Amid growing unrest over the upward trend of prices of essentials, the government has planned to procure 500,000 tonnes of rice through open tender by December 31, 2024 with a view stabilizing the rice market in Bangladesh, sources said.

The government stock of rice has dropped to less than one million in October, 2024 increasing social insecurity as Bangladesh is major consumer of rice.

The price of one tonne of boiled rice in the international market recorded at around 554 US dollars on October 28, 2024 as compared to 578 US dollars one month and 623 US dollars one year back, according to the Bangladesh Trade and Tariff Commission (BTTC).

The price of rice is around 11 per cent lower as of October 28, 2024 compared to one year back and 4.00 per cent lower compared one month back. But the devaluation of taka against the US dollar and the still high tariff on rice are discouraging importers to import rice as the local price of rice is less compared to imported rice. However, sources said the government is committed to import rice, even at high cost, to stabilize the market and distribute the rice through Trading Corporation of Bangladesh (TCB) and open market sale (OMS) programmes among the poor and low income group consumers.   

The tax on rice import was 62.5 per cent that NBR in recent times reduced to 25 per cent. However, the price of one kg rice will be around over 82 taka if 25 per cent tax is imposed at the import level.      

Earlier on October 20, the NBR reduced the import duty on rice to 25 percent from 62.5 percent to encourage imports and increase supply in the local markets.

The NBR said that the duty cut would help lower the import cost by Tk 14.4 per kilogramme.

However, after the duty cut, the importers ordered the import of only 26 tonnes of rice so far, the BTTC report mentioned.

Amid this situation, necessary rice imports will only be encouraged if the duties are exempted as part of efforts to stabilise the market prices, the BTTC report said.

The report also said that local producers are unlikely to suffer if rice is imported at the price of the international markets, which will keep the price of imported rice above the price of the locally grown rice.

Bangladesh annually needs about 3.7 to 3.9 crore tonnes of rice, most of which are met through domestic production.

The Bangladesh Trade and Tariff Commission (BTTC) has requested the government to temporarily withdraw import duty on rice to increase the supply and, in turn, contain the price of this staple food in the local markets.

To this end, the BTTC sent a report to the commerce ministry, food ministry, and the National Board of Revenue (NBR) recently.

According to Bangladesh Bureau of Statistics, food inflation has remained above 10 percent for six consecutive months since April this year.

Although the price of fine rice remained unchanged over the last month, medium and coarse varieties, which are consumed the most, saw a 1.74 percent and 1.9 percent increase, respectively, over the same period, said the BTTC report.

A reason for the increase can be attributed to the back-to-back floods and inclement weather that have caused damage to standing paddy crops across the country.

According to data from the Department of Agricultural Extension, two recent floods between August 16 to October 15 have disrupted the production of 8.39 lakh tonnes of rice.

The price of rice is increasing in the market, and more concerning is that recent heavy rains and flash floods from upstream countries, including India, have damaged Aman rice plantations. The estimated production loss is likely to be around about 839,000 tonnes.

 The Bangladesh Trade and Tariff Commission (BTTC), an organisation under the commerce ministry, analysed the situation and reported to the government that all duty and taxes should be removed to increase rice imports.

Rice is a sensitive commodity for the government, as a significant portion of the food expenditure of low-income families goes toward it. The price of rice is increasing at a time when the costs of almost all daily commodities—including edible oil, sugar, vegetables, eggs, and chicken—are also high.

Aman rice is the second major crop in Bangladesh. According to data from the Bangladesh Bureau of Statistics (BBS), the country produces about 40 million tonnes of rice annually, with approximately 15 million tonnes coming from the Aman season. Aman rice is likely to begin hitting the market in about three weeks.

Sources said the government is committed to import half a million tonnes of rice by December 31 through different sources to contain unrest and stabilize the market.

The tender process of importing rice  is expected to be completed  by November 4, 2024 as the government realizes the deep sense of politics over rice issue, sources said    

As of June 2024, the closing stock of food grains in Bangladesh was 1.47 million metric tons (MMT), which is in line with government standards. The government's strategic food reserve helps to stabilize prices, support emergency preparedness, and sustain public welfare programs.

The US Department of Agriculture (USDA) predicts that rice acreage in Bangladesh will be 1.15 crore hectares in the 2024-25 marketing year, which is 3.4% lower than their previous forecast. This is due to recent floods that may affect the paddy of the Aus and Aman seasons.

The rice market in Bangladesh is expected to grow annually by 9% from 2024–2028. The average volume per person in the rice market is expected to be 61.6 kg in 2024.

In the third quarter of the fiscal year, the wholesale price of rice increased by 0.96%, while the real price of rice decreased by 0.70% when considering inflation. At the retail level, rice prices rose by 2%.

Prices of different varieties of rice in the local market have risen as two successive deluges have hit the rice production curtailing the availability of the product in the market.

The present interim government of Professor Dr Mohammed Yunus has been under tremendous pressure as prices of essential goods have marked a steep rise in the market.

Poor and low income consumers in the country are struggling to survive   as real income of consumers has drooped in recent times.

The neighboring India is the best source of importing rice as price is usually the most competitive in the in India.

Bangladesh imported rice worth 1.1 million US dollars during July-August period. However, sources said Bangladesh will have to spend 250-260 million US dollars to stabilize rice market.

Though political tension between Bangladesh and India has increased after the ouster of dictator Sheikh  Hasina on August 5, 2024, Dhaka should explore and import rice within the shortest possible time    

India had the highest export volume of rice worldwide, at 16.5 million metric tons as of 2023/2024. Thailand was the second largest rice exporter, with about 8.2 million metric tons of rice worldwide in that year.

In the last few years, the global rice supply amounted to over 700 million metric tons of milled equivalent each year. The production of milled rice was projected to amount to almost 503 million metric tons worldwide in 2023. Among the many varieties of rice, U.S. California medium-grain rice had the highest export price and India 25% rice the lowest average export price per ton in 2022.

Between 2008 and 2022, global rice consumption increased by over 80 million metric tons, from 437 million metric tons to around 520 million metric tons. In 2022/2023, the top three countries for rice consumption were China, India, and Bangladesh. That year, about 155 million metric tons of rice were consumed in China.

Meanwhile, earlier last year, Bangladesh in October 2024 set a target of producing more than 4 crore tonnes of rice in a fiscal year (FY) thanks to increasing yields of the most grown crop, according to official data.

Local farmers have been gradually switching to high-yielding and hybrid varieties of the cereal grain, bringing the country's need for rice imports down to zero.

Estimates by the Bangladesh Bureau of Statistics (BBS) show that farmers bagged 4.06 crore tonnes of rice in FY 2023-24, up by 4.1 percent year-on-year in what was the highest growth in six years.

The largest growth in yields came from Aman paddy, which was harvested in the previous winter ahead of Boro paddy in the dry season. Boro is the principal rice crop in Bangladesh.

Farmers got about 2.10 crore tonnes of rice through the Boro harvest in the May-June period early this calendar year.

FY24 marked the fifth year of a consistent rise in rice production with Wais Kabir, a former executive chairman of the Bangladesh Agricultural Research Council, linking the spike to yield enhancement.

"One of the main factors is that farmers have shifted to cultivating modern varieties of rice. They are growing more high-yielding and hybrid varieties. The acreage has also risen over time," he said.

Jahangir Alam, an agricultural economist, said increased rice production cut import of the cereal grain.

"We did not have to import any rice [in FY24]. Besides, this did not have much of an impact on prices as it seems public and private stocks were adequate," Kabir added.

Data from the food ministry shows that Bangladesh imported 10.56 lakh tonnes of rice in FY23 compared to zero public and private imports as of October 7 this year.

Kabir also said one of the reasons behind the zero rice imports was a surge in wheat imports.

The use of wheat by bakery and food processing industries as well as animal feed has increased. This contributed to the reduced requirement for rice, he added.

Imports of wheat, the second most consumed cereal grain after rice, soared 71 percent year-on-year to 66 lakh tonnes in FY24.

M Asaduzzman, a professorial fellow at the Bangladesh Institute of Development Studies expressed doubt over the rice production estimate.

He questioned why prices have gone up if supply was indeed adequate.

"Production has not risen as much as reported. Higher prices mean there is a supply shortage," he said, adding that rice accounts for a good portion of food inflation, which was high in the previous fiscal.

The BBS said food inflation rose to 10.65 percent in FY24 from 8.71 percent the year prior.

The price of coarse rice, the cheapest variety, was 7.00 per cent higher year-on-year at Tk 50 to Tk 55 per kilogramme in Dhaka yesterday.

Asaduzzman informed that recurrent floods this year have raised concerns over the cultivation of Aman.

"We will have to import rice if Aman production suffers. And that will be clear at the beginning of November. So, the government should take a decision regarding imports next month," he said.

By the end of August, the US Department of Agriculture (USDA) said Aus and Aman rice acreage and production in Bangladesh might decline because of the floods, particularly the devastating deluge in the eastern part of the country.

Estimates by the Department of Agricultural Extension show that Aman acreage declined to 57.35 lakh hectares this season from 57.5 lakh hectares previously.

Agricultural economist Alam said the overall Aman rice output may be 1.55 crore tonnes to 1.60 crore tonnes this year.

"Farmers had to transplant the seedlings late because of floods. This may cause lower yields," he said while adding that imports might not be needed as stocks of the grains are favourable.

"But the next Boro rice crop is crucial," he said. "We will not need to worry about food security of the staple grain if we can ensure production inputs, mainly fertiliser, at the doorsteps of farmers."

Kabir said the ongoing flood in the Sherpur-Netrokona districts will damage the Aman crop in the fields and it cannot be recovered.

"So, whether we will need to import or not will depend on the next Aman harvest. And the output of the upcoming Boro would depend largely on the management of fertiliser by the government."

"The interim government has to ensure proper management of fertiliser to ensure a good harvest of Boro rice," he added.

Meanwhile, with late arriving monsoon rains in Bangladesh, rice production forecasts have been lowered and imports are projected to rise in the 2023-24 marketing year, according to a Global Agricultural Information Network report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture in August, 2023

Imports are revised upward from the FAS previous forecast from 900,000 to 1 million tonnes. If realized, it would still be lower than the 1.2 million tonnes imported in 2022-23.

The anticipated increased intake is due to the FAS forecasting a slight reduction in harvested area and production in 2023-24, at 11.6 million hectares and 36.4 million tonnes. Both figures were revised downward by about 1.6%.

Bangladesh was the world’s third-largest milled rice producer in 2022-23 behind China and India.

Although India recently banned the export of non-basmati white rice, the FAS believes the impact will be minimal even though Bangladesh relied on India for 71% of its rice imports a year ago.

“Bangladesh imports very little white rice from India due to low demand for this type of rice,” the FAS said. “Usually, Bangladesh imports parboiled rice from India in large quantities.”

India has not banned exports of parboiled rice.

Two successive deluges  have caused damage to the production of crops, particularly of rice in the market, causing price hike of the commodity.

Sources said the Bangladesh Bureau of Statistics (BBS) has been politicized during the last 15 years making preparation of a proper planning  difficult.

Though price of per tonne boiled rice has dropped 10-11 per cent in the international market compared to one year back.

Meanwhile,  The deluge in south-east and other parts has devastated the key staple rice and other crops in 23 districts, damaging 1.0-million tonnes of produce worth Tk 34 billion so far.

Agriculture ministry in its primary projection, released on Friday night, said 1.43-million hectares of land were brought under farming in the districts affected by flash flood, coupled with days of driving rain.

A total of 0.372-million hectares, or more than 26 per cent of the total standing crops, have been inundated in the districts.

According to the report, crops on 0.21-million hectares might witness complete damage. However, more than 0.3-million hectares of standing Aus and Aman crops have witnessed partial to total damage.

The another blow from the flood, caused mainly by the opening of sluice gates in upstream river dams in India, also hit hard Aman seedbeds on 20,600 hectares. Of them, 14,000 hectares might witness total damage.

Apart from rice, vegetables also witnessed a blow as 11,290 hectares might experience total damage, said the ministry.

The farmers have banana and other fruit gardens on 38,091 hectares of which above 12,414 hectares are ravaged by floodwaters.

Ginger, turmeric, sugarcane, green chilli, tomato, papaya and eddo crops also witnessed severe damage.

The projection estimates losses worth Tk 33.5 billion in the crop sector so far.

When asked, Md Tajul Islam Patwary, director general of the Department of Agricultural Extension (DAE), said water was receding in many districts.

Primary estimates would be reviewed after getting more reports from the areas, which were out of contacts, he added.

The DAE is working to source Aman seedlings for farmers from different areas as water has receded from crop fields.

In another development, the death toll from the floods in 11 south-east districts has climbed to 59, with five more deaths reported on Saturday, according to the latest briefing of the disaster management and relief ministry.

Of the fresh fatalities, four were from Feni and one from Noakhali.

The mounting death toll now includes 23 in Feni, 14 in Cumilla, nine in Noakhali, six in Chattogram, three in Cox's Bazar, and one each in Brahmanbaria, Khagrachhari, Moulvibazar and Laxmipur.

In total, 0.696-million families are still stranded across 68 upazilas in Feni, Cumilla, Chattogram, Khagrachhari, Noakhali, Moulvibazar, Habiganj, Brahmanbaria, Sylhet, Laxmipur and Cox's Bazar, impacting 5.45-million people in 504 municipalities and unions.

The ministry reported a stable situation in Chattogram, Habiganj, Sylhet, Cox's Bazar and Khagrachhari, while improvement has been noted in Moulvibazar, Brahmanbaria, Cumilla, Feni, Noakhali and Laxmipur districts.

As of now, 0.393-million people have sought refuge in 3,928 shelter centres, with 36,139 domestic animals also housed there.

A total of 519 medical teams have been deployed to provide healthcare services in flood-hit areas.

The government has supplied Tk 45.2 million to districts for faster recovery.

Additionally, 20,650 tonnes of rice and 15,000 packets of dry and other food items like baby food and fodder worth Tk 7.0 million have been distributed.

With flood waters receding in some areas and road communication starting to improve, evacuees are beginning to return home.

The authorities have been instructed to take necessary steps to prevent the outbreak of waterborne diseases following the retreat of floodwaters.

Meanwhile, the flood forecasting and warning centre on Saturday reported that all major rivers across the country were flowing below danger level.

Water level in the Brahmaputra-Jamuna river system is decreasing. The Ganges-Padma rivers remain stable, a trend expected to persist for the next 48 hours.

In the northern region, rivers like Teesta, Dharla and Dudhkumar are also receding and likely to maintain their normal flow during this period.

Major rivers in north-eastern and eastern parts are experiencing a fall in water levels.

The Met office forecast no massive rainfall in these areas or adjacent uplands over the next two days, expecting to further lower the levels of Surma, Kushiyara, Manu, Khoai, Feni, Muhuri, Gomti and Titas rivers.

In the south-eastern region, rivers like the Sangu, Matamuhuri, Karnaphuli and Halda are also witnessing decreasing water levels, with no heavy rainfall predicted for the next 48 hours.

In response to the stagnant import activity, the Ministry of Food is set to request a further reduction of the import tariff to 5%. Officials plan to quickly submit a proposal letter to the National Board of Revenue (NBR) aimed at making tariffs more manageable and facilitating private imports.

Md Moniruzzaman, director of the Procurement Division of the Directorate General of Food, said, "Since rice imports are not happening despite the reduced tariffs, a proposal is being made to the NBR to further decrease it to 5% to ease private imports."

In addition to promoting private imports, the food ministry is moving forward with plans to import 5 lakh tonnes of rice and 7 lakh tonnes of wheat through government channels.

Since rice imports are not happening despite the reduced tariffs, a proposal is being made to the NBR to further decrease it to 5% to ease private imports.

Md Moniruzzaman, director, Procurement Division of the Directorate General of Foo.

Officials at the food and agriculture ministries have reported that approximately 11 lakh tonnes of rice production have been lost due to two rounds of flooding in several districts, including the southeast region and Mymensingh.

Traders have capitalised on this loss to repeatedly raise rice prices in the market, placing a burden on consumers. To address these challenges, the government is seeking to stabilise the local market through both private and government imports.

The food ministry had initially proposed reducing the total tax burden on rice imports from 62.5% to 5%. On 20 October, the NBR granted a total reduction of 35% at various levels, leaving the current tariff at 27.5%. The NBR estimated this reduction would decrease the import cost of rice by Tk14.50 per kg.

However, both rice importers and the food ministry have assessed that importing rice from India would still cost at least Tk65.92 per kg, while imports from Thailand would be Tk75.64 per kg. Factoring in transportation and other costs would push prices above local market rates, leading to the lack of interest from traders even after the tariff reductions.

An official at the food ministry told TBS, "A letter is being prepared to reduce the tariff to 5%, and it will be sent to the NBR soon." This official added that without a tariff reduction, rice imports will not take place due to high global market prices.

On 20 October, the NBR announced a reduction in the total tax burden on rice imports, lowering import duty from 25% to 15%, reducing the regulatory duty from 25% to 5%, and eliminating the 5% advance tax.

Kauser Alam Khan, vice president of the Bangladesh Rice Merchant Association, said, "The price of good quality rice at the mill gate is currently Tk60. If the price is even higher when imported from abroad, no one will bring it in.

"Moreover, the Aman harvest will begin in a few days, which will naturally lower prices."

He added, "Due to these complications, no one has shown interest in importing rice. The government is not only trying to facilitate private imports but has also initiated the process for government imports."

The food ministry has received permission to import 5 lakh tonnes of rice for the current fiscal year, initially attempting to secure this through a tender process. If this approach fails, the government will resort to a government-to-government import strategy.

Simultaneously, the process for importing 7 lakh tonnes of wheat has also commenced.

According to the Trading Corporation of Bangladesh (TCB), the price of fine rice has gone up to Tk80, compared to Tk72 at the same time last year.

Medium-quality fine rice is now 9.35% more expensive than last year, with a maximum price of Tk62. In Dhaka markets, it has increased from Tk58-65 to Tk65-70 for consumers.

Additionally, the maximum price for coarse rice is Tk55, which is a 7% increase from last year, according to TCB data.