Hunger pangs ring louder as food inflation jumps to 12.54%

Amid drives to rein in prices of essentials, food inflation soared to 12.54% in August, pushing up general inflation as well.

Average inflation increased by 23 basis points to 9.92% in August, inching close to a decade-high of 9.94% which was registered in May. The country has been experiencing an inflation rate exceeding 9% since last March.

Non-food inflation, on the other hand, dipped to 7.95% in August, down from 9.47% in July.

Non-food inflation remained above 9% since September and almost touched a double-digit at least, a trend never seen so high in Bangladesh's history.

Falling back to below 8% has brought some reprieve.

Meanwhile, the wage growth in August remained below the inflation, clocking in at 7.58%, which is 0.06 percentage point higher than last month.

Food inflation has been a concern around the world.

In real terms, food price inflation exceeded overall inflation (measured as year-on-year change in the overall CPI) in 90.6% of the 161 countries, according to the World Bank's food safety update released on 23 March.

But the trend has been shifting.

The UN food Agency's world price index fell in August to a new two-year low, reversing a rebound seen the previous month, as a decline in most food commodities offset increases for rice and sugar.

The Food and Agriculture Organization's (FAO) price index, which tracks the most globally traded food commodities, averaged 121.4 points in August against a revised 124.0 for the previous month, the agency said on Friday.

The August reading was the lowest since March 2021 and also 24% below an all-time high reached in March 2022 in the wake of Russia's invasion of Ukraine.

With no reflection of it in Bangladesh, the situation exacerbated as the government's food assistance for the poor and low-income people declined amid the current economic crisis, soaring inflation, and the rising cost of living.

According to the Ministry of Food, food distribution through various government programmes decreased by around 2.16 lakh tonnes in a year.

Until 15 June of the current fiscal year, the government distributed over 27.52 lakh tonnes of rice and wheat, whereas the amount was 29.69 lakh tonnes in the same period of the previous year.

Supply-side disruptions, specifically the higher cost of production, have been identified as the primary drivers of inflationary pressure.