Rising food prices driven by supply disruptions due to recent series of strikes has pushed up food inflation for the first time in three months.
Food inflation on a point-to-point basis in October rose by 0.45 percentage point to 8.38%, which was 7.93% in September, according to data Bangladesh Bureau of Statistics released on Sunday.
Analysts expect the pace of food prices might pick up further in the coming months due to the recent series of strikes enforced by the opposition parties, demanding national election under a caretaker government system.
However, a continuous drop in non-food prices has restricted overall inflation from going up. Non-food inflation saw a fall of 0.92 percentage point to 5.02% during the month from previous month’s 5.94%. This restricted overall inflation to go up as it fell slightly by 0.1 percentage points to 7.03% in October from 7.13% in September.
“Food prices rose because of supply disruptions, which caused demand to exceed supply. I expect food prices might continue to rise because of continued strikes,” said BBS Director General Golam Mostafa Kamal.
However, the overall inflation was slightly down due to falling prices in goods and services in the non-food sector, he said.
The commodity that posted the highest price increase was potato, which surged by 46% in last one month, according to Trading Corporation of Bangladesh.
Among other food items that posted price increases during the period were pulses, which posted a growth of almost 10%; onion (local) 9% and rice (medium variety) 7%, it said.
Ahsan H Mansur, executive director of Policy Research Institute said series of strikes have affected the country’s food supply, causing food items to become more expensive.
He said food price has increased during the shutdown that caused higher transport cost. “If food costs continue to spike, food inflation could go up further in coming days. Such an increase would hit consumer spending and could destabilise inflationary expectations,” he said.
In the rural areas, food inflation in last month rose to 7.86% from 7.43% in the previous month. During the period, the non-food inflation in rural areas was found declining as it was 4.84% from 5.59%.
In the urban areas, the food inflation rate witnessed rising trend during the period as it stood at 9.64%, up from 9.11%.
The non-food inflation rate in urban areas also witnessed a downward trend in October as it stood at 5.28%, down from 6.44% in September.
