Rice import plan receives tepid response
The government initiative to import rice from different sources to beef up the stock and keep the prices stable is yet to see any significant progress.
Since June, the food ministry has given permission to 320 private entities to import 13.40 lakh tonnes of rice at a reduced duty to rein in the prices in the local market.
Importers, however, opened Letters of Credit for bringing around three lakh tonnes of rice till September 29, the deadline for opening LCs, Md Ismiel Hossain, secretary at the food ministry, told The Daily Star yesterday.
Private firms imported only 1.39 lakh tonnes of rice till October 2, shows the food ministry data.
Those who have opened LCs must bring the consignments of rice from abroad and supply those to the local market by December 31, according to the conditions set by the ministry.
The process of importing around 5.30 lakh tonnes of rice from India, Myanmar, Vietnam and Thailand through government-to-government (G2G) arrangements is still underway.
According to a food ministry official, only 30,000 tonnes of rice from India have so far arrived at the Chattogram port.
The government decided to allow private firms to import rice in June at a reduced duty after the prices of different varieties of the staple rose by 5-15 percent in the local market since May.
The price spiral put the consumers, already struggling to cope up with rising prices of other essentials, in a tight spot.
To encourage rice imports, the government slashed the import duty to 25 percent from 62.5 percent in June and then to 15 percent in August.
Officials said rice production has been hampered this year due to floods and also forless-than-normal rainfall.
Aush yield was around seven lakh tonnes lower than the target of 27 lakh tonnes this season. Moreover, the production of Boro, the biggest crop, was also hit hard by flashfloods.
The Department of Agricultural Extension fears Aman yields may also fall short of the target because of less rain this year.
Talking to this newspaper, Md Shahjahan Kabir, director general of Bangladesh Rice Research Institute, said the annual demand for rice for human and nonhuman consumption is around 3.5 crore tonnes, and the country produces more than 3.7 crore tonnes a year.
In reply to a query, he said the government allows rice import to contain price spiral in the domestic market.
According to the food ministry, the government had a stock of 17.5 lakh tonnes of rice in August, which dropped to 15.17 lakh tonnes on October 2. A stock of 12 lakh tonnes is considered safe in terms of tackling any food emergency.
Against this backdrop, the government moved to import rice through G2G arrangements and also private entities.
Chitta Majumder, proprietor of Majumder Traders, a leading rice importer, said the government's sale of rice at subsidised prices through OMS and other food distribution channels and also strict measures against hoarding could be the reasons for low import of rice.
"We would buy rice from India at Tk 48 a kg and sell it at Tk 49. But now we have to sell it at Tk 46 as the price has come down in the domestic market," he claimed.
Several other importers said India recently imposed export duty up to 20 percent on various types of rice, including Atap. This pushed up the costs of rice import from India.
Though traders are allowed to import rice from any country, they prefer India, the world's largest rice exporter, for low price of the staple there and also low transportation costs, they mentioned.
Officials said the low volume of import by private entities would not create any problems in the domestic market, as the country still has a very good stock, and the Aman harvest will begin next month.
"This will have no impact on the local rice market. The market will become more stable once the Aman crop hits the market. There is no reason to panic or get worried," said the food secretary.
Ismiel also said the government was considering extending the deadline for opening LCs for rice import by private entities.
Besides, he said, the government plans to import another three to four lakh tonnes of rice from various sources.
Asked about rice import under G2G arrangements, Raihanul Kabir, director of the Directorate of Food, said several consignments of rice will arrive this month and the rest by December.
He, however, didn't give any details.
Officials said the government has already opened LCs to import one lakh tonnes of rice from India.
"A consignment of 30,000 tonnes of rice has already reached Chattogram port. It will be unloaded soon," said an official of the Directorate of Food, seeking anonymity.
The official said the government has also opened LCs to import two lakh tonnes of rice from Myanmar. The first consignment of 30,000 tonnes will arrive by this month and the rest in phases by December.
Apart from these, the government has already signed an agreement with Vietnam to import 2.30 lakh tonnes of rice, including 30,000 tonnes of Atap rice.
"An LC has been opened to bring the consignment of Atap rice, which is expected to arrive by this month. The government is yet to open LCs to import the rest of the rice," said the official.