Spillover effect on BD staple procuring predicted

Fallout on Bangladesh's staple procurement is predicted from the imposition of 20-percent export duty on parboiled rice by India in their latest market-protection move, after high onion taxing.
Sources say the 20-percent duty on parboiled-rice export could have severe implications for Bangladesh's foreign sourcing of the staple as global prices showed another spike after the Indian announcement.
The government has targeted to procure 0.5 million tonnes of rice this financial year from the foreign sources while, if needed, it would also ease private imports in coming months to keep the price cool, according to the directorate general of food.
In the last financial year, the country imported 1.05 million tonnes of rice of which the government itself brought 0.65 million tonnes.
The private sector made all its imports from India while the government sourced one third of its foreign procurement from the neighbouring country.
Despite considerably low price in FY'23 than that of now, the private sector could source only 0.42 million tonnes although the government permitted import of above 1.4 million tonnes, an official at the directorate general of food (DGoF), said.
"The Indian government move might cause further hike in global rice price which is already more than a decade-high," he said.
The Indian government has imposed the duty on the export of parboiled rice as a move for maintaining adequate local stock and keeping domestic prices under check, according to an 'Economic Times' report.
India's finance ministry imposed the duty on August 25 which will remain effective till October 16, 2023, says the report.
India, the biggest rice exporter in the world, earlier imposed ban on non-basmoti white rice and broken-rice exports which fueled up global prices.
FAO All Rice Price Index-measured rice prices increased to 129 points in July, a 12-year high and above 19-point higher than a year ago.
Director-General of the DGoG Md Shakhawat Hossain says the country has a handsome stock of 1.6 million tonnes of rice now and the domestic price is also rational for last few months thanks to a record production of 20.9 million tonnes in the Boro season.
He says the Directorate has so far procured 1.31 m tonnes of rice in the ongoing Boro-procurement season and it is near to achieving its target.
"We've target to bring 0.5 million tonnes of rice from the globe, if needed," he says about contingency planning.
Farm economist and supply-chain expert Prof Rashidul Hasan says though the rice price is now static at their previous highs in the Bangladeshi market, it could change next month with reduction in stock of Boro while a concern about flooding in many parts during this Aman plantation season grows.
He thinks the export-duty hike by India on parboiled rice could surely impact the Bangladeshi market as consumers here usually eat such kind of rice.
According to the city groceries, coarse to medium rice was retailing at Tk 50-62 a kg and finer at Tk 70-98 a kg -- almost static for last two and a half months.
Prof Hasan also points out that the Indian government has an export quota for its neighbours in case of food items and Bangladesh already has sought the offer from the Indian government.
"Amidst the ongoing turbulence on the global market, it would be wise for the Bangladesh government to utilise available quotas from India," he suggests.
"Doing so will definitely play a crucial role to mitigate further volatility within the domestic market," he adds.

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