Rice stock plunges to 50 pc risky level

Zarif Mahmud: The stock of rice, the staple food grain of the country, has felthighest level of risk to 800,000tonns mark. According to the Ministry of Food, from July to April 17 of the ongoing fiscal year (2023-24), the stock of rice in the government warehouses has gone down by more than 50 percent as compared to the same period of the previous fiscal (2022-23). Individuals concerned assume that discontinuation of importing rice at the government level, failure to achieve the target of procurement from the local market and increase of distribution under different government programs have played a major role in this regard.
As of April 17, the stock of rice in the government warehouses was 877,000 tons. In July, the first month of the current fiscal 2023-24, the stockpile was 1.76 million tons. That went down to 1.62 million tons. In January, the stock decreased further to 1.428 million tons.
On April 6 of last fiscal (2022-23), the stock of rice stood at 1.385 million tons. Based on this calculation, the government stock of rice in the warehouses dropped by 508,000 tons or nearly 37 percent in a span of one year.
There was instability in the rice market from time to time recently although the government claimed record production in last few seasons.
The government has not yet imported any rice in the current fiscal. As a result, the government warehouses are solely relying on the local procurement. The Food Ministry, however, could not achieve the procurement target in Aman season. Due to the price hike of essentials, the government had to distribute food grains under its different programs more than any other time. Experts believe that these are the main reasons behind the declining stock.
They say that the rice market became unstable on different occasions owing to the declining stock. In 2024 calendar year, the prices of rice got highe in January and twice during the Ramadan. The upward trend still exists.
“It is natural for the traders to take the opportunity of a dwindling stock. They increase the prices,” former Food Secretary Abdul Latif Mondal told. “It will take some time for Boro rice to arrive in the market. There should have been import of rice at government level earlier to keep the market steady. A price increase will make the people belonging to lower middle class suffer even more. They are already in distress. Their situation will worsen further if there is a price hike before the arrival of Boro.”
Mainly, there are three varieties of rice in the market – coarse, medium and fine. Coarse variety includes Swarna, China Irri, hybrid and imported ones. Paijam, Lata, BR-28 and Parija are the medium ones while Najir, Katarivog, Jirashail and Miniket belong to fine variety. The prices of almost every kind of rice went up in last one month.
According to information available from the Trading Corporation of Bangladesh (TCB), coarse rice is currently sold at Tk 50-Tk 52 per kg. The price was Tk 48-Tk 50 only a month ago. Medium rice is selling now at Tk 55-Tk 58/kg against Tk 52-Tk 56 one month ago. The fine rice costs now Tk 65-Tk 76/kg against Tk 62-Tk 75/kg a month before.
Market observers fear instability in the rice market if effective measures are not taken immediately to increase the stock. Of course, officials of the Food Ministry, consider the current stock adequate. The stock will increase once the procurement of paddy and rice of Boro season begins, they say.
Rice traders of Naogaon, a trading hub, the prices of rice will fall after the Boro harvest. “Due to short supply, the prices of rice have slightly increased. New rice of Boro season has already begun to come to market. When the harvest will be in full swing, the prices will go down,” Sukumar Brahmma, a Naogaon wholesaler told.
“The new harvest has begun. The weather remains favorable. Boro will hit the market at the right time if there is no big natural calamity. Prices of every rice will drop once Boro will reach the mill gates, Naogaon District Rice Mill Owners Association General Secretary Farhad Hossain Chakdar told.
Many blame the government’s decision not to import rice for the price hike of this essential commodity. Sources at the Food Planning and Monitoring Unit (FPMU) of Food Ministry say that the government did not import any rice as of April 16 of the current fiscal. The government imported 1.056 million tons of rice in the previous fiscal. In 2021-22 fiscal, some 988,000 tons of rice were imported at the government level while the imported amount was 1.359 million tons in 2020-21 fiscal.
Albeit the imports of food grains went down in the current fiscal, the distribution under different government programs increased. A target was fixed to distribute 3.092 million tons of food grains in the ongoing fiscal. As of April 11, a total of 2.534 million tons of food grains were distributed. During the same period of last fiscal, the government disbursed 1.973 million tons of rice and 413,000 tons of wheat.
In general, the Food Ministry procures paddy and rice in Aman and Boro seasons. As per government figures, 17.4 million tons of rice were produced in last Aman season which was more than any season in the past. Besides, the government claimed that a record amount of rice was produced in the Boro season.
In the last Aman season, a target was set to procure 833,000 tons of rice at the government level. But, the government could collect 659,000 tons of different types of rice.
Food Ministry officials hope that the market will be stable after the upcoming Boro harvest. They say that Boro rice will come to the market within a few days. Paddy and rice will be procured at the government level in the Boro season. Stock will increase and prices will drop.
“Stock is adequate considering the time of the year,” Food Secretary Ismail Hossain told. “It is not correct that prices of rice increased due to decreased stock. The rice market was a little unstable during post-election period. But, the market is under control after that. Some varieties saw a little increase. Once Boro rice comes to the market, prices will fall. The government will procure paddy and rice in the Boro season according to the need.”