Food grain imports surged to a four-year high of 52.69 lakh tonnes in the just concluded fiscal year owing to low prices of rice and wheat on the international market.
In fiscal 2013-14, cereal imports stood at 30.65 lakh tonnes, according to data from the food ministry.
Rice imports by private traders soared nearly four times last fiscal year to 14.9 lakh tonnes, while wheat imports rose 40 percent year-on-year to 37.79 lakh tonnes.
The private sector accounted for 91 percent of the wheat imports, the data showed.
The latest import figure was one of the highest in the last three decades. Such high imports were recorded earlier in fiscal 2010-11 and 1998-99, when 53.13 lakh tonnes and 54.91 lakh tonnes were brought in.
Wheat imports went up due to lower prices on the international market, said Abul Bashar Chowdhury, chairman of BSM Group, a Chittagong-based commodity importer.
The demand for wheat flour rises when its prices are lower than that of rice, he said.
Both the surging imports and higher domestic production have increased the supply of rice and wheat in the market, leading to a drop in prices -- a situation that benefits consumers but hurt growers.
Rice and wheat are now trading below last year's prices, according to traders and market price data compiled by government agencies.
The domestic glut of rice crops and high imports created a surplus in the market, so the demand remained lukewarm, said Md Layek Ali, general secretary of Bangladesh Auto, Major and Husking Mills Association.
Subsequently, paddy sold at prices much lower than the farmers' cost of production, he added.
Farmers bagged higher paddy in the immediate aman and boro crops, which accounted for over 90 percent of total annual rice production. Additionally, imports rose.
“Regular rice imports keep the demand for locally produced rice low. Most of the small millers are not buying paddy,” said Ali.
Though prices rose after the government imposed duty on rice imports, it could not discourage imports to a great extent, he added.
Depending on quality, paddy is trading between Tk 510 and Tk 730 each maund now, said Md Sajjad Ali, a farmer as well as a paddy trader at Naogaon, a rice-producing district in the northwest.
The current prices are lower than the prices of last year, he said.
To ensure fair prices for farmers, the government buys rice at Tk 32 per kilogram from millers and at Tk 22 per kilogram of paddy.
But the ongoing purchase of boro rice could not support farmers to recover their paddy production cost of Tk 20 per kilogram, according to farmers.
“Millers are not buying. Instead, many millers are supplying rice to the government warehouses by milling previously bought and stocked paddy.”
Apart from rice, wheat growers also suffer for falling prices due to soaring imports and higher domestic production in the immediate season.
The wheat production estimate is yet to be finalised, but the Department of Agricultural Extension forecasts that farmers harvested 14.83 lakh tonnes of the grain this year, up from last year's 13.02 lakh tonnes.
The private sector has stocked a huge amount of imported wheat due to lower prices in the international markets and that has affected prices, said SK Wazed Ali, owner of Lakhya Flour Industry.
Wheat is now trading at Tk 700-900 each maund, he said, adding that wheat prices were higher last year.
Though the quality of locally grown wheat is good, its overall prices have decreased because of increased imports, he said.
Each maund of locally grown wheat is selling between Tk 800 and Tk 850 at wholesale level, down from Tk 950 and Tk 1,150 last year, said Md Shohel Hossain, a wheat trader from Pabna, a northwest district.
The prices may fall after the end of the government's wheat procurement drive, he said.
“The supply of wheat is more than the demand due to the bumper production of the crop. So the prospect of price recovery in the near-term seems gloomy.”