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UPDATE 2-Bangladesh issues first rice import tender in three years

Published 16-11-2020, 11:17 am
© Reuters.

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By Ruma Paul

DHAKA, Nov 16 (Reuters) - Bangladesh's state grains agency issued an international tender to purchase 50,000 tonnes of rice on Monday, its first buying tender in three years amid dwindling supplies and a surge in prices of the staple grain.

The deadline to submit offers is Nov. 26, with validity up to Dec. 10. The rice is to be shipped within 40 days of signing a contract, according to the tender document and officials at the purchasing agency.

Bangladesh plans to import 300,000 tonnes of rice, a senior food ministry official said, amid a potential shortfall in output after floods destroyed its crop.

Market participants, however, said the move would hardly have any impact on prices of the grain, which have gone up around 50% since March, amid the coronavirus pandemic that has pushed local prices to record highs due to panic buying.

"I don't think the government will be able to tame prices that way. It should rather cut import duty on rice," a Dhaka-based trader said.

In 2019, the government raised the rice import duty to 55% from 28% to support farmers amid widespread protests by growers over a dramatic fall in prices.

"There is no plan to cut import duty at present. We need to protect our farmers," Agriculture Minister Abdur Razzak said, adding the government would increase imports if required.

The rain-fed rice output or Aman crop is expected to fall as much as 15% this year, due to repeated floods and excessive rainfall, an official at the agriculture ministry said.

A recent domestic rice procurement drive by the government fell nearly 1 million tonnes short of the 1.95 million tonne target.

Bangladesh, the world's third-biggest rice producer with nearly 35 million tonne output a year, relies on imports to cope with shortages caused by natural disasters such as floods or drought.

(Editing by David Evans)

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