Rice Prices Drop 24.19% Globally but Rise 7.14% Domestically

Economic Desk

Despite government tax and duty exemptions on rice imports to ensure supply ahead of Ramadan, and the recent harvest of Aman paddy, rice prices in Bangladesh have continued to rise. Over the past year, domestic rice prices increased by 7.14%, while global prices dropped by 24.19%, according to a report by the Bangladesh Trade and Tariff Commission (BTTC).

The BTTC report highlights that Bangladesh’s annual rice demand is between 35 and 38 million metric tons, with 3 million metric tons required during Ramadan. However, the country’s annual production stands at 40.695 million metric tons, indicating a surplus. From July 1, 2024, to January 5, 2025, letters of credit (LCs) were opened for importing 474,667 tons of rice, but only 184,526 tons were imported.

On January 5, coarse rice in local markets was priced at Tk 50-55 per kilogram, compared to Tk 48-50 a year earlier. Meanwhile, the global price of rice has fallen from $652 to $525 per metric ton over the same period.

In October 2024, the government reduced rice import duties from 62.5% to 22% and later eliminated all other duties, retaining only a 3% advance income tax. However, the benefits of these reductions have not translated into lower market prices.

Amid growing anxiety among middle- and low-income families, the BTTC suggests that increased rice imports may stabilize prices. Abdur Rashid, president of the Rice Mill Owners’ Association, advocates for government imports, stating, “We should procure rice from countries offering lower prices and address artificial supply shortages if any arise.” He also emphasized the need for at least 100,000 tons of fine rice imports, citing no shortage of coarse rice in the country.

While duty exemptions have also been applied to other Ramadan staples like oil, sugar, dates, eggs, onions, and potatoes, products such as chickpeas and lentils remain taxed. The BTTC warns that rising global prices for these items could impact the domestic market and suggests close monitoring of local stocks and supply.

Chickpeas have an annual demand of 180,000 to 200,000 tons, with 100,000 tons needed during Ramadan. Local production is just 3,000 tons, with imports ranging from 150,000 to 200,000 tons annually. From July 2024 to January 2025, 48,981 tons were imported, up from 17,447 tons during the same period the previous year. Lentils have an annual demand of 700,000 tons, with 100,000 tons required during Ramadan. Local production is 169,000 tons, while imports amount to approximately 500,000 tons. Lentil imports increased by 72% year-over-year in the first five months of FY 2024-25.

Despite reassurances from traders about price stability, BTTC remains cautious. Retail prices for chickpeas and lentils have already risen significantly compared to the previous year.

The BTTC suggests that stable foreign exchange rates, reduced fertilizer and fuel costs, and effective fiscal policies can positively impact local production and supply costs. However, challenges persist as Ramadan approaches, with rising prices of other staples such as poultry, spices, and cooking oil adding to consumer concerns.