Bangladesh Food Security Bulletin: No. 9, Oct-Dec 2012
In the current quarter the countrywide retail prices of rice remained stable at 25 Tk/kg, however, this is 2.5 percent higher than the previous quarter. When compared to the high food prices of 2008, the retail prices of most of the essential food commodities are significantly lower except for lentils. In Dhaka Sadar market, the price of lentils crossed the 2008 peak price in May and reached 133 Tk/kg in December which is 45 percent higher than the 2008 peak price. The retail price of whole grain wheat flour (atta) in the current quarter has increased by 10 percent compared to the last quarter. It is expected that following the decrease in the wholesale price of wheat in December the retail price will decrease.
The general inflation rate after declining by 31 percent from February to October began to rise again and reached 7.69 percent in December. The increase in the price of wheat in the domestic market following the price hike in global markets may have contributed to the recent increase in food inflation. The fuel hike effective from January 2013 may also cause further food price inflation.
The remittance inflow set a record in the month of October 2012, during which the Muslim festival of Eid-ul-Azha took place, with the country receiving USD 1.45 billion, the highest in any month in Bangladesh’s history. In constant Taka terms (of the year 2000), remittance inflows in the current quarter were 21 percent higher than in the same quarter of 2011.
For the FY 2012/13, the Department of Agricultural Extension (DAE) has set Aus, Aman, Boro and wheat production targets at 2.37 million MT, 13.3 million MT, 18.76 million MT and 1.03 million MT respectively. The United States Department of Agriculture (USDA) marginally lowered its production forecast for Bangladesh to 33.8 million MT anticipating crop damage due to flash floods in the north western region.
Aman rice procurement by the government started on 9 December, 2012 at 26 Tk/kg for parboiled rice and 25 Tk/kg for white rice. As of 31 December 2012, the government has distributed a total of 0.83 million MT of food grains under the Public Food Distribution System (PFDS), which is almost the same compared to the total distribution (0.82 million MT) at the same time last year. The Open Market Sales (OMS) drive continues in major cities and districts of the country, with rice being sold at 24 Tk/kg and whole grain wheat flour (atta) sold at 20 Tk/kg.
Based on wage data collected by WFP in December a male agricultural wage labourer could buy 10.5 kg of rice with his daily income of 270 Taka, an increase of 20 percent from the purchasing capacity a year ago. The decrease in the average retail price of rice by 21 percent from a year ago has partly contributed to the improved purchasing capacity. The daily wage of a female agricultural labourer in December was 177 Taka - leading to only 6.7 kg/day in rice purchasing capacity. November to mid-January is considered agricultural peak season.
The divisional variation in monthly ToT is large between the north and the south. In Rajshahi division the monthly rice purchasing capacity in December was 181 kg for male agricultural labourers whereas in Khulna division it was 300 kg and in Barisal division it was 305 kg. With rice prices being the same in both regions; this difference is mainly due to the difference in regional wage rates.
The focus group discussions with the urban poor in the current quarter revealed that housekeepers (maids) have the lowest rice purchasing capacity. Though the income level of the urban poor households is higher than that of the rural poor, their overall living cost including food expenditure is higher than that of the rural poor which makes them no less vulnerable.
FAO’s food price index dropped for the third consecutive month to an average 209 in December 2012 after surging during the July-September period. This reduced previous fears of a looming food crisis.