Rice import hit $52.5m in July but no respite from price hike
Rice import increased 87 times year-on-year in July of the current fiscal 2021-2022 amid high prices of the staple in the local market. In July this year the country imported rice to the tune of $52.5 million from $0.6 million during the same period of FY21, BB report said.
Due to the surge in rice prices in local kitchen market, the government eased the rice import with a view to strengthening the stock and containing soaring rice price in local market.
It allowed private businesses to import rice in December 2020. This time the government has also reduced the import duty on rice to 25 per cent from 62.5 per cent and private parties were allowed. Rice import has been on the rise ever since.
Between July 1 and September 12 this year, the import of rice stood at 6.64 lakh tonnes, a food ministry update showed. In FY21, the country imported 67.02 lakh tonnes of rice. Even though the country's food production has deteriorated, the government has delayed to open rice import by private entities, rice millers said.
They said the government took the decision at a time when its stock of the staple was under severe stress and prices had increased sharply, leaving the poor and fixed-income earners under immense financial pressure amid the Covid outbreak.
Asked about the reason for the soaring prices of rice, Consumer Association of Bangladesh (CAB) chairman Ghulam Rahman told The Daily Observer, 'If the government's claim of adequate rice production is correct, they're supposed to be no import dependence but there is.'
On the other hand, the import of rice was subject to 62.5 per cent tax and the high tax was not imposed to raise revenue collection but rather to prevent import, he said. The government usually reduces the tax rate to 25 per cent when the local market comes under stress to import rice on a limited scale, he said.
Probably, the reduction of the import tax on rice to 25 per cent applicable tax was not enough to bring down the prices of rice on the local market, he said, adding that the government might not even want a decline in the prices of rice as it may discourage the farmers.
'Even though rice productivity in the country has increased significantly, neighbouring countries like Thailand and Vietnam have managed to maintain high productivity at a much lower cost,' Ghulam Rahman said. Bangladesh will have to reduce the cost of production as well, the CAB chairperson said.
On the other hand, increased earnings of consumers could be another solution but the coronavirus outbreak has resulted in joblessness for many and so we can forget about the earnings increase, he said.
Amid the price hike, the stock of the staple food plunged to a record low of 4.62 lakh tonnes on April 20 this year, the lowest after 2008 when the stock dropped to 2.8 lakh tonnes.