sector to import rice if needed.

KM Layek Ali, general secretary of the Bangladesh Auto, Major and Husking Mills Association, welcomed the government move to assess the stock of foodgrains.

"We millers do not have that much stock. If there is a surplus, it is necessary to see who is holding that. The point is that the quality of grains deteriorated because of bad weather during the harvesting season except for the haor region."

This stock assessment is necessary to see whether there is any surplus or shortage, he added.

A section of traders increase the prices whenever the stock of food grain at public warehouses decline, said Ghulam Rahman, president of the Consumers Association of Bangladesh.

The government should be increasing public stock by reducing import duty and increasing supply in the market through open market sales and other social safety net schemes.

At the same time, it should ensure punishment to wrongdoers.

"The spike in prices is not expected at this time when many people have lost jobs and seen reduced income. Many self-employed have become jobless," he added.