Traders, despite bumper yield of paddy, have increased prices of rice on the pretext of the reinstatement of 28 per cent import duty on the staple.
Market experts suspect a syndicate behind the recent hike of rice prices in the wake of the resumption of the import duty early this month to protect the local growers.
They say that despite having a huge supply of rice in market, the price hike indicates market manipulation.
The prices of rice have been on a rising trend in Bangladesh capital’s wholesale markets since the announcement in the budget for the financial year of 2018-19 on June 7 that the government reinstated 28 per cent import duty on the staple.
The high price of rice hit the retail market following Eid-ul-Fitr and the prices of all varieties of rice increased by Tk 1-3 a kilogram.
Experts blame a syndicate and lack of government monitoring, saying that imposition of import duty is appropriate but the government should monitor the market of the vital commodity.
‘There is no reason to increase the price of rice as more than 40 lakh tonnes of Boro rice have already entered market,’ agricultural economist Abdul Bayes told New Age on Sunday.
The country’s rice market is fully controlled by a syndicate and the quarter is increasing price of the staple to make excessive profits using duty imposition as an excuse, he says.
‘I appreciate reinstatement of import duty on rice but it was not timely. The government should have reinstate the import duty just after the harvesting season of Boro,’ Abdul Bayes, also director of BRAC Research and Evaluation Division, said.
Of both the growers and consumers, no one gets the benefit of import duty as it has been imposed at a time when small and medium farmers have already sold their stocks of rice at low prices while the consumers are forced to pay higher prices, he explains.
He suggests that the government form a price commission to ensure a win-win situation for both growers and consumers.
Ghulam Rahman, president of Consumers Association of Bangladesh, says that despite having a huge supply of rice, a quarter is trying to manipulate the market.
There is no acceptable reason to increase the price of rice as the country witnessed bumper production of rice in last two seasons, he says.
‘I think if the government takes necessary measures, the attempt to manipulate market by a quarter will not be successful,’ Ghulam Rahman said.
Traders, however, have alleged that immediately after the reinstatement of 28 per cent import duty on rice, importers and mill owners have squeezed the supply of rice and increased the price.
A kilogram of coarse variety of rice was selling at Tk 43-45 a kg on Sunday in the city markets.
The fine variety of Najirshail rice was retailing at Tk 65-70 a kg and its standard variety at Tk 60-65 a kg.
BR-28 rice was retailing at Tk 50-54 a kg while Miniket was selling at Tk 62-68 a kg.
Syed Monirul Islam, proprietor of Barisal Rice Agency at Mohammadpur Krishi Bazar, said that rice importers and mill owners increased the prices of all varieties of rice and they also squeezed the supply as the government re-imposed import duty on the item.
Kawser Alam Khan, vice-president of Bangladesh Rice Merchants Association, said every year the prices of rice increased a little bit after Eid in the absence of production at the rice mills during to Eid vacation.
He said that it would not be logical to increase the rice prices on the pretext of import duty but all traders would not run their business abiding by ethics and few traders or importers could take the advantage.
‘We have sufficient domestic production of rice and we need not to impost the item at this moment,’ Kawser added.
KM Layek Ali, general secretary of Bangladesh Auto Major and Husking Mill Owners Association, alleged that the government imposed import duty aiming to increase the prices of rice.