Economics Assignment

Eicra Binte Islam

Section - A
Grade - 11

Soaring Prices Of Rice

21 August 2023

Introduction To Rise In Rice Prices

Prices of all varieties of rice have increased by up to 30% since the beginning
of June, due to higher demand from Bangladesh,
Iran, Iraq, and Saudi Arabia and also a shortage in
paddy acreage in several states.

Prices of non-basmati parboiled rice have surged

nearly 12% in the past ten days, as markets such
as Africa and West Asia are heavily buying this
variety of rice from India to meet their domestic
demand. (The Economic Times) August 2023

How Inflation Affects Rice Prices

“Over the last one week, the prices of both coarse and fine rice varieties rose
by Tk 5 to Tk 10 per kg in retail markets, worsening things for the poor and
fixed-income groups, already struggling with the rising cost of living.”

Interview Response: "Things have become extremely difficult for

limited-income people like me because of the soaring price of rice and other
essentials. If prices continue to go up, how will we survive?" questioned Abu
Saleh, a college teacher in Rajshahi. ( The Daily Star ) July 2023
2

Reasons Why Rice Prices Have Increased

Rice prices can increase for various reasons, often
driven by a combination of economic,
environmental, and geopolitical factors. Here are
some common reasons why rice prices may rise:

Droughts and Natural Disasters (Supply Factor): Extreme weather

events, such as droughts or floods, can devastate rice crops. Reduced
yields lead to a decrease in rice supply, which in turn drives prices
higher. Climate change is increasing the frequency and severity of such
events, further impacting rice production.
Increasing Production Costs (Supply Factor): Rising prices for inputs
like fertilizers, fuel, and labor can increase the cost of rice production.
These higher costs are often passed on to consumers through higher
rice prices.
Market Sentiment and Speculation (Demand Factor): Market
participants often respond to news, forecasts, and market sentiment. If
there are concerns about future rice supplies or geopolitical issues,
traders may speculate on rising prices, pushing them higher.
Increased Demand (Demand Factor): Growing populations and
changing dietary preferences in countries where rice is a staple food
can lead to increased demand. When demand outpaces supply, rice
prices tend to rise.

Sources: ( FAO + World Bank (Published Reports) + Daily Star Article + The Economic
Times ) June 2023
3

Prices Of Rice Comparison (2018 - 2023)

Source: July 2022 World Food Program