The government has taken a number of initiatives for bringing down the price of rice and the traders have made promises to act accordingly. Although the price has declined at import and wholesale levels, it has not declined proportionately at retail level. According to an estimate, the price of coarse and medium quality rice has gone down by Tk 5.0-7.0 per kg at the import level but at the wholesale level, by Tk 3.0-4.0 per kg. At the retail level the decline was by Tk 2.0 only. The millers have reduced the price of fine quality rice by Tk 2.0 per kg but at the retail level the decine was by Taka 1.0 only. As a result, the price of rice has not gone down at tolerable level.
The government has tried to keep rice price stable and took different steps after discussing with the traders. Import duty on rice has been reduced to 2.0 per cent from 28 per cent. The ceiling on imports has been lifted. Traders have also been given the opportunity of importing rice in plastic bags and the facility of transportation of rice by train.
Most of the people do their grocery shopping in the local markets. As there is no monitoring in the smaller local markets, the buyers are purchasing rice at a high price. At the moment fine rice is sold at Tk 58-60 per kg at the mill gate. At the wholesale level it is sold at Tk 60-62 per kg. In the retail market it is selling at Tk 63-65 per kg. The medium-quality rice is selling at Tk 44-48 a kg.
Smaller groceries are scattered all over the city. Price fall is never reflected in the shops of the mahallas where monitoring is nether available nor feasible. The president of the Consumer Association of Bangladesh has suggested that monitoring should be extended to smaller shops.
There are some visible reasons for increasing the price of rice such as floods and influx of Rohingya refugees. But more important are the invisible reasons like hoarding or stockpiling and market manipulation by groups of unscrupulous traders. Rumour-mongering is also responsible for price hike.
The government should must take stern action against hoarders and market manipulators.
The commercial banks have advanced loans amounting to Tk 85 billion (8,500 crores) for purchase of paddy and rice. The Bangladesh Bank has fixed a time limit of 30 days for repayment of such loans. Traders have to unload their stocks in the market so that prices do not go up significantly. The authorities should ensure that the traders follow bank instructions.
The writer is an economist and columnist.