>Boro harvest not to have longterm effect on price

>AS Boro harvest has started, deeper questions like whether the country’s domestic price could remain disconnected from international prices and whether traditional stockists would be allowed to play their role in food security have arisen, Inam Ahmed writes in The Daily Star. (Read full report)
Economists say although the harvest could cause a temporary price disconnect, there are little chance of longer term price dampening because of the international situation. While speculations are rife about the future rice situation, global major crop season is still eight months away and wheat news is bad.
Already Bangladesh rice price is disconnected from the international market where price is much higher; further and deeper disconnect will lead to a messy domestic market situation.
Meantime, the government is now faced with a challenge of giving a huge subsidy on rice for open market sale, fuel and fertiliser, and quick creation of employment because ultimately people’s income has to adjust to the higher price regime that is expected to prevail for unforeseeable future.
All this poses a longer term macroeconomic management challenge for Bangladesh — it has to target inflation with monetary and fiscal policies and exchange rate management.
Already the economy has a few comfort zones that the country should carefully manage to get the best output, but there are also some strains and paradoxes that it should address soon.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s