Rice prices reach new lows globally while hitting record highs domestically

The World Bank recently released a report indicating that the global price of rice has decreased significantly since 2017. This drop is attributed to increased production levels and reduced import demand in countries that typically import rice. Despite an increase in production in Bangladesh, rice prices in the country have not followed the global downward trend but instead remain high.

According to the Trading Corporation of Bangladesh (TCB), the price of coarse rice in Bangladesh was between Tk 50–55 per kg in January and has now risen to Tk 54–60 per kg. Similarly, the price of fine rice, which was originally Tk 70–80 per kg, now sells for Tk 70–85 per kg. This disparity between global and domestic prices has led to ongoing rice importation in Bangladesh.

In the fiscal year 2024–25, Bangladesh imported 1.437 million metric tonnes of rice. From July to November 26, 500,000 tonnes have already been imported this year. The cost of rice production has surged in recent years in Bangladesh, contributing to the high prices. This has resulted in decreased purchasing power, leading to lower consumption of protein-rich foods and a higher demand for rice.

Khandakar Golam Moazzem, Research Director at the Centre for Policy Dialogue (CPD), highlights that rice is a staple food in Bangladesh, and any price fluctuations have a significant impact on the population. While neighboring countries like India, Sri Lanka, and Pakistan have managed to curb inflation, Bangladesh continues to face high inflation rates, although slightly lower than previous years.

Md Mahbubur Rahman, Director General of the Food Planning and Monitoring Unit (FPMU), acknowledges that despite falling global prices, domestic rice prices in Bangladesh have not followed suit. To address this issue, measures are being considered, including building sufficient rice stocks for food security, extending food-friendly programs, and potentially allowing private-sector rice imports if prices do not decrease.

The Bangladesh Trade and Tariff Commission (BTTC) reports that while local rice production exceeds demand, prices continue to rise domestically. The annual demand for rice in Bangladesh is estimated to be between 30.7–39 million tonnes, while production reaches 44.3 million tonnes, leading to price hikes despite favorable global market conditions.

Nasir Uddin, a wholesale rice trader, explains that prices have not decreased at the mill level, which is why rice continues to be sold at higher rates. While international prices have fallen, domestic market prices remain untouched due to inadequate monitoring. Despite a decrease in mill-level prices, market prices in the capital city persist at high levels, calling for better oversight.

Analysts from the Power and Participation Research Centre (PPRC) reveal that approximately 55% of a family’s monthly expenditure in Bangladesh goes toward purchasing food, particularly rice. With rising poverty levels, slow employment growth, and persistent inflation, a detailed examination of the rice market is essential to guide policy measures benefiting both farmers and consumers. More robust government monitoring and intervention could potentially alleviate the high rice prices in the domestic market.

In conclusion, despite the global decline in rice prices, Bangladesh continues to grapple with high domestic prices, necessitating strategic interventions to ensure food security and alleviate the financial burden on vulnerable households.