Bangladesh : Rice import duty cut to near zero as local prices surge
Bangladesh has cut rice import duty from 63.25% to 2% to curb rising prices. The food ministry approved 242 traders to import 0.5 million tonnes, with customs clearing now in place. Retail rice prices, up 15–20% in two months, may drop Tk 3–4 per kg if imports start immediately.
The National Board of Revenue (NBR) has slashed rice import duty from the usual 63.25 per cent to nearly zero, requiring traders with Food Ministry approval to pay only a 2 per cent service charge and related costs, aiming to stabilise surging domestic prices.
On August 10, the food ministry allowed 242 traders to import 0.5 million tonnes of rice to stabilise domestic prices.
“Traders have already started opening letters of credit (L/Cs), and exporters have sent shipments to the border, but higher duties previously prevented importers from releasing rice from customs,” said Lalit Keshra, owner of M/S Sairam Enterprise in Dinajpur.
“Importing rice with a 63.25 per cent duty would push retail prices to Tk 90-95 per kg, which is not viable.”
Mr Lalit added that for the last four days, customs officials had informed traders that they had not yet received instructions from the NBR on the updated duty.
On Monday, Hilli customs officials confirmed that the duty now shows as 2 per cent in the system.
“Rice might enter from Tuesday if we pay the 2 per cent,” Lalit said. Prices of coarse and medium rice could fall by Tk 3-4 per kg if imports begin quickly.
Over the last two months, rice prices in Dhaka markets have jumped 15-20 per cent.
Coarse rice is now selling at Tk 56-60 per kg, medium quality at Tk 66-72, and finer varieties at Tk 78-95. The popular BRRI Dhan-28 variety is priced at Tk 66-68 per kg, up Tk 6-8 from two months ago.
Miniket or Jeerashail rice sells at Tk 82-90 per kg, while Najirshail ranges from Tk 85-95, depending on quality.
Prices began climbing soon after the June Boro harvest, mainly due to rising paddy prices in producing districts.
An NBR official said the duty cut follows requests from the Commerce and Food Ministries, similar to the June adjustment. A duty reduction last financial year allowed traders to import 1.2 million tonnes when the market was unstable after cyclones and floods. Despite record Boro production, government procurement, and stockpiling, recent price hikes occurred. The government now holds 2.1 million tonnes of rice in warehouses, an all-time high.
Professor Dr Rashidul Hasan, an agricultural economist, said easing imports is timely, as global rice prices are stable, making sourcing easier.
“It will help balance the market, but millers and importers should be monitored to ensure fair consumer prices,” he added.
Meanwhile, the food ministry also purchased a record 1.7 million tonnes of rice from domestic sources during the Boro season.
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Source : The Financial Express
