Govt wary of rice price
Fears state buying may cause further spike, decides to import instead
In a sharp departure from the usual practice, the government will not procure rice from the domestic market in the current Aman season fearing that public buying might further inflate the price of rice.
"We have decided not to procure rice this Aman season from local market, or fix its price. Rather, we will import food grains," Food Minister Abdur Razzaque told journalists yesterday after a meeting of the Food Policy and Monitoring Unit (FPMU) at his ministry.
"The price of rice price may go even higher if we procure it at a high price," he said.
The government now has a stock of around 8 lakh tonnes of rice and wheat, and will import 8 lakh tonnes more by the year end, added the minister.Each year the government procures food grains from the domestic market at higher prices to provide incentive to farmers.
"But such incentive is not needed now, as rice price is already high," Razzaque noted.
Pointing at the mismatch between production and demand for rice, an expert said it is very important that the government steps up efforts to increase production of food crops, particularly rice.Former director general of Bangladesh Institute of Development Studies (BIDS), Dr Quazi Shahabuddin, who monitors the grains market, said the government decision is practical since price of rice is already high, which is an incentive for farmers. "However, if there is a situation that farmers are not getting proper price, the government has to change its decision."He pointed out that since the price of rice is already high, building an adequate public food stock from whatever sources is "crucial for having a social safety net".
The minister said if the government finds its decision adversely affecting farmers, it will go for procurement of Aman rice from them.
He mentioned that the government has decided to import rice and wheat to ensure adequate supply and lower prices of those in the domestic market.
The FPMU, comprised of representatives from the ministries of food, finance, agriculture and commerce, took the decision at a time when the price of coarse rice ranges from Tk 31 to 34 a kg compared to Tk 22-24 a year back.
According to the Trading Corporation of Bangladesh (TCB), flour price ranges from Tk 28 to 31 as against Tk 19-22 a year ago.Razzaque said import price of rice will be Tk 33-34 a kg.In reply to a question on the government decision, he said, "We have to think also about the 40 percent people below the poverty line. So, we want to increase the total supply (of food grains) to stabilise food prices." Razzaque said despite a good harvest in Boro season this year, price of food grains was more than that of last year.
"We have decided not to procure rice this Aman season from local market, or fix its price. Rather, we will import food grains," Food Minister Abdur Razzaque told journalists yesterday after a meeting of the Food Policy and Monitoring Unit (FPMU) at his ministry.
"The price of rice price may go even higher if we procure it at a high price," he said.
The government now has a stock of around 8 lakh tonnes of rice and wheat, and will import 8 lakh tonnes more by the year end, added the minister.Each year the government procures food grains from the domestic market at higher prices to provide incentive to farmers.
"But such incentive is not needed now, as rice price is already high," Razzaque noted.
Pointing at the mismatch between production and demand for rice, an expert said it is very important that the government steps up efforts to increase production of food crops, particularly rice.Former director general of Bangladesh Institute of Development Studies (BIDS), Dr Quazi Shahabuddin, who monitors the grains market, said the government decision is practical since price of rice is already high, which is an incentive for farmers. "However, if there is a situation that farmers are not getting proper price, the government has to change its decision."He pointed out that since the price of rice is already high, building an adequate public food stock from whatever sources is "crucial for having a social safety net".
The minister said if the government finds its decision adversely affecting farmers, it will go for procurement of Aman rice from them.
He mentioned that the government has decided to import rice and wheat to ensure adequate supply and lower prices of those in the domestic market.
The FPMU, comprised of representatives from the ministries of food, finance, agriculture and commerce, took the decision at a time when the price of coarse rice ranges from Tk 31 to 34 a kg compared to Tk 22-24 a year back.
According to the Trading Corporation of Bangladesh (TCB), flour price ranges from Tk 28 to 31 as against Tk 19-22 a year ago.Razzaque said import price of rice will be Tk 33-34 a kg.In reply to a question on the government decision, he said, "We have to think also about the 40 percent people below the poverty line. So, we want to increase the total supply (of food grains) to stabilise food prices." Razzaque said despite a good harvest in Boro season this year, price of food grains was more than that of last year.
Asked if the increasing import of cereals indicates the government target of food autarky by 2013 might not be achieved, he said the domestic demand for wheat is 40 lakh tonnes a year, but the production is only 10-12 lakh tonnes.
Aman production this year will be around 1.35 crore tonnes.The minister said Bangladesh is almost self-sufficient in rice, but not in wheat. So, there is no alternative to importing wheat."Food prices are globally high now. No country other than Vietnam and Thailand is now exporting rice," Razzaque said. And it is only a global good harvest of wheat next year that can lower food prices, he added.
Aman production this year will be around 1.35 crore tonnes.The minister said Bangladesh is almost self-sufficient in rice, but not in wheat. So, there is no alternative to importing wheat."Food prices are globally high now. No country other than Vietnam and Thailand is now exporting rice," Razzaque said. And it is only a global good harvest of wheat next year that can lower food prices, he added.
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