Syndicated traders are creating a fake crisis of essentials in the market while the country does not have any shortage in production, import and supply, commerce ministry data show.
Coronavirus fear-induced panic buying is also helping them raise prices of grocery items.
Prices of most grocery items, including rice, onion, soybean oil, sugar and lentil, were soaring in Dhaka in the wake of the number of Covid-19 patients in Bangladesh rising to 27 on Sunday with two confirmed fatalities.
The traders are overcharging the customers, who are loading up on essentials. Rice market is the worst victim of panic buying, with the staple price increasing by Tk5-10 per kg in a week.
Rice wholesalers and millers are playing the blame game, which is edging up rice prices with no sign of stopping.
Rice wholesaler in Karwan Bazar Ariful Islam said the millers have slashed rice supply and are overcharging for the staple.
"This is responsible for the price hike," he said.
The millers claimed they are charging more for rice as they had to pay more to buy paddy from middlemen.
They said most farmers do not have paddy in stock as the Aman harvesting season is over.
"Hike in paddy price is the main reason for the surge in rice price," says Layek Ali, general secretary of the Bangladesh Auto Major and Husking Mill Owners Association.
Food ministry Secretary Mosammat Nazmanara Khanum, however, categorically dismissed the claim. She said the millers bought paddy two months ago from the farmers.
"Therefore, there is no reason to consider the claim that the millers are now purchasing paddy at a hiked rate," added the secretary.
She warned stern action against dishonest millers and said a number of food ministry teams are looking into the matter.
According to the commerce ministry, the government has a stock of essentials nearly 40 percent more than the previous year. State-owned Trading Corporation of Bangladesh has enhanced its capacity for open market sale.
Seven teams of the Directorate of National Consumer Rights Protection are regularly monitoring markets to bring down grocery prices.
The directorate is also fining traders every day for overpricing.
Kitchen market analysis shows onion price started dropping from mid-March, owing to India's lift on ban and arrival of local onion in market.
Price of onion bulb edged down to Tk40-45 per kilogramme for a brief period and surged again to Tk80 a kg riding on the coronavirus fear.
Prices of other grocery items – from ginger to soybean oil – followed onion's lead.