Rice prices are seen rising as transport cost spirals

A rise in transport costs and supply crunch due to a strike following a 23 percent hike in diesel prices has affected Dhaka’s markets, triggering fears of a further increase in the prices of rice.

The cost of transporting rice from Kushtia, the largest supplier of the food staple, to Dhaka has increased by at least 22 percent per truck, leading to an increase in the price of rice by Tk 12 per sack of 50 kg, traders and mill owners said.     

Supply plummeted during the transport strike that continued for three days, Siddiqur Rahman, a wholesaler at Dhaka’s Karwan Bazar, said on Sunday. The prices of rice increased by Tk 50 per sack after imports from India stopped. Now the prices will go up as much as Tk 15 per sack if the additional transport costs are counted, the trader said.   

Mohammad Rasel of Janata Rice Agency said only Rashid Rice Mill supplied rice to Dhaka amid the strike with its own trucks, but charged Tk 3,000 more than the usual Tk 14,000 for transport cost.

Although the market is stable now amid the Aman crop season, the fuel price hike will lead to a supply crunch in the next one or two days, Rasel fears.   

At Mirpur, retailers were selling the fine verities of rice at Tk 57 to Tk 64 per kg, medium standard rice at Tk 48 to Tk 54 and coarse rice at Tk 44 to Tk 50.

According to the Trading Corporation of Bangladesh or TCB, rice prices increased by around 15 percent in a year until August.

Retail prices have not increased during the strike, but supply fell in the wholesale markets, said a retailer in Pirerbagh. “Prices will increase slightly due to the supply crunch,” he said.    

The import of rice from India with special government permission stopped a week ago, but the good news is the markets in the rural areas are expecting a supply of paddy from Aman harvest soon. 

The transport owners and workers began the strike on Friday. The bus operators called off the strike on Sunday after the authorities agreed to raise the fares by 27 percent.

But Bangladesh Truck, Covered Van and Tanker Lorry Prime Movers Owners and Workers Coordinating Council decided to continue their transport strike to demand a reversal of the diesel price hike.

Mohiuddin Harun, a wholesaler in Mirpur’s Shah Ali, said he ordered one truck of rice from Rashid Rice Mill on Sunday after no supply during the strike. “They have increased the transport cost by Tk 3,000. It will affect the retail prices.”

He is selling Miniket rice at Tk 2,750 to Tk 2,850 per sack, BR-28 Tk 2,120 to Tk 2,250, Paijam Tk 2,250 to Tk 2,300, Indian Paijam Tk 2,100, and coarse IRRI atTk 1,900.

Hundreds of trucks were stranded in Kushtia’s Khajanagar, the largest rice trading hub of Bangladesh, after the owners called the strike. They left on Saturday morning. Workers were loading trucks with rice on Sunday for shipment later in the night. 

Arshad Ali Prodhan, owner of Dada Auto Rice Mill in Khajanagar, said supply from the mill fell to about 20 tonnes a day from 100 tonnes due to the transport crisis.

The transport cost of paddy has also increased by Tk 1,000 per tonne, he said, hinting at raising the prices of rice at his mill.

A hike in rice prices by the millers was reflected in the words of Abdus Samad, president of the district’s Rice Mill Owners Association. “I supplied rice from previous orders. The prices will be readjusted with the transport costs at the two ends in the new orders.”

Kabil Agro Mill in Khajanagar was selling Miniket rice at Tk 1,410 per 25 kg sack, Basmoti Tk 1,630, Katari Tk 1,425 and Kajallata Tk 1,270.