Home Bangladesh Millers-retailers allegedly behind rice price hike
Bangladesh - January 24, 2024

Millers-retailers allegedly behind rice price hike

Market shares
Meghna Group 120,000 tons
City Group 78,000 tons
ACI 40,000 tons
Square 30,000 tons
Pran 28,000 tons
Akij 18,000 tons

Zarif Mahmud : A class of businessmen is talking about pulling the reins of big industrial groups to keep the rice market normal. Big groups are being blamed for exorbitant price hikes. The food minister also agreed and convened a meeting to verify the truth. However, analyzing the production capacity, it can be seen that the share of large industrial groups in the rice sold in the country’s market is less than one percent. Corporate organizations claim that it is not possible to control the market with this nominal share.
It is known that the production of rice in the country is about 4 million tons. About 62 percent of this rice is sold in the market, the rest is consumed by the producer himself. This is what Bangladesh Rice Research Institute (BRRI) research says. That is, about two and a half million tons of rice are sold in the market annually.
But the data of the annual production of mills of large industrial groups shows that the maximum rice production capacity (milling capacity) of the country’s six major rice marketing companies is only 3 lakh 14 thousand tons. Where the actual production is less than two lakhs per annum. If we exclude fragrant and other types of rice, the amount of ordinary rice alone is close to one and a half lakh. The share of industrial groups is very nominal compared to the overall market.
According to the data, Meghna Group has the largest share in the rice market in the country. The annual rice production capacity of this company is approximately one lakh 20 thousand tons. Out of this, 80 percent of the rice is boiled rice and the rest is processed by the company. The capacity of City Group, which is in the second position, is about 78 thousand tons per year. Of which 90 percent are parboiled and hybrid and the remaining 10 percent are aromatic rice. In the next position, ACI has the capacity to produce 40 thousand tons, Square 30 thousand tons, Pran 28 thousand tons and Akij 18 thousand tons. Of this, about 60 percent is rice and the rest is aromatic.
Despite having such a small share in the market, large industrial groups are sometimes blamed for increasing the price of rice. Rice traders are complaining to Food Minister Sadhan Chandra Majumder about the sudden rise in rice prices especially after the elections. Last Wednesday, a meeting was held at the Food Directorate, along with big rice millers, medium and small rice millers and retail and wholesale traders. Then they complained that big companies increased the market by buying paddy and rice at high prices. They also made a similar complaint to the Minister of State for Commerce in a meeting of traders at the Mohammadpur Agricultural Market.
In view of this, the food minister held a meeting with six big corporate organizations in his office at the Bangladesh Secretariat on Monday (January 22). At this time, the big companies highlighted their position in the market. Firms also report their capacity and sales figures.
The representatives of the corporate institutions claimed that it is never possible to control the market with such a small share. Rice traders and small mill owners are making such complaints to destroy the brand value of big companies.
In this regard, Citigroup Chief Financial Officer (CFO) Amin Siddiqui told, “We have so little capacity, even then we are being blamed without understanding why!” In fact, one party is pointing fingers at others to hide their fault.
He said that the allegation that big companies are buying rice at excessive prices is also baseless. Because every organization has competition. And no officer of the organization can buy at a higher price. There is a competition between every organization to buy rice at the lowest price. Even in the case of sales, the pressure to sell quickly with less profit is in big companies.
Amin Siddiqui said, “On the contrary, the small businessmen who own the company and do everything themselves can buy at any price they want. They have no accountability. In addition, we have to provide regular information on stock purchase and sale of each organization. That’s why we have nothing to hide.
When asked why the price has increased, he said, “In the name of stock business, a class of unregistered hoarders who have bought and stored rice have destabilized the market.”
Parvez Saiful Islam, Chief Operating Officer of Square, told, “A large part of the rice that is being supplied by big companies in the market is fragrant rice.” But there is not much representation of big companies in the market of rice and rice.
He said, ‘even then, everyone has a responsibility to keep the price of rice stable. From that place, big companies are being told to control the purchase of rice. We are cooperating in that regard, so that the overall market comes down a little.
Parvez Saiful Islam said, “Even the production capacity of the corporates cannot be used by the institutions. That is, if someone’s fortnightly capacity is 100 tons, his production is not complete. And he cannot store more than three times. Considering all these, it can be seen that it is not possible to control such a large market with just a few companies.
PRAN-RFL Group Director (Marketing) Kamruzzaman Kamal told, “After the vote, the price of retail and wholesale rice in the market has increased up to Tk 6. There, the price of Pran rice has not increased even in the last four months.
Meanwhile, Food Minister Sadhan Chandra Majumder said in Monday’s meeting to the big companies that since the price of rice is increasing, they should refrain from buying rice by competing in the market. Illegal hoarding beyond capacity shall not be permitted. Besides, from now on the price of millet of rice should be mentioned on the bag.
He said, I sat in a meeting with the Millers earlier. They said corporate firms are competing to buy and store paddy. There was no need to sit with us if the corporate establishment was not dealing in coarse rice. The Millers point the finger at you. The media is also to blame. We want to know the real picture.
On the other hand, the information says that the rice-rice market in the country changes hands five times from the farmer to reach the consumer level. Costs and profits add up every time it changes hands. About 62 percent of the rice produced in the country is sold in the market. Out of this, maximum 66.2 percent of Boro season rice is sold in the market.
According to a study by Bri, there are mainly five parties involved in rice-rice trading in the market. Firstly, the farmer himself, secondly the middlemen, thirdly the stockiest, fourthly the mill owner and fifthly the rice retailers.
The production of this staple food grain in Bangladesh is increasing every year. As a result, there is no need to import. Amid various economic problems including the dollar crisis, Bangladesh rice prices were somewhat relaxed until the polls. After the election, suddenly the price of rice has increased abnormally. This has made the new government uncomfortable. Besides, the cost pressure has increased for all classes of people.

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