In a desperate move to replenish the dried up food silos and boost rice supply in domestic market, the government has struck a deal with Cambodia to import 2.5 lakh tonnes of the staple in three months.
Under the Memorandum of Understanding (MoU) signed in the Cambodian capital Phnom Penh yesterday, the southeast Asian nation will actually provide up to 10 lakh tonnes rice in the next five years. A quarter of it will reach Bangladesh by October this year.
The import price could not be known immediately.
This is second such import deal in less than two months since the government approved import of 2.5 lakh tonnes of rice from Vietnam under a separate deal.
Besides, over the past two months, the Directorate General of Food, the state-run grain agency, floated seven international tenders seeking to import an additional 3.5 lakh tonnes of rice.
The moves come long after the crop loss in the March flashflood, which ravaged the backswamps in the country's northeastern region where 90 percent of standing Boro crops, totaling over 10 lakh tonnes, were damaged. Also, fungal attacks in at least 19 districts caused some crop loss in the last Boro season.
With the Cambodian deal signed, 8.5 lakh tonnes of rice is now lined up for import, which still falls short of a projected import need of 12 lakh tonnes.
A recent US Department of Agriculture projection, however, put the figure at 15 lakh tonnes in the current fiscal.
The food ministry's move also comes at a time when end-season rice stock in public granaries dropped to a six-year low and market price of coarse rice shot up to as high as Tk 48 a kg in June-July. This is a 47 percent rise from the price during the same period last year.
Despite government's import moves and increased imports by the private sector, the Trading Corporation of Bangladesh's market monitoring report shows that coarse rice price remained stationary at Tk 45 a kg for over a week since a Tk 3/kg-drop in the third week of July.
However, Commerce Minister Tofail Ahmed yesterday claimed rice prices declined by Tk 4 per kg following imports.
There is no doubt that a section of unscrupulous mill owners manipulated the supply shortage to make a hefty profit, he told reporters at the secretariat, adding that the government was taking action against those mill owners.
A five-strong government delegation led by Food Minister Qamrul Islam struck the deal with Cambodia. The Cambodian side was led by Cambodian Minister of Commerce Pan Sorasak.
The deal came little over a week after two more government-to-government (G2G) efforts to import rice fell through over price factor.
Before leaving Dhaka for Phnom Penh, a government delegation member, Badrul Hasan, told The Daily Star that Bangladesh could not sign import deals with India and Thailand as they asked for higher prices. Badrul heads the Directorate General of Food.
Official sources said the asking prices of Thailand and India were as high as $500 and $495 per tonne respectively.
The government had earlier agreed to offer Vietnam between $430 and $470 for each tonne of the 250,000 tonnes now in the import pipeline.
However, the government has so far got better deals for rice being procured through international tenders. It hovers around $420.
To stabilise the volatile rice market, in a rather late response, the government recently cut import duty on rice to 10 percent from a whooping 28 percent. Subsequently, private traders brought in over 1.5 lakh tonnes of rice from India in first one month of the current fiscal year. Private sector import of rice was as low as 1.3 lakh tonnes in the entire financial year of 2016-17.
Of the 2.5 lakh tonnes of rice from Vietnam, 93,000 tonnes reached Bangladesh till yesterday with a consignment of 20,000 tonnes more is scheduled to reach the Chittagong Port today.
Bangladesh, the world's fourth-largest rice producer, emerged as a major importer of the grain partly because of flashflood-induced crop loss and partly due to the exhaustion of food stock in the silos.
"We want to immediately purchase 200,000 tonnes of white rice [Atap] and 50,000 tonnes of parboiled [Shiddo] rice from Cambodia," Qamrul Islam told reporters after the signing ceremony.
The Cambodian commerce minister said that in the first phase, the Cambodian government's rice exporter Green Trade will deliver 250,000 tonnes of rice to the Bangladesh's Directorate General of Food by October, and the remaining 750,000 tonnes will be delivered in phases until 2022.
"This is one of the biggest rice deals Cambodia has signed with friendly countries," he said.
Cambodia produces about 9.3 million tonnes of rice a year with one-third of it to spare for export.