Food inflation nearly doubled in March, spurred by rising prices for various essential commodities, including rice, that affected poor and fixed income groups, particularly in the rural.
In March, food inflation was 6.89%, up from 3.89% over the previous year and 6.84% Compared with February, according to data released by the Bangladesh Bureau of Statistics yesterday.
"The rise in food inflation reflects sharp increases in rice prices," said Zahid Hussain, senior economist at the Dhaka office of the World Bank.
The reasons for the rice price spiral were increased tariffs on rice imports, lower public rice stocks that limited the government's ability to counteract price fluctuations through interventions Based on the market and production losses due to rapid flooding in the air zones.
During fiscal year 2016-17, the government was subject to import duty on rice from 10% to 25%.
Rice stocks in public warehouses stood at 4.90 lakh tonnes at the end of March, down 43.7% from the previous year, according to data from the Ministry of Food .
However, overall inflation fell in March to 5.39 percent from 5.65 percent a year earlier due to lower non-food prices.
Inflation data come at a time when prices for various essential commodities, mainly rice, have reached a new level, hitting poor and fixed-income groups.
The average monthly retail prices of coarse rice, which was Tk 35.84 per kg in January in Dhaka this year, reached 37 000 Tk per kg in March. In February, it was Tk 37, according to Food and Agriculture Organization
Global inflation has climbed since December last year. Inflation rose to 5.31 percent in February against 5.15 percent in January this year, according to BBS.
While disclosing the inflation figures, the Minister of Planning EHM Mustafa Kamal said that the increase in food prices is "temporary" for crop losses. "But we will not give margin to traders to raise rice prices," he added, adding that the government is importing 2 lakh tons of rice.
"How many crops have been lost? 2 lakh (tons)? 4 lakh (tons)? That is no more than that," he added.
The Ministry of Agriculture estimates that rice losses from flooding and explosion would be 7.5 lakh tons, a senior official said.
However, consumers were relieved of rising costs by non-food products.
Non-food inflation fell to 3.18% in March against 8.36% a year earlier. But it rose from 3.07 percent in February this year, shows the BBS data.
"The widespread decline in non-food inflation is attributable to weakening demand resulting from a sharp decline in remittance income and low credit growth , While cost reduction factors remain largely contained, "Hussian said.
He said that the overall inflation is roughly within the range of monetary policy objectives.
But there is no room for complacency, as evidenced by the slight increase in non-food inflation in March compared with February and the sharp increase in food inflation by Compared to the second quarter of the current fiscal year, added the WB economist.