Local food traders are increasingly importing rice from India as prices of the same fell substantially in the international markets following depreciation of the Indian currency Rupee.
Analysts say high prices in the local retail markets are also one of the main reasons for the rise in rice imports in the current fiscal year.
Retail prices in the local rice market remained at least 14-15 per higher in January last than that in the corresponding period a year earlier, analysts said. The average price of the imported parboil rice is equivalent to Tk 30 per kg.
So far the local traders procured more than 300,000 tonnes of rice mainly from the neighbouring states. They did not import any rice in the last fiscal year because of a good harvest and adequate government stocks. They imported only wheat in the fiscal.
They are mainly procuring Swarna, a parboil variety of rice that the local farmers also produce.
Sources at the food department said another 200,000 tonnes of rice was in the process of being imported from India.
Md Badrul Hassan, director (procurement) at the Directorate General of Foods told the FE that the volume of imports from India rose significantly in the current fiscal year.
"This time much of the imports is coming from India as the rice produced in West Bengal is almost as same as that in Bangladesh," he said.
"Prices of rice are now comparatively low in West Bengal," Mr. Hassan added.
Besides, the freight rate in the event of rice procurement from India is comparatively low and the shipping time is also low.
Rice imports rose to US$ 675 million in the July-December period of the current fiscal year. The figure was higher by more than 100 per cent than the imports made by the government in the corresponding period of the previous fiscal year.
"This increased imports might help stabilise the rice market," said Toufiq Ahmed, a researcher at the Centre for Policy Dialogue (CPD).
He said local traders were trying to cash in on the Indian rupee's depreciation that helped lower its price in terms of the dollar.
Mr. Toufiq said the government had failed to procure rice from internal sources during the last Boro season in 2013.
"While the government's stock is dwindling, local traders want to make profit by raising imports," he observed.
Importing such a large amount of rice would certainly create a disorder in the local market that might lead to a fall in prices of rice here, the CPD researcher said.
However, the government planned to procure 1.5 million tonnes of rice from domestic sources. The government also has a budgetary arrangement to procure 200,000 tonnes more from overseas markets, if necessary.
The annual rice consumption in the country stands at around 310 million tonnes, according to the food department of the government.
The government is also boosting its stocks by procuring from internal sources.
The food department is now procuring the Aman variety at a rate of Tk 30 per kilogramme. It procured 280,000 tonnes so far.
