Despite duty exemption, only 30 per cent of rice approved by the government has been imported into the country so far, according to the official data from the food ministry.
Importers said due to high dollar value, increase in the price of rice in the international market and decrease in its price in the domestic market, they stopped importing rice fearing losses.
According to the food ministry officials, paddy production was less in the country during the Boro and Aus seasons last year. Department of Agricultural Extension fears that Aman production might also fall short of the target due to scanty rainfall.
Besides, the target set by the government to procure Boro paddy from internal sources was not met. So, the rice price increased significantly in the fiscal year 2022-23. In such situation, the government allowed import of rice by the private sector.
Import duty was reduced from 62.5 per cent to 15.25 per cent in two phases aiming to control the rice price in the domestic market.
Not only that, the time of rice import was extended till 31 December 2022. But 70 per cent of rice approved by the government was not imported into the country.
According to the Ministry of Food, the government approved import of 17.37 lakh tonnes of rice, including 13.84 lakh tonnes parboiled rice, last fiscal year.
A total of 467 importers were allowed to import rice. But private sector importers imported only 30 per cent or 5.16 lakh tonnes of rice, mostly from India.
Food ministry officials said a syndicate artificially increased the rice price by hoarding it even though there was an enough stock of rice in the country. Rice import was allowed to stabilise the rice market, they added.
Due to import, the rice price in the domestic market kept falling. At one stage, the rice price decreased in the domestic market more than import price. As a result, importers stopped importing rice due to fear of losses.
However, the importers said the main reasons for the decrease in rice imports are the high value of dollar and the rise in import prices.
Kazi Sujan, the owner of Yarn International, said there was a fluctuation in the dollar rate when rice import was approved last year. “After opening LC at Tk 100 per dollar, we had to pay Tk 107 at the time of payment. This has pushed up import costs.”
On the other hand, the rice price increased in the international market due to food crisis caused by Russia-Ukraine war. As a result, import costs have also increased.
But compared to that, the rice price dropped significantly in the local market. This is why most of the importers counted losses.
According to a report published by the United Nations Food and Agriculture Organization (FAO), at the beginning of April last year, the price of food products in the world was the highest since 1990. Food prices might rise further in April, FAO warned.
Another report released by FAO also mentioned that food prices were increasing rapidly in Bangladesh.
Earlier, US Department of Agriculture in its report said that in March last year, coarse rice price in Bangladesh was Tk 47.50 per kg, up 1.5 per cent from the previous year.
The average price of medium quality rice was Tk 66 per kg, up 5.6 per cent from the previous year.
According to the report, one of the reasons for the high price of rice was that many big companies started trading in rice. As they stockpile large quantities of rice, the price rises.
According to the Ministry of Agriculture (MoA), rice production was 3.76 crore tonnes in FY2021, up by 10 lakh tonnes compared to the previous fiscal year.
