Rice getting costlier despite duty cut

Rice continues to get costlier in the domestic markets despite the government allowing private imports and more than halving the import duty to improve food security.

The Food Ministry started allowing rice imports on June 27. As of July 13, 329 traders were granted permission to import 0.906 million tonnes of rice at a 25 per cent duty.

According to ministry sources, 1,000 tonnes of rice have already been brought in through Bhomra, Hili, and other land ports, and the volume is expected to increase from Sunday.

In the meantime, rice prices, however, continue to rise in the domestic market.

Over the past two weeks, the retail price of various types of rice, including Nazirshail, Miniket, BR 28, and Paijam, has gone up by Tk 2–3 per kg in different markets, including those in Dhaka city.

It now costs Tk 72–74 per kg to buy normal quality Nazirshail rice, Tk 66–72 for Miniket, and Tk 50-52 for a kg of BR 28 and Paijam.

Alamgir Hossain, a rice trader in the capital’s Maniknagar market, said that he had not seen any imported rice in the market yet. “So, I don’t see any indications of a decline in rice prices. Contrarily, compared to two weeks ago, almost all types of rice now cost Tk 2-3 more per kg.”

Traders attributed the rising prices to slow rice imports, which was reportedly happening because of a number of factors, including various import conditions, rising import source prices, and higher duty rates.

Last year, over four hundred traders got permits to bring 1.79 million tonnes of rice, but they could import only 0.305 million tonnes, though the duty was only 15 per cent then.

Many importers say that conditions—from LC opening to bringing rice within a time limit, introducing a ‘permit’ system for limited importers—might lead to insufficient imports like that of last year.

When asked, Bangladesh Rice Merchants Association Vice-President Kauser Azam told The Business Post that even with imports, there is no possibility of a decline in rice prices. “Because the prices in the import sources are high, the traders are now adjusting the prices.”

Saidul Hasan, a private importer from Khulna, said that they were not able to reduce the cost of rice due to the high price of the dollar and the high import duty in the country. “There is a high possibility of loss by bringing rice into the country at this price.”