People suffered when rice price crossed Tk 50

People faced some difficulties when the price of rice crossed Tk 50 a kg and might have run out of their savings to cope with the high price, Finance Minister AMA Muhith said yesterday. 

He said there was no doubt that people had suffered because of the high price of rice. 

"We also wanted the price to increase to some extent. It is good from that point. But when it went beyond Tk 50 a kg, some people faced problems and might have run out of their savings,” he told reporters at the secretariat.

Muhith's comments came in response to a think-tank's new research finding that says 520,000 people have fallen into poverty due to sharp increase in the price of the staple this year.

Using a computable general equilibrium model, Dhaka-based South Asian Network on Economic Modelling (SANEM) on Saturday said it found a 35 percent increase in the price of rice and the results show that there is likely to be a rise in headcount poverty rate by 0.32 percentage points due to the rice price hike this year.

This means that 520,000 people have fallen into poverty because of increasing the rice price, according to SANEM.

This report should not be trusted. One should wait at least for a year to find out whether the poverty rate has gone up or down, Muhith said, adding that his position is that he will not accept the report until a year passes.  

Rice prices hit a record high mid-August, triggered by a rumour of India banning export, by a drop production owing to crop damage caused by recurrent floods, depleting public stocks and inadequate supply from millers and traders.

On September 16, retail prices of coarse grains, consumed mainly by the poor and low income groups, shot up to Tk 50-54 a kg in Dhaka city, according to the state-run Trading Corporation of Bangladesh (TCB).

The prices, however, have come down below Tk 50 a kg thanks to huge imports and availability of subsidised rice through open market sales. 

Yesterday, coarse rice was sold at Tk 44-46 a kg, which was Tk 40-45 a month ago and Tk 35-38 a year ago, according to the TCB's market monitoring report.

Prices of fine rice varieties rose 26 percent year-on-year yesterday and coarse price 23.29 percent, showed TCB data.