Tariff Commission recommends total removal of import duty on rice
The commission’s report notes that, due to a potential rice shortage, the government lowered the import duty from 62.5% to 25% on 20 October
The Bangladesh Trade and Tariff Commission has recommended the complete removal of the current 25% import duty on rice to enable lower-cost imports, citing high global rice prices.
According to the Ministry of Commerce, the recommendation was communicated to the National Board of Revenue (NBR) in a letter sent today (29 October), following an analysis of the international rice market.
The commission's report notes that, due to a potential rice shortage, the government lowered the import duty from 62.5% to 25% on 20 October.
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However, even with this duty, importing rice from Thailand will cost around Tk92-95 per kg, while rice from India will be priced at Tk75-78, which are higher than the current market prices for rice in the country.
In light of the situation, the commission stressed that removing the rice import duty is essential to facilitate imports and encourage importers.
The report further states that recent floods have disrupted rice production, warranting a complete withdrawal of the current import duty for a specific period to boost rice supply in the local market and stabilise prices.
The Department of Agricultural Extension's data, as quoted in the report, shows that heavy rains and upstream flooding caused two waves of floods between 16 August and 15 October, resulting in a production loss of approximately 839,000 tonnes of rice.
Due to this shortfall, rice prices in the domestic market have increased significantly compared to the same period last year, with fine rice up by 9.09%, medium-fine rice by 9.35%, and coarse rice by 7%.
Reuters' data shows that in the past month, Thai rice prices in the international market have decreased by 3.71-4.15% depending on quality, but still sell at $545-554 per tonne. Indian rice is comparatively cheaper, with a FOB (Free On Board) price of $450-470 per tonne. Despite this, the current 25% tax would push import costs above local market prices.
The Ministry of Commerce stated that the country's annual rice demand is approximately 3.7 to 3.9 crore tonnes.
