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Food inflation hits record high

Study says population boom fuels the price rise

Rejaul Karim Byron and Sohel Parvez
Food inflation hit 15.38 percent in April in rural areas, hitting a record on a point-to-point basis in the last three years.
The General Economic Division of the Planning Commission has sent a special note on inflation to government high-ups, identifying population as one of the causes for rising inflation.
It said every year 5 lakh tonnes of additional food grains are required for population boom.
According to Bangladesh Bureau of Statistics (BBS) data released yesterday, the overall inflation was 10.67 percent in April, up from 10.49 percent in March.
Inflation data from three levels — national, rural and urban — shows that food inflation increased at every level. But non-food inflation has decreased in the rural areas, whereas it marked a rise in the urban areas.
In April, non-food inflation in the rural areas was 3.90 percent, which was 4.39 percent in March. In the urban areas, non-food inflation was 4.18 percent in April, up from 4.13 percent in March.
Food is mainly produced in the rural areas, where food inflation is also intense. In April, it was 15.38 percent, which was 12.04 percent in the urban areas.
However, General Economic Division has sent to the ministries concerned a study paper on why the inflation was rising and how it can be contained.
In South Asia, the highest inflation was in Pakistan followed by Bangladesh. In Pakistan, inflation was 13.04 percent in April when it was 10.67 percent in
Bangladesh. But it was 8.82 percent in India and 5.60 percent in Sri Lanka.
The study note said the main cause of inflation in Bangladesh is excessive money supply and price hike on the international market. It said Bangladesh has nothing to do regarding the price spiral on the world market. However, to keep the money supply in check the government has been asked to take some steps.
The note said a major cause of the rise in money supply is remittances sent in by the expatriates. The government can introduce various projects so that the remittances are used in investment instead of buying consumer goods.
However, a positive sign is that after harvesting of bumper boro crop, the rice prices have started coming down. According to Trading Corporation of Bangladesh, the prices of different qualities of rice fell by 5 to 7 percent in the last one month.
In this regard, Member of General Economic Division Dr Shamsul Alam told The Daily Star that alongside bumper boro, the production of vegetables such as potato, wheat and maize was good which may contain inflation between 7 to 8 percent on an average.