Recently, severe flooding has struck 11 districts in the eastern part of Bangladesh. The floods have caused significant damage to houses, farmlands and roads. The Dhaka-Chattogram route remained closed for an extended period, both on roads and railways. This disruption in transportation has naturally impacted the supply chain across the country, leading to a price increase of BDT 3-4 per kilogram of rice. However, the country’s food reserves have grown compared to previous levels. Specifically, rice reserves have increased by 158,000 tons over three weeks, reaching 1.456 million tons.

Market analysts say that traders have slightly raised rice prices due to the floods. They advise the government to increase open market sales to stabilize prices since there are sufficient public and private reserves of rice. Analysts also suggest intensifying market monitoring.

According to the Trading Corporation of Bangladesh (TCB), as of yesterday (Saturday, August 31), the price of coarse rice was BDT 52-55 per kilogram, up from BDT 50-54 per kilogram a month ago. Prices for medium and fine rice have also increased by BDT 3-4 per kilogram.

A vendor at Chatal Rice Mill in Karwan Bazar acknowledged the BDT 2-3 per kilogram increase, telling Bonik Barta, “We have to buy rice at higher prices from the wholesalers, so we have to sell it at a higher price too. If we can buy at a lower price, we’ll sell it cheaper.”

According to the Ministry of Food, as of Monday (August 28), the country’s total food reserves stood at 1.972 million tons, including 1.456 million tons of rice. Just three weeks earlier, on Wednesday (August 7), rice reserves were at 1.297 million tons—an increase of more than 150,000 tons. Despite this increase, retail rice prices have risen during this period.

Traders blame the price hike on the floods. Anis Khan of MR Traders in Karwan Bazar told Bonik Barta, “The price has gone up because of reduced supply due to the floods. Additionally, many are buying rice as relief, increasing sales beyond normal levels. Millers have raised prices as demand has outpaced supply. This has led to a BDT 3-4 per kilogram increase. If the government applies pressure, the price might drop; otherwise, it could rise further after the season ends.”

Typically, the Ministry of Food collects rice and paddy during the Aman and Boro seasons. According to government data, during the last Aman season, rice production reached approximately 10.74 million tons, higher than any previous year. The last Boro season also saw record rice production. The production target was set at 222,000 tons, but 224,000 tons were produced. Due to this record production, there was no need to import rice in the last fiscal year. There was also no rice shortage in the country during that period, leading to self-sufficiency. Stakeholders believe rice imports won’t be necessary this fiscal year either.

Sources from the Ministry of Food confirm that no rice was imported by the government in the last fiscal year. In the 2022-23 fiscal year, 1.056 million tons were imported. In the 2021-22 fiscal year, the total food grain imports amounted to 5 million tons, including 988,000 tons of rice. In the 2020-21 fiscal year, 1.359 million tons of rice were imported.

While the floods are cited as the reason for the price hike, analysts emphasize the need for stronger market monitoring. Agricultural economist Dr. Jahangir Alam told Bonik Barta, “We should maintain a minimum rice reserve of 1.2 million tons. Based on that, our current reserves are higher. Due to increased production in the last Aman and Boro seasons, reserves have grown. This year, there is no rice shortage. There are also sufficient private and farmer-level reserves. Rice imports might not be necessary. So, there’s no reason for prices to rise. While traders blame the floods, they are likely attempting to manipulate the market as before.”

Regarding the government’s role in controlling prices, Dr. Jahangir Alam said, “The government should increase open market sales. Although there are some truck sales, the Open Market Sales (OMS) program hasn’t fully started yet. If the reserves are kept in warehouses, they won’t impact the market. Therefore, the government needs to take action now. Additionally, market monitoring must be intensified. Weak management often leads to price hikes.”

Repeated attempts to contact Md. Ismail Hossain, Secretary of the Ministry of Food, for comment were unsuccessful as he did not answer the phone.