Troublesome import of Indian rice
Wednesday, 19 March 2008
Shamsul Huq Zahid
A tabloid Bengali daily some weeks back headlined a story, 'chal neye chalbazi' (trickery over rice trade) detailing the frequently shifting Indian stance on rice export to Bangladesh. The headline was not at all exaggerating.
The developments over Indian rice import under the government-to- government deal as well as private sector initiatives for the past three months have been very much annoying and troublesome for Bangladesh.
The frequent hike in export prices of rice and consequent stalemate created over entry of rice consignments to Bangladesh have had an impact on the prices of rice in the local market. Dillydallying over the export of 500,000 tonnes of rice to Bangladesh by India under a government-to-government deal has also contributed to the ongoing volatility in the local rice market.
Problems over import of Indian rice have been galore. Bangladesh government was facing problem while trying to build up a buffer stock of rice soon after the devastating cyclone, Sidr in November last. Rice prices started going up globally in the event of short supply of the commodity. The authorities in India, the main source of rice import by Bangladesh, slapped a ban on the export of non-Basmati rice. But Indian foreign minister while on a visit to the cyclone-affected areas, offered to export 500,000 tonnes of rice to Bangladesh. At that time export price of Indian non-Basmati rice at the private traders' level was $425 a tonne.
The first consignment of only 2000 tonnes of the promised rice entered Bangladesh last Monday under a deal signed with the West Bengal government for import of 100,000 tonnes of rice at a price of $399 a tonne. Another 98000 tonnes are expected to reach Bangladesh soon. But the import of the remaining 400,000 tonnes of rice has become quite uncertain as the Indian importers concerned are, reportedly, now demanding $ 550 per tonne, which is a prohibitive price for Bangladesh government.
Meanwhile, rice import by private traders from India is facing yet another setback. Hundreds of rice-laden trucks are now stuck up across the Bangladesh land ports following the Indian government's latest decision to increase rice export price from $505 a tonnes to $650 a tonne. The Indian customs barred these trucks from entering Bangladesh following the hike in the rice export price. Similar situation was also created earlier when the rice export price was increased from $425 a tonnes to $505 a tonne.
To add to the miseries of Indian exporters and Bangladeshi importers, the Indian government has taken a decision to allow export of rice only through some specific seaports. The decision has infuriated the Indian exporters who have threatened to resort of strike if their government did not revoke the decision immediately. The federation of Indian exporters have already met their foreign and commerce ministers and requested them to withdraw the decision concerning the use of seaports.
There is no denying that global food market is now over-heated because of supply constraints. Food exporting countries have hiked the prices of their commodities. For instance, Thailand has very recently increased the export price of rice from $350 to $500 a tonne. The level of increase by India, however, is much higher than that of other rice exporting countries. Thus, Finance Adviser Dr. Mirza Azizul Islam during a meeting with the visiting Managing Director of the World Bank requested the latter to use his good offices for convincing the Indian authorities to reduce the rice export price, especially for Bangladesh.
The reason behind the creation of all the roadblocks by the Indian government to smooth export of rice is understandable. Actually, it wants to discourage export of rice the price of which has also gone up in its domestic market. No country would export an essential item ignoring the domestic demand for the same.
But the Indian authorities should not also overlook the implications of such obstacles thus created to smooth flow exports of essential items including rice on relations with a close neighbour like Bangladesh.
If India imposes total ban on rice export, there should not be any reason for Bangladesh to grumble about it. But obstacles, if created deliberately, to the normal flow of a sensitive essential item like rice, it might give rise to suspicion among wider section of the population here about the very Indian intention. Both India and Bangladesh are now trying to improve their relations and the 'Moitree Express', the train service which is scheduled to start running between the two countries from first day of the next Bangla calendar year, would give a boost to such efforts. Unnecessary irritations over rice trade should not undermine the prospect for building better relations between the two neighbours.
A tabloid Bengali daily some weeks back headlined a story, 'chal neye chalbazi' (trickery over rice trade) detailing the frequently shifting Indian stance on rice export to Bangladesh. The headline was not at all exaggerating.
The developments over Indian rice import under the government-to- government deal as well as private sector initiatives for the past three months have been very much annoying and troublesome for Bangladesh.
The frequent hike in export prices of rice and consequent stalemate created over entry of rice consignments to Bangladesh have had an impact on the prices of rice in the local market. Dillydallying over the export of 500,000 tonnes of rice to Bangladesh by India under a government-to-government deal has also contributed to the ongoing volatility in the local rice market.
Problems over import of Indian rice have been galore. Bangladesh government was facing problem while trying to build up a buffer stock of rice soon after the devastating cyclone, Sidr in November last. Rice prices started going up globally in the event of short supply of the commodity. The authorities in India, the main source of rice import by Bangladesh, slapped a ban on the export of non-Basmati rice. But Indian foreign minister while on a visit to the cyclone-affected areas, offered to export 500,000 tonnes of rice to Bangladesh. At that time export price of Indian non-Basmati rice at the private traders' level was $425 a tonne.
The first consignment of only 2000 tonnes of the promised rice entered Bangladesh last Monday under a deal signed with the West Bengal government for import of 100,000 tonnes of rice at a price of $399 a tonne. Another 98000 tonnes are expected to reach Bangladesh soon. But the import of the remaining 400,000 tonnes of rice has become quite uncertain as the Indian importers concerned are, reportedly, now demanding $ 550 per tonne, which is a prohibitive price for Bangladesh government.
Meanwhile, rice import by private traders from India is facing yet another setback. Hundreds of rice-laden trucks are now stuck up across the Bangladesh land ports following the Indian government's latest decision to increase rice export price from $505 a tonnes to $650 a tonne. The Indian customs barred these trucks from entering Bangladesh following the hike in the rice export price. Similar situation was also created earlier when the rice export price was increased from $425 a tonnes to $505 a tonne.
To add to the miseries of Indian exporters and Bangladeshi importers, the Indian government has taken a decision to allow export of rice only through some specific seaports. The decision has infuriated the Indian exporters who have threatened to resort of strike if their government did not revoke the decision immediately. The federation of Indian exporters have already met their foreign and commerce ministers and requested them to withdraw the decision concerning the use of seaports.
There is no denying that global food market is now over-heated because of supply constraints. Food exporting countries have hiked the prices of their commodities. For instance, Thailand has very recently increased the export price of rice from $350 to $500 a tonne. The level of increase by India, however, is much higher than that of other rice exporting countries. Thus, Finance Adviser Dr. Mirza Azizul Islam during a meeting with the visiting Managing Director of the World Bank requested the latter to use his good offices for convincing the Indian authorities to reduce the rice export price, especially for Bangladesh.
The reason behind the creation of all the roadblocks by the Indian government to smooth export of rice is understandable. Actually, it wants to discourage export of rice the price of which has also gone up in its domestic market. No country would export an essential item ignoring the domestic demand for the same.
But the Indian authorities should not also overlook the implications of such obstacles thus created to smooth flow exports of essential items including rice on relations with a close neighbour like Bangladesh.
If India imposes total ban on rice export, there should not be any reason for Bangladesh to grumble about it. But obstacles, if created deliberately, to the normal flow of a sensitive essential item like rice, it might give rise to suspicion among wider section of the population here about the very Indian intention. Both India and Bangladesh are now trying to improve their relations and the 'Moitree Express', the train service which is scheduled to start running between the two countries from first day of the next Bangla calendar year, would give a boost to such efforts. Unnecessary irritations over rice trade should not undermine the prospect for building better relations between the two neighbours.