Rice prices up in int’l markets

To be increased further in Bangladesh: GEF

Farhad Chowdhury : The price of rice in the international market is now the highest in a decade and a half Neighboring India is the top exporter of rice. The price of rice is increasing there now.To deal with market instability, the country’s government is discouraging local traders from exporting rice. Various policy barriers including tariffs have been imposed. According to data from the Food Ministry’s Food Planning and Procurement Unit (FPMU) and Reuters, two weeks ago even the lowest-priced 5 percent coarse rice from India was exported at $526 per tonne. Last week it rose from a low of $533 to a high of $542.Currently it is being exported at a minimum of $537 to $546. Prices are higher in Thailand. Two weeks ago, rice was priced at $652 per ton for export from the country. Last week it suddenly rose to $665. At present, the market has slightly corrected and rice exports from the country are at a maximum of $658 per ton. According to local media in Vietnam, 5 percent broken rice is being exported from the country at $653 per ton. Due to the civil war, the import of rice from Myanmar, another major source of rice, to various countries including Bangladesh has been stopped.
According to the information published in the international press based on the analysis of the price list of the exporting countries, the price of rice in the world market is now the highest in almost a decade and a half. At this very moment, instability has appeared in the price of rice in the country’s market.
Although the government decided not to import rice at the beginning of the financial year, the Bangladesh government is planning to start importing rice again considering the local market situation.Initiatives have been taken to reduce duty on rice import.Meanwhile, the Food Ministry has written to the National Board of Revenue (NBR) seeking zero duty on the import of the country’s main food product. However, rice traders feel that it will not have much impact on the market.According to them, even if the duty is completely waived in response to this initiative, the import price of the product will be higher than the domestic market. The government had decided not to import rice at the beginning of the current financial year.However, the recent instability of the local rice market has forced the government to rethink this decision.It is planned to reduce the duty on import of rice.However, market watchers say that importing from the international market will cost more than the domestic market price of the country.
Apart from this, if the cost of transportation and accessories are taken into consideration, the cost of import will increase much more.In that case, there is a lot of doubt about how much role it can play in stabilizing the market.Rather, many have given the opinion that there is a danger that the market will become more unstable. Market experts say that the price of rice in the world market was low at the beginning of the last financial year.At that time, if some amount of rice was imported, it would have played a role in maintaining stability in the market.But since there is no import at all, they think that it has acted as an influence in the price of rice in the market. Bangladesh is the largest importer of 5 percent broken parboiled rice.About 73 percent of the country’s imported rice comes from India.From September 2022 to August last year, the country’s government has imposed restrictions on the export of the product.On September 9, 2022, the country imposed a ban on the export of broken rice.Then, in the context of price increase in the international market, the Indian government imposed a ban on the export of all types of non-basmati rice from July 20 last year.Besides, 20 percent duty was imposed on the export of boiled rice on August 5. The continuous decline in the exchange rate of taka against the dollar is increasing the pressure on traders to import rice.Bangladesh Bank has fixed the official exchange rate of dollar for inter-bank transactions at Tk 110.Accordingly, even after this, the price of rice fell to Tk 60.06 per kg.However, traders say that they have to pay more than Tk 120 for every dollar they buy at the import level.Taking this exchange rate into account, the import price of rice from neighboring India is Tk 65.52 per ton. The price of 5 percent broken parboiled rice from Thailand fell to $658 per tonne.At the exchange rate approved by Bangladesh Bank, the import price of rice from the country stands at Tk 72.38.And if the cost of collecting dollars of the importer from the banks is taken as Tk 120, the price per kg falls to Tk 78.96.Similarly, the import price of rice from Vietnam fell to Tk 71.83 per kg in dollars collected at the approved price.And at the exchange rate of Tk 120, only the import price of Vietnamese rice fell to Tk 78.36. 5 percent broken parboiled rice is medium category rice.This category of rice in the country includes Bri-28 and Payjam varieties of rice.According to the information of Trading Corporation of Bangladesh (TCB), these medium types of rice are currently being sold at Tk 52-56 per kg in the country’s market.Although Bri-28 and Pyjam are being sold in the market at Tk 56-58 per kg.Even if rice is imported from India at the approved exchange rate of the dollar, the import price alone is at least Tk 2 per kg more than the highest retail selling price in the domestic market.In terms of dollars collected in the curb market, the additional cost is about Tk 7.5 more than the highest price in the country’s retail market.If transportation and marketing costs are added, this cost will increase further, the traders said.And importing from Thailand or Vietnam will cost much more.
According to data from the World Bank’s regular monthly report (pinksheet), the average price of 5 percent broken rice in Thailand was $600 per ton in the July-September quarter of last fiscal year.Then it was $590 in October, $598 in November and $644 dollars in December.That is, only in December the price of the product increased by $46 per ton.Then it increased further in January. Talking to rice importers, it is known that Bangladesh imports the most parboiled rice.A few months ago, the price of rice was low in the international market.
But at that time rice import was not officially allowed.Now if you want to import rice, the import cost will be much higher than the market price. In this regard, Harunur Rashid, president of the importer group of Hili land port and rice importer, told, “Business should be simplified.”We will import by opening LC with Import Permit (IP).But with all such rules and regulations, import has to face many problems.Now the price of rice is increasing in the market.Time is critical.It is difficult to control the rice market with so many rules and regulations. The import duty of rice in the country is 62 percent.
Bangladesh has not yet imported any rice in the current financial year.However, when the rice market became unstable this month, the government withdrew from the decision not to import rice.The Prime Minister announced the reduction of duty on the import of four products, including rice, in the Cabinet meeting when the request for duty exemption was made from the Ministry of Food. Earlier on January 17, Food Minister Sadhan Chandra Majumdar told the media that an application has been made to NBR for import of rice at zero duty.Then he said that rice will be imported if the Prime Minister gives permission.
According to FPMU sources, only 12,000 tons of LCs have been opened for rice import till last December.Of this, four thousand tons of rice LC has been settled.And in 2022-23 fiscal year 10 lakh 56 thousand tons, in 2021-22 fiscal year 9 lakh 88 thousand tons, in 2020-21 fiscal year 13 lakh 59 thousand tons of rice is imported. On the condition of anonymity, an official of the Ministry of Food told, “The price of rice in the international market is available at a lower price than that in the domestic market.Even if you import rice from Vietnam or Thailand at zero duty, now you have to do it at a higher price.
Referring to the need to import some amount of rice at the beginning of the fiscal year, former Food Secretary Abdul Latif Mandal told, “There is no account of how much rice is in stock in the country now.”There is controversy over production and demand data.For this reason, it is now necessary to import to increase the supply.Now the price of rice is very high in the international market.At the beginning of the last financial year, some amount of rice was required to be imported.Then a lot of money would have been spent less.There is apprehension about the condition of the rice market at the end of next March.At least 3-4 lakh tons of rice should be imported by the government.
Again, the dollar crisis can also have a negative impact here. However, regarding the importation, the officials of the Ministry of Food said that the Amon season has only ended.In the meantime, various rice mills have bought paddy from the farmer.They have destabilized the market by hoarding paddy and rice.
According to the sources of the Ministry of Food, anti-rice hoarding operations are ongoing in various districts.Yesterday, anti-hoarding operations were carried out in different parts of the country, and around Tk 3 lakh 33 thousand were fined. At present, the rice stock in the country is about 14.5 million tons.However, at the beginning of the current financial year, that is, last July, the stock of rice was 17 lakh 60 thousand tons.Amon season paddy-rice collection is going on.According to the officials of the Ministry of Food, the collection of Amon season is ongoing.When the collection is over, the stock of food grains will be sufficient.
According to the sources of the Ministry of Food, at the beginning of the current Aman season, it was decided to buy two lakh tons of Aman rice, four lakh tons of boiled rice and one lakh tons of Atap rice.Although later it has been decided to collect two lakh tons of Aman rice.So far 19 thousand tons of paddy, 4 lakh 24 thousand tons of rice and 42 thousand tons of rice have been collected.This collection will continue till February 28.
Senior Assistant Secretary (Foreign Procurement) of the Ministry of Food, Muhammad Mahbubur Rahman told, “The supply of rice in the market is sufficient.But the price of rice has been increased at mill level.For this reason, if the import continues at zero duty, the price will be under control.Anyone can import it if they want.