Bangladesh Govt warned of rice shortage amid market instability
Bangladesh’s Home Ministry has warned of a potential rice shortfall due to rising dollar prices, floods, and market volatility. Traders have been blamed for hoarding, causing price hikes. Recommendations include strengthening market monitoring, increasing rice imports, and stockpiling supplies. Despite reducing import duties, only a fraction of the target rice imports have been completed.
The home ministry has warned the government about the possible shortfall of rice due to volatile global market, rising dollar price, soaring production cost and recent floods.
Exploiting the issues, unscrupulous traders is destabilising the rice market by hoarding it, adversely affecting the country’s consumers.
The ministry has conducted an investigation against the backdrop of a hike in rice prices by Tk 2 to Tk 4 per kg in the last two weeks.
They have placed a set of suggestions, including further strengthening the market monitoring activity. The FE has obtained a copy of the investigation report.
According to the report, increased price of rice and key essentials have been impacting the image of the government. The report has recommended overseeing and monitoring regular production and supply of rice at the mills and mokams, identifying dishonest millers and traders and taking action against them, allowing traders to import a fixed amount of rice and stockpiling sufficient food grain aiming to keep the supply and prices stable.
The ministry has suggested assessing the region-wise demand for rice, including increasing supervision against rumour and propaganda on the rice market.
Besides, it has called for operating regular mobile court by the authorities concerned including Directorate of National Consumer Rights Protection against unscrupulous millers, corporate traders, hoarders and middlemen.
The report has also blamed the authorised traders, as they are making delays in import with the connivance of other traders. They wait until market prices rise, boosting their profit margins but exacerbating supply shortages and price volatility.
The government has recently cut duty on rice import to tame inflation, but to no avail. It has given permission to import 1.5 million tonnes of rice, but only 15,000 tonne has been imported so far.
According to the state-run Trading Corporation of Bangladesh, prices of coarse rice have decreased by Tk 2 per kg in the last one month, but prices of medium and finer varieties of rice have increased by Tk 4 a kg.
Local rice traders claimed that there has been a fall in import of rice due to increased dollar price which have risen more than 39 per cent in the last two years.
They also said that the price of rice has gone up in the exporting countries. As a result, there has been no impact on the price of rice despite reduction in duty.
The tariff commission in its recent observation said the demand for rice is about 37 to 39 million tonnes while production is 40 million tonnes (BBS says it is 40.3 million tonnes in FY ’24).
In the middle of August, the country lost above 5.5 million hectares of Aman land and 1.0 million hectares of Aush land following the two rounds of devastating floods that damaged crops in the 23 districts in eastern and southeast regions.
The government has set a target to procure 0.35 million tonnes of Aman paddy at Tk 33 per kg for the fiscal year 2024-2025. Besides, it has set a target to collect 0.55 million tonnes of boiled rice and 0.1 million tonnes of Atap rice in the current fiscal from internal sources.
There is around 1.2 million tonnes of food grain including rice and wheat in the government silos.
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Source Link : The Financial Express
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