The unstable dollar price going to impact rice price even more
11 November 2022
The price of rice increased several times in the last few months. The same is with the wheat flour. Reportedly, poor people who make up the bulk of the country's population have cut their consumption of nutritious foods just to keep their stomach full. While this has serious health consequences, for many, even this little has become impossible to manage. They are keeping hungry. Against this backdrop, it is apprehended that the price of rice will shoot up again as rice traders are not interested in importing the commodity from the international market because the dollar is increasingly becoming pricier.
The major share of imported rice-it is 80%-comes from India where its price is still stable as it was not affected by the Russia-Ukraine war that caused volatility in the global food market. China, Vietnam and Pakistan are also among the exporters of rice. According to rice traders, the imported rice would cost at least Tk 5 more per kg than the local produce thanks to a strong dollar and high import duty.
There is now a double whammy situation here. Firstly, a considerable number of banks do not have adequate dollar reserves and have stopped or are discouraging opening LCs for businesses. Secondly, many traders have also lost interest in importing rice. This is indicative of a serious food crisis ahead, since local production of rice is way behind meeting the consumption demand of the country. Moreover, there are many dishonest businessmen who do not let go in vain any opportunity to earn quick bucks from the consumers, illegally though.
In absence of import of rice, the price of locally produced rice will inevitably go up. Still, the Food Minister, Sadhan Chandra Majumder, recently sounded an alarm that rice production might decline this year due to natural calamities. Keeping the impending crisis in mind the government is now reportedly purchasing paddy and rice at the grassroots level to boost its food stock.
Though this step itself is a good initiative, still its success to contain rice prices in the market is very doubtful, if rice traders or even the government cannot import from the international market due to the ongoing dollar crisis which will be more acute in the months ahead.
