CPD Study: Rice Prices Double Between Farmgate and Retail, Green Chilli Up 116%

Long and inefficient food supply chains are driving a sharp increase in the gap between farmgate and retail prices of essential commodities, fuelling persistent food inflation and eroding consumers' purchasing power, according to a new study by the Centre for Policy Dialogue (CPD).

The study, titled "The Food Price Chain: Markets, Margins and Intermediaries in Bangladesh," was presented on Thursday at the Brac Centre Inn during a dialogue organised by the CPD.

Commerce Minister Khandaker Abdul Muktadir attended the event as the chief guest.

Among others present were Consumers Association of Bangladesh (CAB) President AHM Shafiquzzaman, BIDS Professorial Fellow Prof Dr M A Sattar Mandal, former BIDS Research Director Dr M Asaduzzaman, and Bangladesh Garments Sramik Sanghati President Taslima Akter Lima.

The session was chaired by CPD Executive Director Dr Fahmida Khatun, while Senior Research Associate Foqoruddin Al Kabir presented the study's findings.

The report found that the retail price of medium-quality rice doubles—rising by about 100 per cent—from the farmgate to the consumer. Green chilli recorded the steepest increase at 116 per cent, followed by onion (87 per cent), lentil (78 per cent), brinjal (72 per cent) and potato (50 per cent).

By comparison, products with shorter supply chains experienced relatively modest price increases, with eggs rising by 25 per cent, chicken by 22 per cent, beef by 13 per cent and rui fish by 10 per cent.

According to the study, longer supply chains generally lead to higher price mark-ups, highlighting the need for more efficient marketing channels.

The CPD also found that retailers depend heavily on urban aratdars—wholesalers and commission agents—for sourcing six of the 10 essential commodities. This dependence has increased market concentration, weakened the bargaining position of smaller market players and contributed to greater price volatility.

The report identified supply shortages, trader collusion and hoarding as the most commonly cited factors behind high food prices. However, it cautioned that the findings do not conclusively establish that intermediaries or market concentration alone are responsible for excessive price increases.