Paddy prices very high in peak harvest season

Dhaka,  Fri,  22 September 2017
Published : 12 May 2017, 23:47:50

Paddy prices very high in peak harvest season

Natural calamity, high duty, low govt stock responsible
Yasir Wardad

Paddy prices have shot up to a very high level during the ongoing Boro rice harvesting season against the backdrop of loss of  the crop due to natural calamity and pest attack.

The rice traders, locally known as 'fariahs' are found to be desperate to buy paddy as much as possible from the farmers' fields, sensing shortage of the main staple.

Flash floods in haor areas (wetlands) and occurrence of deadly 'blast' disease in 34 districts are set to cause a substantial decline in production of the Boro rice this year. The shortfall could be about 1.0 million tonnes, said officials and experts.

The projected low production, high import duty and a low government stock have fuelled up rice prices that have hit limited-income people hard, said market observers.

They said propensity among a section of millers and importers to dominate the market is also pushing the prices of rice up.

Rice market observers said, the prices of rice has been on the up in recent months. The latest developments have only added fuel to the trend.

However, the government has taken initiative to import 0.6 million tonnes of rice to meet any possible shortage of it, according to the Directorate General of Food.

Coarse rice prices have hit an all-time high Tk 45 a kg this May, the peak harvesting season. The price is 32 per cent more than what was six months back, according to Trading Corporation of Bangladesh.

Boro crop harvesting has been going on in full swing across the country but rice prices remain high at retail level although prices of the grain usually fall during this time.

Newly harvested Brridhan-28 and 29 varieties of paddy are selling at Tk 800-Tk 825 per maund (40 kilograms) in Dinajpur, Rangpur, Bogra, Kushtia, Rajshahi, Mymensingh and Jessore regions for the last one week, local market sources said.

Jeerashail variety of paddy is selling at Tk 850-Tk 875 per maund in Bogra, Dinajpur, Rangpur and Rajshahi regions.

The price of paddy is also showing an all-time high trend considering harvesting seasons of last three decades, according to the Department of Agricultural Marketing (DAM).

However, the market price of paddy is still below the government purchase rate. The government has started procuring 0.9 million tonnes of paddy at Tk 960 a maund and 0.7 million tonnes of rice at Tk 1,360 a maund from domestic sources.

DAM Assistant Director ATM Rashed Khan told the FE that prices of paddy are much higher as big millers and their allied traders have been dominating the market to grab maximum gain fearing a production fall this year.

He said prices of some rice varieties might surge further when the millers would complete their own procurement drive.    

Department of Agriculture Extension (DAE) deputy director (monitoring) Dr Mohammad Abduhu told the FE that 50 per cent harvesting of Boro crop was completed until May 11.

He said it would be tough to get the targeted production of 19.1 million tonnes in the current Boro season as Boro crop of about 0.249 million hectares of land has totally been damaged in haor by flash floods. Nearly 0.7 million tonnes of Boro rice are produced in these areas.

Asked, he said 'blast' has been found in 2,500 hectares of land in 34 districts including big hubs like Rangpur, Bogra, Rajshahi, Naogaon, Joypurhat, Kushtia and Jessore.

He said production might fall by 3-4 per cent in the affected areas due to blast disease.

But farmers and millers contradict views of the DAE.

Md Nurul Alam, a farmer-cum-rickshaw puller at Shaltigopalpur union under Mithapukur in Rangpur district told the FE that 'blast' started hitting his field from the last week of March. He got only 9 maunds of paddy from his 2.5 bighas of land which was 42 maunds last year (1 bigha= 30 decimals).

He said 25-30 per cent of his fellow farmers had the same experience this year.

High prices of paddy failed to benefit them due to low production, he said.     

Md Belal Hossain, proprietor of Belkon Pvt Ltd, a Naogaon-based rice miller said the blast is going to cause more losses than the floods in haor areas.

He said the disease has affected 10-12 per cent crops in Naogaon and elsewhere in the country as per their field reports.

Bangladesh Auto Major Husking Mill Owners Association president Abdur Rashid said rice output might drop at least by 1.0 million tonnes.

Towfiqul Islam Khan, senior research fellow at think-tank Centre for Policy Dialogue (CPD) said the government should take into account domestic supply and demand situation and (if needed) review the 25 per cent custom duty on rice import.

"Any exaggeration on rice output should be avoided by state-run statistical agencies to help the government take proper policies to import rice to ensure food security of people," he said.  

He, however, appreciated the government's decision to import rice from the global market.

Farm economist Prof Gazi M Jalil said the government's record low stock (0.26 million tonnes until May 7) of rice has also been impacting the market.

He said following domestic production fall, import duty on coarse rice like Swarna should be reviewed immediately. This will help keep the market stable.

However, the private sector has imported only 0.09 million tonnes of rice in the current fiscal year so far. It was 0.259 million tonnes in the last year.     

Director General of Food Badrul Hasan said the Directorate will complete the tendering process as soon as possible to import 0.6 million tonnes of rice.

He said customs duty on rice might be reviewed soon to ease import through the private sector.   

However, he informed that 0.63 million tonnes of food grain are waiting to be released at the port.

The country has targeted to produce 34.98 million tonnes of rice when its demand is 31 to 32 million tonnes.

Bangladesh enjoyed a surplus rice output for the last few years which might not be possible this year amid severe crop losses, experts have predicted.
Editor : A.H.M Moazzem Hossain
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