Neighbouring countries are grabbing the aromatic rice market that Bangladesh has worked hard to establish asexports have been halted for the past yeardespite strong global demand for this grain.
The export ban has also affected small companies that were exporting rice-based products, reducing the number of export items and earnings for the country. According to traders, aromatic rice is a high-value product that could significantly boost export revenue.
There is potential for aromatic rice to be a notable export product under the "Made in Bangladesh" tag and the government needs to lift the export ban for this to happen, say traders. If the current situation persists, competing countries will dominate the market for aromatic rice that Bangladesh worked hard to create.
According to the Export Policy of commerce ministry, the export of rice from Bangladesh is prohibited. However, the commerce ministry had previously allowed the export of certain varieties of aromatic rice, including Kalijira, Chinigura, ChiniAtap and Kataribhog, with prior approval. These types of rice were exported to more than 130 countries, including the UAE, EU, US, UK, Malaysia and Singapore.
Bangladeshi expatriates are the primary buyers of this rice; it is also popular among expatriates from India, Pakistan and other countries.
On October 8, 2023, the Ministry of Agriculture and the Food Planning and Monitoring Committee (FPMC), chaired by the former food minister, decided to halt the export of all types of rice, including aromatic rice, due to concerns about the country's overall food situation.
Following this decision, the Ministry of Agriculture sent letters to the concerned institutions, including the Bangladesh Bank and the National Board of Revenue (NBR) to implement the ban.
Calls for lifting the ban
The Ministry of Commerce- responding to numerous requests from exporters- wrote to the ministries of food and agriculture two months ago seeking permission to resume exports. However, no approval has been granted.
Ministry of Commerce Joint Secretary (Exports-1 Division) NargisMurshida told The Business Post, "Since the export was stopped, we have received a large number of requests for re-authorisation. As the matter was closed on the recommendation of the ministries of agriculture and food, we forwarded the applications to them. However, they did not approve and is still banned.”
Ismail Hossain, secretary of the Ministry of Food said, "This is not solely a matter for the Ministry of Food; a decision should be taken in coordination with multiple ministries, including agriculture and commerce. We need to consider overall food stocks and rice production before making any decisions."
He further added, "If the export is allowed, the demand for aromatic rice will increase significantly, and farmers might start cultivating it on regular paddy fields. We need to consider whether this would impact overall rice production in the country."
Hossain mentioned that if the new government wishes to revisit this decision, the matter could be discussed at the next FPMC meeting in October.
Exporters’ concerns
Exporters argue that resuming aromatic rice exports will not affect the market for other types of rice, as the production and cultivation areas for aromatic rice are well-defined. Furthermore, a limited quantity of aromatic rice is approved for export.
Kamruzzaman Kamal, director of marketing at PRAN-RFL Group, a major stakeholder in Bangladesh's aromatic rice export, told The Business Post, "There is a huge demand for aromatic rice in the world market, but we are unable to meet this demand due to the export ban. If we cannot export our products in the long run, our market share will be taken over by others."
He added, "At the beginning of this year, I applied to the Ministry of Commerce for export approval, but I did not receive a positive response. Most of our rice exports come from contract farmers, and we were last permitted to export only 6,000 tonnes of this rice, but we could not export that either due to the ban."
“Aromatic rice is a high-value product; many small companies have created a market for many other products based on this product. Export of those products is also stopped due to the rice export shutdown,” he mentioned.
Rising production but limited exports
According to the agricultural ministry, the annual production of aromatic rice in the country is between 1.8 to 2 million tonnes.
Before the export ban, an average of 10,000 tonnes of aromatic rice was exported annually. A total of 41 companies had received export permits before the ban, but not all could export the amount that was allowed.
Bangladesh started exporting aromatic rice in the fiscal year 2009-10 while 663 tonnes of rice were exported in the first year. However, the export volume increased to 10,879 tonnes in fiscal year 2019-20.
According to the Export Promotion Bureau (EPB), aromatic rice exports were valued at $86 lakh in FY20, $85 lakh in FY21 and $51 lakh in FY22.
Although there are many varieties of aromatic rice in the country, the Ministry of Commerce has a specific list that can be exported.
This includes Kalijira, Kalijira TPL-62, Chinigura, ChiniAtap, Chini Kanai, Badshabhog, Kataribhog, Mohanbhog, Randhunipagal, Bashful, Jotabasful, Binnaful, Tulsimala, TulsiAtap, Tulsimoni, Modhumala, Khorma, SakkurKhorma, Nuniya, Poshushail, Dulabhog etc.
Analysts said that the ban on aromatic rice exports was implemented due to food security concerns, but rice production steadily increased over the past two years, and these concerns are no longer important. They argue that resuming aromatic rice exports would not significantly impact the food market.
According to the data from the Department of Agricultural Extension (DAE) and Bureau of Statistics (BBS), Boro paddy production in FY22 was 20.9 million tonnes, while it was 20.7 million tonnes in FY23, a decrease of 3.72 per cent. However, in the recently ended FY24, Boro paddy production increased by 8.21 per cent to 22.4 million tonnes.
