Bangladesh's Directorate-General of Food has reportedly signed an agreement with an Indian public sector firm to import one lakh tonnes of rice on a government-to-government (G2G) basis. This is Bangladesh's first G2G agreement for rice imports with an Indian public sector firm, according to trade sources.
Though more information is awaited, the neighbouring country will purchase parboiled rice for $422 per tonne cost and freight (C&F) liner out, which includes all expenses incurred by the vessel in delivering the consignments.
Separately, the Bangladesh Food Directorate-General is believed to have signed an agreement with a South-East Asian country to import 2.3 lakh tonnes of par-boiled rice at a cost of $522 per tonne, which traders consider "unacceptable." This is also a G2G agreement.
Both transactions are expected to be made public in the coming days. Dhaka intends to import at least one million tonnes (mt) of rice from India through both G2G and private trade. "Private traders in Bangladesh have already imported 1.4 lakh tonnes of rice from India in the last few weeks at an average price of $464 per tonne," said a trading source who did not want to be identified.
The agreement comes after Bangladesh issued a tender for 50,000 tonnes of parboiled rice on August 21. The tender will be closed on September 6. Bangladesh's purchase comes amid concerns about domestic rice production issues this year, which have also plagued India and Myanmar. Rice stocks with the Sheikh Hasina Wazed administration are precarious at 1.8 million tonnes.
This year's dry weather and floods have harmed the crops of the neighbouring country's Aush, Aman, and Boro. The Aush crop has lost at least 6 lakh tonnes, while the Aman crop accounts for 39% of total rice production.
"Even if only 10% of the Aman crop is affected, it has a significant impact," the source said. Bangladesh is expected to import 6.5 lakh tonnes of rice this year, according to the US Department of Agriculture. According to trade sources, Dhaka has been buying a large amount of rice since June and is to blame for the rise in Indian prices.
Bangladesh imported 4,413 tonnes from India in the first quarter of the current fiscal year, compared to 1.62 million tonnes (mt) the previous fiscal year. With food security in mind, the Sheikh Hasina Wazed government intends to reduce the import duty on rice from 25% to zero. It reduced the duty from 65% to facilitate foodgrain imports earlier this year.
It has sourced premium rice varieties such as Sona Masuri from the Raichur region of Karnataka in recent weeks to meet its needs. Rice prices are currently retailing at 37.64 per kg, up 2.2% month on month, according to Ministry of Consumer Affairs data. Rates are up by more than 5% year on year.
The net weighted average modal price (the rate at which most trades take place) at various agricultural produce marketing committee (APMC) yards across the country is currently Rs 3,209 per quintal, up from Rs 2,841 a month ago. According to a second trade source, Bangladesh has offered a "unacceptable" price for rice from the South-East Asian country because it does not want to risk a food crisis like Sri Lanka.
