Will tariff cut boost import, reduce rice price?

The government’s move to tame the rice price through import remains elusive as the importers are reluctant to take the opportunity.

Government allowed private importers to import 10 lakh tonnes of rice at the beginning of the current fiscal year.

According to the data provided by the Quarantine Wing of the Department of Agricultural Extension (DAE), from July 3-August 28, private importers imported only 39,875 tonnes rice, though the importers obtained permission to import for 4.98 lakh tonnes from the government.

Bangladesh can meet only one meal from the rice imported so far in the current fiscal year. Bangladesh imported 9.87 lakh tonnes of rice in fiscal year 2021-2022, which is equal to 10 days demand.

Now, the government is trying to attract importers by further reduction of import duties.

On June 22 last, the regulatory body reduced the duty on rice import to 25 per cent from 62.5 per cent. In a recent gazette notification published by the Internal Resource Division of the finance ministry on August 28, the government reduced regulatory duty to 5 per cent from 25 per cent.

Along with the reduction of regulatory duty, government ordered withdrawal of all other types of duties on rice import. The government is now expecting more rice import in coming days as an importer has to pay only 5 per cent tax against the import price.

“The importers have to pay less duty on rice import now. The duty reduction will attract traders to import more rice,” Md Ismail Hossain, secretary to the food ministry, told The Business Post.

However, the importers still are not interested to import rice. Rice import can be profitable when dollar price will come down to TK100, they said.

Kazi Shujon, proprietor of Yarn Enterprise, said, “Purchasing price of per tonne of Indian Sharna rice is $405. On Monday, banks offered me dollar at Tk 108. At this rate, the price of per tonne rice will be Tk 43,740. Including the import cost, the price of per kg rice will reach at Tk 50.74. In this situation, there is a possibility of incurring loss.”

“If the dollar price reduces to Tk 100, the cost of per kg rice import will be reduced by Tk 3. If so, all the importers will be interested to import rice,” he presumed.

Govt to sale rice from September 1

Government is going to sale rice at a subsidised price at Tk 15 per kg from September 1. One crore family card holders of Trading Corporation of Bangladesh (TCB) will be given priority, but others also will be eligible for buying the rice. One person will be allowed to buy maximum 10 kg rice in a month.

In this regard, importer Sujon said, “Due to this move, the rice price will come down and no importer will be interested to import rice. However, if the dollar price comes down, importers will be interested to import rice.”

Commenting on the issue, former agriculture secretary Anwar Faruk said, “We source rice from India, Vietnam or other countries. In all cases import cost will be reduced due to the reduced duty which ultimately will reduce the price in local market.”

Indian ban on rice export

According to the Indian media outlets, the country has banned broken rice export amid less production this year. However, this Indian ban will not affect the Bangladeshi rice market as the country does not import the rice which India banned.

“India did not notify us about export ban. According to the media reports, the country has banned export of 100% broken white rice only,” said food secretary Ismail Hossain.

“We generally import 5% broken per boil rice. That is why we do not have to worry. However, if India bans export of rice which we import, it could be a concern for us. We are aware, and monitoring the situation,” he added. But importer Sujon said though India has not banned export of 5 per cent broken per boil rice, the importers are little bit worried about it.

“If the situation demands, India may ban export of 5 per cent and 25 per cent broken per boil rice. Importers are worried over the probable Indian ban on boiled rice export,” he said.