Trade in rice: Where does BD stand?

One has ample reasons to get confused by the recent developments involving the country's trade in rice, the main staple of its 160 million people.

The cabinet has, reportedly, decided to allow the export of 50,000 tonnes of rice to Sri Lanka. In fact, the Sri Lankan authorities have sought to import 100,000 tonnes of Bangladesh rice. But the cabinet after reviewing the overall food situation has decided to allow the export a half of that quantity.

If the cabinet decision is implemented, this would be first-ever export of common variety of rice from Bangladesh since independence. The country at the same time would become both importer and exporter of the Asia's widely consumed cereal. The government, from time to time, however, allowed export of a limited quantity of aromatic rice, namely, Kalijira and Chinigura varieties.

Bangladesh has always been a net importer of rice, making imports of parboiled rice from neighbouring India, Pakistan, Thailand and Vietnam. However, the bulk import of rice is made from India because of its proximity.  

The volume of rice import is largely influenced by the state of production of the same locally. Bangladesh had faced one of the most difficult periods in the year 2008 when the food prices skyrocketed in the international market. Higher import price of rice, coupled with a substantial decline in food production due to the onslaught of the cyclone Sidr, had then pushed up the food prices abnormally in the domestic market.

But since 2010, the country has been producing sufficient quantities of rice almost without any interruption. This was possible due to the fact that the country was not struck by any major natural calamity. It is claimed that current production level of rice is enough to meet the country's demand for the same.  

Given the rice production situation, the government has reduced its rice import to a great extent. It had imported only 3000 metric tonnes in the fiscal 2013-14 and has not imported even a grain of rice this fiscal.

But the most puzzling aspect of the country's rice trade had been the sudden spurt in rice import by the private sector during the last fiscal. The rice import by the private sector in the fiscal 2012-13 fell drastically. But in the last fiscal they imported 371,000 metric tonnes of rice. Until August 24 of this fiscal, the private sector import of rice stood at 5000 tonnes.  Many, however, tend to link the surge in private rice imports to the flight of capital. Rice, being an essential commodity, does not have any import duty.

However, the private sector import could be a measure to fill up the gap created in the availability of rice through the government's procurement drives during the last Aman and Boro season. The government has built up a reserve of more than 1.0 million tonnes of rice. The directorate of food has already procured 800,000 tonnes of Boro rice this year.

Notwithstanding a satisfactory level of rice production, the country needs to import a sizeable quantity of rice to create a reserve stock. It might need some more time to meet both current consumption and buffer stock requirements with locally produced rice. However, reaching that goal might prove really difficult because of the unabated shrinking of arable land and a few other factors.

So, statistics do indicate to the reality that the country is yet to achieve self-sufficiency in food production, in the truest meaning since a healthy buffer stock is the part and parcel of efficient food management of any country.

Moreover, the government does need to take into cognizance the current flood situation before materializing the decision to export rice. The flood that has already ravaged many northern districts is about to enter the middle part of the country. More than 125,000 acres of land with transplanted Aman in 12 flood-hit districts have been inundated. The damage to crops might even be far greater if the flood stays longer and engulf more areas.

In the event of any substantial damage caused to Aman, the second major rice crop grown locally, there would be a shortfall in food production. Besides, the decision to export rice might leave an impact on the price of rice in the domestic market. At the retail level, the price of a kilogramme of coarse rice is now between Tk.33 and Tk.35. The flood might lead to a change in the price level. The decision on rice export is likely to add fuel to it.

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