Rice Price Remains Resilient Against Global Economic Slowdown
Published on: November 4, 2023.
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Despite a global downturn in rice prices, the cost of rice in Bangladesh has been steadily increasing, particularly affecting poorer sections of the population, according to market surveys. In October, while the FAO All Rice Price Index showed a decline, prices in Bangladesh continued to rise, compounding the consumer hardship caused by general price rises. The decline in export quotations for rice in major markets, including Asia, also contributed to the rise in prices. Conversely, Indonesia’s Bulog and India’s export quota exception for white rice helped to sustain October deals. However, without substantial purchases from other buyers, export quotations fell across Asia, with factors such as Thailand’s weakening baht and new crop arrivals in Pakistan influencing prices. Importable rice prices in India, Pakistan, Thailand, and Vietnam ranged from $421 to $547 per tonne.
While the global market experienced a downturn, the rice market in Bangladesh defied this trend in October, with prices of coarse and medium varieties of rice increasing after remaining stable for the previous five months. The price of coarse varieties rose to Tk 54-56 per kilogram, while medium varieties increased to Tk 62-65 per kilogram, representing a rise of Tk 3.0-5.0 per kilogram compared to September. Market reports indicate a 6.0-10% increase in rice prices in October, although the Trading Corporation of Bangladesh cited a lower increase of 2.0-2.5%. Groceries reported higher prices for medium-variety BRRI dhan-28 rice and coarse hybrid and guti swarna rice. However, prices of finer varieties of rice remained stable at their previous highs. The Directorate-General of Food reported significant purchases of rice during the Boro season, with public warehouses holding a sizeable stock of rice.
Consumers in Bangladesh are facing increasing food prices across various essential commodities, including vegetables, fish, meat, eggs, onions, and potatoes. This rising cost of essentials, coupled with stagnant incomes, is expected to lead to reduced food intake for millions of people. The Consumers Association of Bangladesh has called on the government to expand its market operation of subsidised rice sales and implement a timely import policy to address market volatility. The Ministry of Food shared data indicating that no rice has been imported by the government or private sector in the first four months of the current financial year (FY’24), compared to 1.05 million tonnes imported in FY’23. However, the government has set a target to obtain more than 15 million tonnes of rice from the Aman harvest, which has already commenced in some parts of the country.
