Saturday, November 25, 2017

Bangladesh rice prices falling on supply glut after duty cut

  • Abdur Rahim Harmachi, Chief Economics Correspondent,
    Published: 2017-07-07 04:14:54 BdST


Rice prices have started dropping in Bangladesh as traders are importing huge consignments on low duty announced in the wake of sudden price hikes and concerns over shrinking stock.

The import in the first four days of July was 60,000 tonnes, which is nearly half of the total import made last fiscal year.

On Thursday, wholesale prices of local rice dropped by Tk 1 to Tk 1.5 per kilogram. Imported rice prices were down by Tk 2 to Tk 2.5 a kg.

The fall, however, is yet to have much effect on the retail prices. But the government’s trading arm, the Trading Corporation of Bangladesh (TCB), claims coarse rice prices have dropped by Tk 2 to Tk 3 per kg and the fine varieties by Tk 1 to Tk 2.

Nizam Uddin, General Secretary of the Rice Traders' Association in the capital's largest wholesale rice market Badamtoli-Babubazar, said the prices are slipping back to a comforting level following the duty cut.

The government announced the cut in duty on rice import from 28 percent to 10 percent before the Eid-ul-Fitr to rein in the prices and to encourage the private importers.

Traders said prices have also dropped in northern district Dinajpur, one of the largest producers of the staple in Bangladesh.

All the consignments that came in until Wednesday were private imports.

Food Minister Qamrul Islam says the prices will decline more in a blow to the mill owners and hoarders who had stockpiled to create an artificial crisis in the market, taking advantage of the floods in Sunamganj. 

He expects the market to get normal within a month after the government's consignments arrive.

The government has floated new tenders to procure 100,000 tonnes of rice. It has also given the green light for a purchase of another 250,000 tonnes of rice from Vietnam under a government-to-government deal.

Monir Hossain, a trader at Babubazar, said huge consignments are coming from India every day after the duty cut.

The price of coarse rice dropped by Tk 200 to Tk 250 per sack of 50 kg. Fine variety rice price also fell by Tk 100 to Tk 150 per sack.

Before the Eid, coarse rice varieties -- Swarna and Paijam -- were on sale at Tk 48-50 per kg and other low-quality coarse rice at Tk 46 in the kitchen markets of Shewrhaparha, Mohakhali, Rampura, Karwan Bazar, and Hatirpool.

Traders retailed Miniket and Najirshail at Tk 56-62 a kg.

On Thursday, at Shewrhaparha and Hatirpool, coarse rice was being sold at Tk 45 to Tk 48 per kg while thin grains were priced at Tk 57 to Tk 60.

She wrhaparha rice retailer Shyamal Kundu said, "The Eid mood is still in the air. Fewer people are coming to the market than usual. Sale hasn't picked up yet.

"I haven't brought new (imported) rice...I can't count losses by selling rice from old consignments at lower prices. That's why I have stuck to the previous prices," he said.