Farmers get Tk 120, but shoppers pay Tk 400 for green chillies

The price of green chillies climbs by Tk 250 to Tk 300 per kg on the way from farms to consumers, with growers selling at Tk 100-150 per kg while prices at retail have surged to Tk 350-400.

An analysis of prices at different stages of the supply chain in Dhaka and five other districts has found the gap widening as heavy rain cuts output and supply.

Farmers and traders cited heavy rainfall for wrecking crops, causing the staple's price to multiply within a week.

Market insiders believe the current crisis could have been averted had chilli imports been permitted earlier.

According to the Department of Agricultural Extension and the Bangladesh Bureau of Statistics, the country's annual demand for green chillies stands at around 550,000-600,000 tonnes, against production of roughly 750,000 tonnes.

Despite production outstripping demand, the green chilli market turns volatile once or more each year, largely because the crop is perishable and the bulk of it is grown in winter.

Supply runs lowest around July and August, a gap the government typically bridges each year by permitting private-sector imports, mostly from India.

But with no imports this year, prices have surged, prompting the government to approve chilli imports on Sunday after retail prices crossed Tk 400.

Where Are Prices Rising?

Khondaker Mizanur Rahman, a farmer in Manikganj's Hazari Palli in Harirampur, cultivated chillies on 1.65 acres of land this year, as he does every year, but a third of his crop was destroyed by monsoon flooding.

"I usually sell around 7.5 to 9.3 tonnes of chillies each year. This time, all of it went under in the monsoon water. The plants were also hit by disease even before the rains set in, which cut the yield further.”

“Whatever was left, the rain finished off. Everything's gone now, not just for me, for everyone," he told bdnews24.com.

"Last year, I was selling at Tk 20-50 a kg to local wholesalers. This time, I'm getting Tk 110-120 a kg," he said.

Rokunuzzaman, a chilli farmer in Faridpur's Sadarpur Upazila's Raipur Union, said: "Continuous heavy rain submerged my entire field. All the plants rotted."

"I'm bringing a little to the market and getting Tk 120-130, but there are simply no chillies left in the field. Even with prices up, we're not benefiting at all," he said.

Traders say wholesale hubs are running dry, with whatever comes in from the fields falling short of even local demand.

At Jagir Bazar, along the Dhaka-Aricha Highway in Manikganj, where farmers from nearby areas bring their vegetables, Razzak, owner of Molla and Sons, said: "The chilli plants have gone under. Even without flooding, water stagnates everywhere during the monsoon. No stock has come in for 20-25 days.

“All told, we're getting just 100-150 kg, and locals are taking all of it."

Asked about current wholesale prices, he said: "We send stock to Karwan Bazar and Jatrabari. A month ago, we were sending it at Tk 40-50 a kg, sometimes even Tk 30. Now there's no supply, so prices are high. Depending on quality, it's fetching Tk 150-200."

The rural trader also expects rain to hit onion output this year, with prices for the staple likely to rise from around midway through next month.

Md Hazrat Ali, joint secretary of the Sirajganj Municipality Kitchen Market Association, said the supply of green chillies had dropped sharply in the market.

"Wholesale prices at Sirajganj's market stood at Tk 220-240 a kg, depending on quality, on Sunday. Retail prices were running at Tk 280-300," he told bdnews24.com.

Karim Ali, a local wholesaler at Bogura's Mahasthangarh Haat, said: "Tonnes of green chilli used to arrive at our market daily. Now farmers can barely bring in 10-15 kg."

"When stock runs low, wholesalers scramble to grab what's available. We're sending stock on to big Dhaka traders' trucks, keeping a small commission per kg," he said.

Situation in Dhaka

Kawsar Uddin, a wholesaler at Karwan Bazar, said 10-12 truckloads of chillies used to arrive daily from Kushtia, Jashore and Manikganj. That has now fallen to four or five truckloads.

"Unless supply returns to normal, we can't bring prices down even if we wanted to," he said.

Abdus Salam, owner of Salam Enterprise at Sadek Khan Agro Market in Rayerbazar, blamed two factors for the price surge.

"The monsoon rotted the chilli plants. Very little chilli is available at the wholesale markets, so we're having to buy at higher prices ourselves," he said.

Showing a purchase receipt from a Karwan Bazar wholesaler, he said: "I received very little stock. I bought 10kg for Tk 2,600, working out to Tk 260 a kg. Slightly lower-quality chilli came to Tk 240."

"There are no imports eithers. If imports were coming in from India, prices wouldn't have climbed this high. The absence of imports is also being used as an excuse to push prices up further," he said.

Retailer Rahman Mia, who was buying vegetables at Sadek Khan Agro Market on Sunday afternoon, also bought 5kg of green chillies.

The retailer, who sells at Mohammadpur Town Hall's retail market, told bdnews24.com: "Prices are so high I had to pay Tk 1,500 for 5kg."

That works out to Tk 300 per kg.

A visit to Town Hall market at 3pm found retailers quoting Tk 320-360 a kg, depending on quality.

Daily price data from the Trading Corporation of Bangladesh (TCB) shows the commodity's price has risen 218 percent within a month.

A month ago, chilli was selling at Tk 80-140 a kg. By Sunday, it was fetching Tk 300-400. A week earlier, the price stood at Tk 200-300.

Despite the drop in supply, Md Obaidur Rahman Mondal, director of the field wing at the Department of Agricultural Extension, considers the current price abnormal.

"Green chilli plants can't tolerate excess water, so most fields take a hit during the monsoon. This period isn't favourable for green chilli and tomato cultivation, which is why we typically need some imports at this time," he told bdnews24.com.

"But Tk 400! Even though chilli prices reach that level in some countries, there's no scope for such prices in Bangladesh or elsewhere in Asia," he said.

Off-Season Production Plan

The government has said it will take special measures to keep green chilli and tomato production stable year-round.

Obaidur Rahman said, "We sent our plan to the government [on Sunday]. From next year, around 10 million sacks will be distributed to farmers, who'll be able to grow chillies right at home. We've drawn up an incentive package."

Asked about sack-based cultivation, he said: "Saplings will be planted in the sacks from February. These sacks are designed so water doesn't collect inside. However hard it rains, the water drains straight out."

"Polythene sheets will be laid over the soil, letting water run off. This is called polymer cultivation.

"We have around 400 polynet houses. Next year, we'll bring green chilli and tomato cultivation into these polyhouses, so production won't be disrupted even during the rains.”

"If we can cut our import dependence by growing green chilli through the monsoon this way, we won't face this kind of price crisis again," he added.