Rice price falls little, fails to soothe people

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Economists say the ongoing crisis of rice resulted from the government’s failure to ensure timely import though a threat had been looming since huge production losses in recurring floods and cyclone last year.

They believe at least 18 lakh tonnes of rice needed to be imported in the first seven months of the current fiscal year to make good the shortfall against the domestic demand.

Meanwhile, the price of rice in the city’s retail markets started to fall yesterday. It marked a decrease of Tk 1-2 per kilogram.

Earlier on Friday, rice prices came down by up to Tk 50 a maund in the wholesale markets. But it did not reflect in the prices at the retailers’. The price of the staple was shooting up every day over the week preceding Thursday.

Talking to The Daily Star yesterday about what led to the exorbitant rice prices, former finance adviser Akbar Ali Khan and Research Director of Bangladesh Institute of Development Studies (BIDS) Zaid Bakht observed that the government should have responded immediately to the threatened food deficit.

Asked about the observations, Food Secretary Aiyub Mian said the government has not been sitting idle. It has imported 3 lakh tonnes of food grains in the first seven months and another 1.20 lakh tonnes were in the pipeline.

He said tenders were invited for import of 25 lakh tonnes of food grains, but there was no response from the traders.

“Even those who got the work orders to import 5.5 lakh tonnes did not enter into any final agreement with the government,” he added.

About the Indian proposal for the government to import five lakh tonnes of rice from there, Aiyub Mian said, “We didn’t make any delay. We are examining some conditions set by the Indian government.”

A team will visit India on January 9-10 to finalise the deal. The Indian government communicated the agenda of the meeting only Thursday.

He claimed they wasted no time since India declared it would allow Bangladesh to import 5 lakh tonnes of rice to tackle the food shortage in the aftermath of Cyclone Sidr. India however has yet to fix the rate of the rice to be imported.

India earlier slapped a ban on rice export to ensure its own food security.

Talking to The Daily Star, the economists said the government must act urgently to increase rice supply in the market through import.

They also suggested that the government provide free food to 1.5 crore people below the poverty line until the next Boro harvest.

About the suggestion, the food secretary said, “The government has resources and they will be utilised properly.”

It has a food stock enough to run programmes like food for work and VGF till March, he said.

Akbar Ali Khan said as per the food budget, the government had targeted to procure 23 lakh tonnes of food grains in the current fiscal. “Of the target, 10 lakh tonnes were supposed to be imported while the rest procured locally,” he said.

But under the present circumstances, the government would not be able to meet the target.

“It had already failed to meet the target set for the last Boro season,” he said adding that it might end up procuring a maximum of 7 lakh tonnes of rice in the current fiscal.

Besides, 8-10 lakh tonnes of rice needed to be imported additionally to recover the production losses in floods and cyclone, Akbar Ali Khan said.

“That means the government needs to import at least 25 lakh tonnes of food grains in the current fiscal and 75 percent of that should have been imported in the first seven months,” he noted.

He said according to the current fiscal budget, the government has a plan to provide 50 lakh poor people with food for free, but in light of the present crisis the number should be revised to 1.5 lakh.

For quick import of rice, he suggested government to government level deals.

BIDS research director Zaid Bakht said the government made a delayed response to the possibility of crisis that had hanged over since floods and cyclone. “The steps they are now taking should have been taken before,” he said.

Criticising the government’s plan, he said, “It should consider the worst case scenario, and not formulate plans on optimistic views only.”

It seems like the government did not consider the adverse effects of floods and cyclone on rice production, he said.

Zaid said, “Since it’s a non-political government it did not get the response from the grassroots level properly.”

He thinks there must not be anymore delay in the proposed import of five lakh tonnes of rice from India.

PRICE SITUATION
The price of rice in both the wholesale and retail markets started to fall yesterday. The price of one maund of coarse rice in the wholesale markets dropped by Tk 30-60 while it was Tk 10-30 in case of fine rice.

Prices of different varieties of rice in the kitchen markets came down by Tk 1-2 per kg.

Traders said the demand for coarse rice in the regular markets is low now as the BDR-run fair price outlets have increased their supply.

Our staff correspondent from Khulna adds: Joint forces started operation at the rice stores Friday evening to keep prices under control and track down hoarders as allegations surfaced that unscrupulous wholesalers and rice-mill owners created the price rise through hoarding.

But the overheated rice market showed no sign of cooling down in Khulna even after the law enforcers began massive operation to arrest price hike. People in the city reacted sharply to the skyrocketing of prices of rice and edible oil.

The law enforcement agencies swooped on the warehouse of Islam Enterprise at Daulatpur Friday night, discovering huge of stocks of rice there. Its owner, Md Aslam, slipped away in anticipation of the raid, with most other storehouse owners, who stockpiled rice in the recent crisis, following suit.

Retailers in Khulna complained that importers, warehouse owners and rice-mill operators also hoarded rice and paddy worth several crores of taka in northern districts.

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