The domestic prices of rice have surged to historic high despite bumper harvest of paddy. The ever-increasing rice prices are an abnormal and profoundly alarming aspect when global rice prices are falling.
Rice alone was responsible for more than half of the recent food inflation. Medium and coarse varieties of rice contributed over nearly 42 percent of the inflation, while all other varieties of rice brought about double-digit inflation. The contradictory market behaviour baffles the economic principle when the government’s procurement target has been a robust one. Retail prices, in theory, should have been stabilised if not decreased. The economic theory has not worked at all and prices have surged instead.
This aspect of rising rice prices suggests that the problem lies not with the production or less import costs, but with a deliberate market manipulation.
Bangladesh is set to increase rice import target in the ongoing 2025-26 marketing year to ease soaring domestic prices of rice. This step is going to be taken to curb food inflation by taking advantage of relatively cheap global rice prices.
However, the consequences of market manipulation expand far beyond. For the common man, especially the poor, rising rice prices directly bring about the reduced nutrition, lower savings, and more economic insecurity for the poor.
The government should, therefore, respond quickly to check the abnormal rice market behavior. The operation of cartels needs to be investigated strictly and dismantled through stringent enforcement and non-stop monitoring of millers and wholesalers. Besides, distribution channels must be expanded to ensure that procurement is matched by a timely release into the market. Furthermore, private importers must face sanctions for the delay in releasing their stock into the market. Rising milling costs, supply chain inefficiencies and inflationary pressures must be checked as those have all contributed to the rise in rice price, pushing the staple further out of the reach for many households. Stimuli have been introduced to encourage imports. Tariffs have also been slashed allowing private importers only a two percent advance income tax. If the market can be stabilised through imports, open market sells, and proper distribution to low- income groups, inflationary pressure may ease, according to expert opinion.
The battle against inflation in the country cannot succeed as long as staple remains a victim to the profiteering strategy of the syndicates. A decisive action against market manipulation must be taken to combat inflation; otherwise, a bumper harvest or robust procurement will not benefit consumers.
As rice is the backbone of food security and a central driver of household expenditure in the country, it should remain affordable for all, and not as a commodity for exploitation by a section of crooked syndicate businessmen.
