Global Rice News

***Rice Prices Remain High Despite Import Duty Cut***

Rice prices in Bangladesh have remained high despite a significant reduction in import duty. The duty was slashed from 62.5% to 15.25%, but traders continue to benefit from inflated prices. Market sources in Dhaka have reported that coarse rice like guti swarna and hybrid varieties are selling for Tk 52-55 per kilogram. Medium-quality BRRI dhan 28 and swarna-5 are being sold for Tk 65-68 per kilogram. Finer varieties such as miniket, jeera, and najirshail are priced between Tk 75-98 per kilogram.

Market sources have indicated that higher global rice prices, combined with the existing import duty, are discouraging traders from engaging in rice trading activities at present. Additionally, warnings issued by the government regarding alleged market manipulation have had little effect on millers and traders. The government is facing difficulty in sourcing rice from the international market due to the further increase in global rice prices.

The UN Food and Agriculture Organisation’s monthly data reveals a 13% surge in rice prices in January 2024 compared to the previous year. These current price indices are the highest since 2008. Indian and Pakistani parboiled rice is available at $530-553 per tonne, while Vietnamese and Thai rice is priced between $599-650 per tonne.

Johurul Islam, an importer based in Dinajpur, has expressed his belief that despite the reduction in import duty, the cost of importing rice would still be higher than the domestic price. He states that coarse rice, currently priced at a maximum of Tk 46 per kilogram at mill gates, would cost Tk 69 if imported duty-free. Islam further believes that the import cost of medium-quality rice like BRRI dhan 28 would exceed Tk 75 per kilogram.

Islam identifies India as the easiest source for rice, but notes that the country still imposes a 20% export duty, with an FOB rate above $530 per tonne. Additionally, Bangladesh’s import duty is 15.25%, and sourcing dollars for import is a challenging task. These barriers have led private importers to show no interest in circumventing them.

In January, rice millers suddenly increased prices by Tk 5.0-7.0 per kilogram. In response to market volatility, Food Minister Sadhan Chandra Majumder issued a warning to traders and millers, threatening action if prices weren’t reduced within four days. The commerce and food ministries conducted drives across the country, imposing fines on “dishonest” traders in an attempt to curb what is being referred to as an oligopoly. The food ministry further compelled rice millers and companies to include the mill-gate price and MRP of rice on the sacks and packets, as well as the official genetic name of the rice variety, according to a ministry notification.

SM Nazer Hossain, Vice President of the Consumers Association of Bangladesh (CAB), acknowledges that retail prices of rice remain high despite several government interventions. He claims that companies, millers, and their allied traders have profited unethically from last month’s surprise hike in rice prices. Hossain urges the government to take action against rice hoarding and impose exemplary punishment on those who break the law to ensure stability and fairness in the market.

Value-chain expert Prof Dr MA Jalil notes that global rice prices are currently at record highs, while import options for Bangladesh have been limited due to Indian export restrictions. To mitigate potential shortages, Jalil emphasizes the importance of proper management of domestic stock. He also suggests that private companies be given the necessary facilities to import rice from countries such as Thailand, Vietnam, and Pakistan to ensure smooth supplies and rational prices. Jalil proposes temporarily zero-rating import duty to encourage importers.

According to the food ministry, Bangladesh has not imported any rice so far in the current financial year. The country’s rice demand is estimated at 33-34 million tonnes, while it produces 37 million tonnes, creating a surplus. Despite this surplus, market experts have indicated that mismanagement and post-harvest losses contribute to market volatility.

**Source:** [Financial Express](https://today.thefinancialexpress.com.bd)