Rice price pressure

The problem with the unabated price hikes is that it fuels inflation, simply because of the fact that cereals constitute the central element in our cost of living index, more so in a predominantly rural Bangladesh where the food basket is almost entirely made up of rice. And the villages of Bangladesh happen to be where people with the least purchasing power live. So, the people were already in the grip of hardship.

As if that was not enough; we now have another spate in the prices of cereals. The increase in the diesel price ironically taking effect on the new year's day has raised the cost of transportation of rice from the growers' level through the wholesale network to the retail market. Furthermore, the import cost of rice rose, this having been caused by production shortfall in the traditionally rice exporting countries. Output in India, Thailand and Philippines declined. Add to this the fact that the value of taka depreciated in relation to dollar in which we paid for the rice import. So, we ended up paying more to procure rice from abroad.

Tap here to add The Daily Star as a trusted source

What's even more worrying is an apprehension that boro cultivation on which we are pinning our hopes to ease off the price pressure might be hindered by the increased diesel cost.

The government is apparently working on a two-pronged strategy: first, it might resume open market sale (OMS) of rice; and secondly, have the private sector import rice on a liberal scale. In the light of our previous experience with OMS, marked by lack of coordination and timeliness, the resumed effort will have to be much better managed. And, the private sector import worth ten lac tonnes which is supposed to be in the pipeline must materialise. Maybe the government should also consider reducing the import duty on diesel and kerosene so as to ensure that their prices come down in the best interest of the peasantry.