Rice prices: Govt finally wakes up
Thursday, 03 January 2008

Imported Indian rice being unloaded from vessels
Imported Indian rice being unloaded from vessels
Prices of rice continued to increase yesterday and the government decided to introduce open market sale (OMS) outlets across the country and ask donors to provide food grains as aid instead of money.

Coarse rice was sold at Tk 32-33 yesterday, increased by Tk 1-2 per kilogram, at retail shops in the capital.

Bangladesh Rifles (BDR) also increased the prices of coarse rice from Tk 20 to Tk 25 per kilogram at its fair price outlets where rice and other commodities are sold at minimum prices.

Col Mujibul Haq, BDR commander in Dhaka, told The Daily Star that they have increased the prices to prevent misuse of the subsidised prices as many people buy rice from their outlets and sell it at local markets.

Swarna rice, imported from India, was sold at Tk 34 while its price was Tk 32 on Tuesday. According to yesterday's list of the Trading Corporation of Bangladesh (TCB), the prices of normal quality Paijam and Lata rice were Tk 34-35 per kilogram. The varieties were sold at Tk 27-29 a week ago.

The TCB data showed that the price of coarse rice was increased by 26-30 percent in last one month while the increase in last one year was by around 70 percent.

Finance Adviser Mirza Azizul Islam yesterday said the government will sit with traders to find ways to keep the rice prices at a tolerable level.

Visiting a number of BDR-run fair price outlets in the capital yesterday, it was found that people with low incomes were standing in long queues to buy rice for Tk 25 per kilogram.

Demand for rice at these outlets has increased recently, BDR officials said. "Usually, we sold 150 tonnes of rice a day from 40 outlets, but in the last couple of days we have sold over 200 tonnes of rice a day," said a BDR official.

After a meeting of the Food, Planning and Monitoring Committee, Food Adviser Tapan Chowdhury yesterday said OMS outlets will be introduced soon to contend with the increasing prices of rice.

He said the BDR will be supplied with 15,000 tonnes of rice for selling at subsidised prices while another 5,000 tonnes of rice will be supplied for workers in the closed mills areas in Khulna.

Meeting sources said the price of rice at the OMS outlets will be around Tk 25 per kilogram.

The government will also write to all donors, asking for food grains as post-Sidr aid instead of money, the sources said.

Mirza Azizul Islam and Local Government, Rural Development and Cooperatives Adviser Anwarul Iqbal were also present at the meeting.

Food ministry officials said there was steady increase of rice prices as domestic production was less because of frequent floods, the recent cyclone and high prices on international market. "But we are confused about the skyrocketing rice prices in recent days, the season for Aman harvest," said a senior official of the ministry.

"Even we have the same stock of food grains as last year," he said, adding that the ministry is investigating the reasons for this unexpected price hike.

Rice traders at the Karwan Bazar wholesale market, meanwhile, blamed the increased price of rice imported from India for the increase in the prices of local rice.

"The quality of local rice is better than that of Indian rice and comparing the quality traders have increased the prices of local rice," a trader at Karwan Bazar said.

Aman paddy was sold at Tk 550 per maund when the harvest started a month ago but following the price increase of imported Indian rice, the price of the same paddy has jumped to Tk 750-800.

Sources meanwhile said a two-member delegation of the food ministry will visit India soon to discuss import of five lakh tonnes of rice pledged by the Indian government as aid for the cyclone-hit people. The delegation will finalise the prices of rice as well as time and ports of the delivery.

"If five lakh tonnes of rice is imported from India soon, it will increase the supply in the market and thus reduce the prices," said a ministry official.

Besides, donors have pledged to provide another five lakh tonnes of food grains as aid instead of money. Food ministry officials, however, said donors said they are facing a lot of complexities in providing food instead of money.

Talking to reporters, Finance Adviser Mirza Azizul Islam blamed the price hike in local markets on the price increase in the global market. "It is a must that the domestic market price will find its parity with the global market in an import-dependant country," he said.

"We are continuing to import rice...We were unaware that India would raise the price of rice to $500 from $425," he said, adding that China has also imposed export tax on food grain.

The finance adviser said import of rice by the private sector has stood at 21 lakh tonne as of December of this fiscal year while their total import during the whole year was 24 lakh tonne.

Source: The Daily Star 

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