Rice imports are on course for a 32-year high this fiscal year on the back of insatiable demand from private traders for high prices in the local market.
As of February 9, imports of the grain stood at 28.90 lakh tonnes in contrast to 1.33 lakh tonnes brought in to the country in fiscal 2016-17, according to data from the food ministry.
Of the amount, private traders brought in 21.29 lakh tonnes and the government 7.61 lakh tonnes. The last time higher quantities of rice was imported was back in fiscal 1998-99, when 30.08 lakh tonnes arrived from abroad.
And as of January 27 this year, letters of credit have been opened to import 37.55 lakh tonne of rice.
The buoyancy in imports continues even though farmers are cultivating boro after harvesting aman paddy, the production of which is estimated by the US Department of Agriculture (USDA) to fall due to the three-day-long unseasonal heavy rain in December.
The US agency in a report last week raised its forecast on Bangladesh's rice import to 34 lakh tonnes of rice in 2017-18, which is more than double its earlier prediction of 16 lakh tonnes in November last year.
“The private importers are aggressively taking the maximum benefit of a 2 percent tariff rate,” said the USDA Foreign Agriculture Service in its January issue of the Grain and Feed Update on Bangladesh.
The report said private sector imports have soared due to higher prices in the local market amid fears of possible lower production in the next boro rice season because of flood risks.
“A record high amount of rice imports did not contribute significantly to retail rice price reductions in the local market,” the agency said. The report, citing Bangladesh Bank estimates, said rice imports from India cost Tk 37.89 ($0.46) each kilogram -- 19 percent less than the average retail prices of Tk 45 a kg in Dhaka.
The rice production estimate has been reduced slightly on account of lower aman production due to three-day-long unseasonal heavy rain in the harvesting month of December. “Some farmers reported that they had yield-loss due to 75 percent lodging during the grain maturing stage caused by heavy rains combined with high speed winds,” the USDA said.
Aman production estimate has been reduced to 1.25 crore tonnes. Last fiscal year, aman production was 1.36 crore tonnes, according to data from the Bangladesh Bureau of Statistics. As a result, Bangladesh's rice production may decline to 3.26 crore tonnes in the current year from the USDA's November prediction of 3.30 crore tonnes.
BBS is yet to release its estimates on aus and aman production this year.
The Department of Agricultural Extension of Bangladesh has targeted rice planting on 47.25 lakh hectares area during the current boro season to ensure production of 1.90 crore tonnes of rice this season.