Govt cuts rice import duty to 25%

The government has cut the duty on rice imports to 25% from the existing 62.5% to stabilise the volatile market of the staple grain.

But, importers will be allowed to import a certain amount subject to approval – not at their own discretion.

The government is also going to import 4 lakh tonnes of rice to bolster food grain reserves, the food ministry said.

However, a study by the Bangladesh Rice Research Institute says there will be no shortage of rice until next June even if paddy production decreases by 10% owing to flooding. In fact, there will be a surplus of at least 3o tonnes of rice even after meeting the demand until June.

People concerned said this present situation in no way supports this logic because the government neither can procure paddy nor rice during this Aman season. That is the reason why it is to go for imports. At the same time, prices of rice are skyrocketing across the country, putting consumers in trouble.

To rein in prices of the staple food, the government reduced the duty and made it easier to import rice.

Earlier, severe floods in 2017 destroyed paddy fields in haor areas. At that time, rice prices also went up in the market. Hence, the government had to reduce the import duty to stable the market.

Food Minister Sadhan Chandra Majumder at a virtual conference on Sunday disclosed the government's decision to lower the import duty on rice.

The legal importers will have to apply to the food ministry with all necessary documents within 10 January for getting approval of the grain's import privately. Later, the ministry will give the go-ahead for importing a certain amount of rice after scrutinising the applications as per a policy, he added.

Sadhan Chandra also said they will give approval to the importers in a restricted manner so that rice more than required is not imported.

At the same time, the food minister said 4 lakh tonnes of rice will be imported under government-to-government and open bidding system.

"We have calculated that we have a stock of 30 lakh tonnes of rice. But, we need more to keep the market stable," the minister added.

Food Secretary Mosammat Nazmanara Khanum said, "Paddy production in the country has been 29 lakh tonnes more than the demand in the current fiscal year. We need to import the grain only to make a balance because we have to keep in mind consumers too."

According to the Trading Corporation of Bangladesh (TCB), coarse rice prices went up from Tk44-45 to Tk50 per kg over the last one month –47.69% more than what was a year ago.

Besides, medium quality rice is being sold at Tk58-60 per kg with a 14.14% hike, while prices of finer quality rose by Tk8.7% and is being sold at Tk62-65 per kg.

The sharp rise in rice prices during the Aman season has put extra pressure on consumers during the Covid-19 pandemic.

Moreover, farmers are not selling paddy to the government as prices of paddy are higher than what the government fixed for procurement. The government is not even able to buy rice from the millers at its announced prices.

According to the food ministry, the government has announced to procure 2 lakh tonnes of paddy at Tk26 per kg from farmers, 6 lakh tonnes of parboiled rice at Tk37 per kg and 50,000 tonnes of sundry rice at Tk36 per kg from millers.

According to sources, millers are not giving rice to government warehouses at the prices fixed by the government because of high paddy prices. As a result, the stock of food grains has reached the lowest point. 

According to the food ministry, the government currently has a stock of 7.46 lakh tonnes of food grains, including 5.42 lakh tonnes of rice and 2.04 lakh tonnes of wheat.

Md Layek Ali, general secretary of the Bangladesh Auto Major and Husking Mill Owners Association, said millers will lose at least Tk5 per kg if they give rice to the government by buying paddy at Tk37 per kg. If the government raises the price, we will be able to give rice to it."