Only 600,000 tons shipped in against the target of 1.5 million
Amid spiralling prices and a fast-depleting stock, the government targeted to import around 1.5 million tons of rice through international tenders and private importers.
Over 400 private importers were allowed to ship in some 1 million tons while the government was expected to import another 500,000 tons. However, only 600,000 tons of rice have arrived so far.
Citing sources at the customs department, it said that the target could not be met due to delay by importers and some complex regulations.
With floods damaging the Aman yield last year and a price surge amid the pandemic, the food ministry slashed import duty to 25 %from 62.5% to allow private traders to ship in the commodity in December.
Earlier in July, the food ministry said that it decided to buy rice from abroad as millers refused to supply at the agreed price, despite a bumper harvest of paddy in the Boro season last year.
However, while announcing the Boro procurement target for this year, the food ministry said private traders will not be allowed to import after April 30 in a bid to ensure fair prices for farmers.
The government has ordered private traders to ensure that the imported rice reaches the market by May 20.
‘Tough rules for import’
Traders, however, said the conditions for importing rice were “impractical”.
“The food ministry said, LCs have to be opened within seven days after securing the clearance from the commerce ministry and the rice should reach the market within 20 days of shipping it in. It’s nearly impossible,” private importer Mizanur Rahman said.
Most of the traders were moving to buy from India while the government is also procuring from the country in a G2G (government-to-government) agreement, he said.
“India has raised prices as both the government and private traders have approached. It’s not just feasible to import at that price,” said Mizan.
According to the food ministry, more than 400 private traders have taken permission to ship in several thousand tons of rice. But most of them have not completed the required process including the opening of debentures or letter of credit (LC).
Why does the government say?
According to Food Minister Sadhan Chandra Majumder, an “HS code issue” caused importers to pay additional duty to release their products, which has been solved.
"Initially, there was a problem with duty. That has been resolved…Imported rice has also started to enter the country,” the report quoted him saying.
Food Secretary Nazmanara Khanum, however, cited global prices, behind the low import
“Prices have gone up in the international market, and there is a crisis of vessels to ship in the rice,” she said.
According to finance ministry sources, the government has brought between 250,00 and 300,000 tons of rice through international tenders, mostly from India, and more are in the pipeline. It is also buying rice from India in G2G deals.
Bangladesh is the world’s third-biggest rice producer after China and India with an annual output of 36 million tons. However, natural disasters like floods, cyclones, and droughts often compel the country to rely on imports to bridge the demand-supply gap.