Putting aside Rohingya crisis
Bangladesh will buy 100,000 tonnes of rice from Myanmar, putting aside a rift over the Rohingya refugee crisis as the government races to overcome a shortage of the staple food for the country’s more than 170 million people.
High rice prices pose a problem for the government, which is ramping up efforts to replenish its depleted reserves after floods last year ravaged crops and sent prices to a record high.
Muslim-majority Bangladesh and Buddhist-majority Myanmar have been at odds over the more than 1 million Muslim Rohingya refugees in camps in southern Bangladesh. The vast majority of them fled Myanmar in 2017 from a military-led crackdown that U.N investigators said was executed with “genocidal intent” – assertions that Myanmar denies.
Bangladesh will import white rice in a government-to-government deal at $485 a tone, including cost, insurance and freight (CIF) liner out basis, said Mosammat Nazmanara Khanum, the secretary at the country’s food ministry.
“Our main priority is to bring down the prices of rice,” Khanum told, adding the government could buy as much as 10 million tonnes while private traders are allowed to buy another 10 million tonnes in the year to June.
The deal will be signed soon and the rice will be delivered by April in phases, she said.
Bangladesh is also buying 150,000 tonnes of rice from India’s state-run firm NAFED in a government-to-government deal while it has issued a series of tender to buy the grain.
“We could buy more rice from India in state-to-state deals,” Khanum said, adding that the Food Ministry was holding talks with several other Indian state agencies.
Bangladesh, traditionally the world’s third-biggest rice producer with around 35 million tonnes annually, uses almost all its production to feed its people. It still often requires imports to cope with shortages caused by floods or droughts.
The government’s rice procurement drive during last year’s Aman season is facing hurdles because of the mismatch between the ruling market prices and that fixed by the government of both rice and paddy.
The two main sources of procurement— farmers and millers— are found reluctant to sell paddy and rice to the field-level food officials. The prices of both paddy and rice in the grain hubs (mokams) are much higher than the prices offered by the government for both.
The food officials have procured a highly insignificant quantity of paddy and not a single grain of rice so far. The procurement of paddy began on November 07 last. The procurement of milled rice was due to start on the November 15th, but it could not launch in the absence of agreements with the millers.
Coarse variety of Aman rice is being traded at Tk 43-46 per kilogramme (kg) and coarse variety of paddy at Tk 35-Tk 38.5 a kg in the rice hubs during this peak harvesting season against the government’s procurement price of Tk 36-37 (rice) a kg and Tk 26 (paddy) a kg respectively, according to Department of Agricultural Marketing (DAM).
The millers and farmers have expressed their reluctance to sign agreements with the Directorate General of Food (DGoF) to supply the staple due to high prices in the open market, said insiders.
It has also set a target to purchase paddy directly from the framers at Tk 26 a kg.
Though paddy procurement has started, the farmers are not interested in selling it. As a result, the authority could purchase an insignificant amount of paddy in last two weeks, an official at DGoF said.
He said the rice procurement drive has not yet started as millers are not interested fearing losses.
The directorate has also floated an international tender to import 50,000 tonnes of rice as the stock of rice at the public warehouses has come down to as low as 0.62 million tonnes, he added.
“The framers are getting prices more than the government rates as we procure paddy only to benefit the farm community. If the farmers get more profits in the open market, it is welcome news.”
The DGoF also couldn’t achieve the Boro procurement target last year as it purchased only 1.1 million tonnes against the target of 1.9 million tonnes.
When contacted, Secretary of Bangladesh Auto Major Husking Mill Owners Association (BAMHMOA) K M Layek Ali said production of Aman might witness a decline due to flooding last year which caused a surge in the prices of the staple.
Prices of paddy have reached an all-time high this season as Swarna and BR-11 paddy have been selling at Tk 1,000 a maund which was Tk 680-700 a maund last year, he added.
According to him, price of per kg Swarna rice is now Tk 43-44 at mill gates. “How can a miller supply the grain at Tk 37 a kg,” he questioned.