Food inflation in Bangladesh: causes and consequences

Abstract

This paper explains the historical trend of food inflation in Bangladesh. The paper investigates the main factors that were the driving forces of food inflation in Bangladesh over the years. Using 12 years data it is found that some of the short run factors like floods, cyclones, droughts, lack of grain reserves and high oil prices as well as some of the long run factors such as controlling supply chain through syndication, negligence of agriculture sector, trade liberalization and increasing trade deficit, increasing dependency on import, fluctuations of food grain prices in domestic Market and currency depreciation are mainly responsible for rising food inflation in Bangladesh. Consequences of food inflation are most severe on poor and middle class people. Due to middle men and brokers farmers did not get the benefit of increase of price of food grain.