Bangladesh halts buying overpriced Indian rice
The food ministry has decided to suspend the process of buying overpriced rice from two state-run agencies in India, considering the overall situation.
The decision came at a meeting of the ministry on Sunday. Bangladesh was supposed to buy a total of 200,000 tonnes of rice from India’s National Cooperative Consumer Federation (NCCF) and Kendriya Bhandar (central food storage).
However, sources said the government backtracked from the import bid due to the recent price drop in India in January, good domestic production, and adequate rice stock in state warehouses. It also took the issue of saving greenbacks into consideration.
Food secretary Ismail Hossain told Prothom Alo that the government is not importing rice from the two state-run agencies in India for the time being. But it will resume the import process if necessary.
The directorate general of food issued a letter of intent (LoI) to the two Indian sellers on 21 December. The sellers also fixed rice prices at USD 434 and USD 437 per tonne and initiated the process of export.
Meanwhile, the food directorate floated an international tender to purchase another 100,000 tonnes of rice. Two companies – Singapore-based Agro Crop International and India-based Bagadiya – offered 50,000 tonnes of rice each at USD 393 and USD 397 per tonne respectively. The rate is lower by roughly USD 40 than the two Indian sellers.
Later, Prothom Alo published a report on the issue on 11 January, titled as “Bangladesh to buy rice from Indian govt traders at higher rate.”
According to sources, the food ministry had requested the two state-run agencies of India to reduce prices. In response, they conceded to slash the price by USD 2 per tonne. Bangladesh in the meantime registered a rise in the procurement of Aman rice from local sources.
The amount of rice procured in Aman season was estimated at 291,000 tonnes on Sunday, which pushed up the overall rice stock in the government warehouses to 1580,000 tonnes.
Different sectors, including the social safety programmes, require 250,000 to 300,000 tonnes per month and the government has at least five months of rice stock as per the estimation.
Also, the harvesting of Boro crops would start here shortly.
Meanwhile, the government is consistently discouraging imports due to the dollar crunch. The central bank estimated its forex reserve at USD 32 billion recently.
Considering all these issues, the government has halted importing rice from the two state-run agencies of India.
According to the trading corporation of Bangladesh (TCB), the minimum price of fine rice in the Dhaka market rose by Tk 2 to Tk 60 per kg in the last week. Its maximum price is Tk 75. The maximum price of coarse rice dropped by Tk 2 to Tk 50 while its minimum price is Tk 46 per kg.
Different initiatives, including imports, have apparently failed to bring down the rice price.
MM Shaukat Ali, former advisor of caretaker government, said the price is usually verified through tenders before buying rice from another government. But the reverse happened in the case of purchasing rice from India. The government should look into the matter.