The price of rice continues to rise in the market, accompanied by increasing prices of vegetables, onions, and eggs. These hikes are causing significant distress and hardship for ordinary consumers.
In July 2024, food inflation in the country reached 14.1 percent.
Back in November, the rate was at 13.8 percent. Subsequently, favourable weather and increased agricultural production led to improved market supply and a gradual reduction in food inflation. By June, food inflation had fallen to a low of 7.39 percent.
However, a reduction in market supply and manipulation by middlemen have once again pushed up the prices of daily essentials. As a result, food inflation rose to 7.56 percent in July, leading to greater food insecurity and public hardship.
Rice price hikes contribute the most to food insecurity. Around 51 percent of total food expenditure goes toward purchasing rice. Additional spending includes fish, vegetables, eggs, milk, and other food items. Currently, rice prices have increased by Tk5 to Tk10 per kg. Fine rice sells at Tk80–90 per kg, medium rice at Tk60–70, and coarse rice at Tk56–58.
This sudden spike in rice prices is abnormal, especially following a strong Boro harvest. Government warehouses are also well-stocked. Meanwhile, rice supply has increased in the international market, with global prices dropping by over 16 percent in the past year. In this context, the main factors driving domestic price increases are hoarding and unscrupulous profiteering.
Another contributing factor is the government's increased procurement from rice mill owners and traders to bolster internal reserves. This has limited open market supply and further escalated prices. To counter this, the government can import rice at lower international prices and sell it at subsidised rates in the open market, alongside expanding poverty-alleviation programmes.
Seasonal factors are influencing the rising costs of vegetables, onions, and fish. Summer vegetable production is typically lower, and it drops further during the monsoon. Recent heavy rainfall has disrupted vegetable cultivation, with much of the produce spoiling. This has reduced supply and driven prices up by Tk20–25 per kg in many cases. Egg prices have surged alongside vegetables.
To lower the cost of vegetables, eggs, and other perishable agricultural goods, steps must be taken to increase production, reduce spoilage, and improve the supply chain—particularly by curbing the influence of middlemen.
Onion prices have risen to Tk80–90 per kg. This year’s onion harvest was a record 3.9 million metric tonnes. Even after accounting for a 25–30 percent loss due to spoilage, around 2.7 to 2.8 million tonnes remain for consumption. To avoid hoarding and stabilise prices, the country needs to import at least 6,00,000 to 7,00,000 tonnes of onions.
The government must swiftly import onions from multiple foreign sources to increase domestic supply and restore price stability in the market.
The writer is an agricultural economist
