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Rice price in Bangladesh has remained at an elevated level despite higher imports in recent months on the back of lower customs duty and reduced price in the international market as well as a record stock in government warehouses.
The retail price of coarse rice, consumed by a majority of the population, rose to Tk 44 to Tk 48 per kg on November 11, up from Tk 42.63 in May, according to the Department of Agricultural Marketing.
The higher price of the staple food came at a time when the harvesting of Aman, the second-largest paddy crop in the country, is underway.
Between July and November 10 in the current fiscal year, 7.73 lakh tonnes of rice were imported, compared to zero imports in the same period last fiscal year, according to data from the food ministry.
Of the quantity, 4.94 lakh tonnes were brought in by the government and 2.79 lakh tonnes by the private sector to meet the growing demand.
Although no imports took place between July and October in 2020-21, the scenario changed in the subsequent months because of the depletion of the food stock at state-run warehouses and a high price of the item in domestic markets.
The situation prompted the government to cut the import duty to 25 per cent from 62.5 per cent to encourage imports. As a result, rice imports went up to 13.59 lakh tonnes at the end of the last fiscal year.
The government has initiated moves to import rice under state-to-state agreements. It signed deals with supplying nations to buy 12.50 lakh tonnes of rice between 2020-21 and 2021-22. It purchased 10.66 lakh tonnes of rice between January and November. Towards the end of the last fiscal year, the food ministry permitted 320 private companies to import 15.61 lakh tonnes of rice. Another 415 private firms obtained consent to buy 16.93 lakh tonnes of rice in FY22, food ministry documents showed.
As of November 10, the private sector imported 10.65 lakh tonnes of rice.
Chitta Majumder, managing director of Majumder Group of Industries, attributed the gap between demand and supply as well as the reduction in the import duty for the increase in imports.
“However, the import will come down because of the reinstatement of the previous 62.5 per cent duty in October.
Many private importers have already canceled LCs.”
Between July and October, letters of credit (LCs) were opened to import 7.97 lakh tonnes of rice, said a senior official of the food ministry.
Majumder said the import cost of rice was Tk 40 per kilogramme (kg), but it would go up in the local market due to the reinstatement of the higher duty.
Food Secretary Mosammat Nazmanara Khanum said: “The reasons for the increase in the price of rice can’t be pinpointed precisely. Imports have gone up but not as much given the number of approvals given.”
She said the import duty was brought to the previous level to help farmers get fair prices. “If the prices go up, we will think about lowering the import duty again.”
The higher import came as the price has declined in key exporting nations. For instance, rice was sold at $381 per tonne in October in Thailand, down from $451 in the same month last year.
During the period, it fell to $359 per tonne from $369 in India, and from $526 to $445 in Myanmar.
In Bangladesh, the production of paddy also rose.
The production of Boro, the largest crop in Bangladesh, was up 1.2 per cent at 1.99 crore tonnes in the last fiscal year.
The higher import of rice and the robust public procurement of boro rice sent the stock of the staple in state warehouses to a new high.
On October 10, state warehouses had a rice stock of 13.70 lakh tonnes, way higher than the 8.2 lakh tonnes recorded on the same day last year, food ministry data showed.
The stock of food, consisting of rice and wheat, jumped to 15.26 lakh tonnes on November 10, up from 8 lakh tonnes in January.
(TDS)
