Govt shelves rice export plan amid rising prices

The government has shelved its plan to allow export of rice in the face of rising prices of the staple food, according to food ministry officials.
Big millers and traders also went for huge purchases to build stocks amid a speculation of late harvest and reduced production in the next season.
The prices of fine rice rose 5.81 percent to Tk 43-48 each kilogram in the last one month. Coarse rice prices advanced 5.17 percent to Tk 29-32 per kg, according to Department of Agricultural Marketing.
Wholesale rice prices also increased in the same period.
"We are observing the market price. Let's wait for the market to become stable," Food Minister Muhammad Abdur Razzaque told The Daily Star by phone.
He said Bangladesh is extremely vulnerable to natural disaster. A sudden natural calamity may affect production and cause the prices to go up.
Insiders said the food ministry proposed allowing rice export on a limited scale to bring buoyancy in the rice market so that farmers get better prices.
But the ministry took a go-slow stance on the proposal after the prices started to rise, ending a bear run of more than one year.
"It will not be wise to allow exports until prices become stable," said Ahmed Hossain, director general of Directorate General of Food.
Earlier, the food ministry framed a proposal of allowing rice exports due to surplus production. Currently only aromatic rice is allowed to be exported.
In fiscal 2011-2012, net production of rice was 28.6 million tonnes and consumption 28.5 million tonnes, according to Bangladesh Institute of Development Studies.
In the current fiscal 2012-13, output of aus rice fell 3 percent to 22.58 lakh tonnes due to reduced acreage, according to Bangladesh Bureau of Statistics (BBS).
Production estimates of aman, the second biggest crop, are not finalised yet. But an official of BBS said the immediate past aman output might be equivalent to last year's. KM Layek Ali, convener of Bangladesh Rice Mills Association, also said the aman season did not record bumper output.
He blamed the spiralling prices of rice on the cold wave and a huge paddy purchase by millers.
"The cold wave is over. But its impact still remains. Many millers face problem in drying," he said. "Farmers also lost interest in taking care of their paddy fields due to low prices of their produce in the last one year and the recent spike in petroleum prices."
"Millers also do not have enough stocks to continue milling until the beginning of the next harvest in April. That's why, they are buying," said Ali.
Nirod Boron Saha, president of an association of rice and paddy wholesalers in Naogaon, blamed the huge purchases on the speculation of a low production in the next boro season.
"There is a forecast among businesses that crop will come late this year as seedlings in many areas were affected by fog and cold injuries," he said.
"As yield may drop due to delayed plantation, big traders are buying in larger volumes. But farmers are supplying less than the demand," said Saha, explaining the reasons behind the recent price spike.
Farmers also kept aside a portion of their lands for wheat and mustard cultivation discouraged by the low prices of rice, he said.
Prices of both paddy and rice have increased by Tk 3-4 each kg in the last two-three weeks, said the trader in Naogaon, one of the main rice and paddy markets in the north.
"At this moment, the government should not allow rice exports," he said.