Bangladesh News

The good news is the country at present has no shortage of food grains due to a bumper Boro harvest in progress and a huge import in the recent months.

But the bad news is food grains will continue to be pricey in the months to come.

According to latest estimates of the food ministry, the demand for rice and wheat in the current fiscal year is 2.60 crore tonnes while their net production is 2.59 crore, meaning deficit is only one lakh tonne.

Organisations in private and public sectors have imported 34.73 lakh tonnes of grains including 21 lakh tonnes of rice between July 1 and April 24. This is 91 percent up on the corresponding period last year.

During the same period, importers have opened letters of credit (L/C) to import 50.56 lakh more tonnes of food grains including 33 lakh tonnes of rice.

Back-to-back floods and Cyclone Sidr last year damaged at least 18 lakh metric tons of standing cereal crops, posing a serious threat to the country’s food security.

With the net annual demand estimated to be 2.60 crore tonnes, both the government and private sector focused on importing food grains to recover the deficit.

However, things began to change for the better with the start of Boro harvest last month.

Explaining how food requirements and deficit were calculated, a food ministry source said the country’s population this year has been estimated to be 14.56 crore. Each individual requiring 489 grams of food a day puts the total demand at 2.60 crore tonnes.

On the supply side, production of Aus and Aman stands at 1.05 crore tonnes while it was 1.23 crore tonnes in the previous fiscal year.

The recent harvest of Boro has made good much of the shortfall resulting from floods and the cyclone. It is estimated that the Boro yield this season will be around 1.75 crore tonnes while wheat 8 lakh tonnes.

The net food production in that case will stand at 2.59 crore tonnes–just one lakh tonne shy of the total demand.

Despite the positive developments, prices of food grains are not going to come down anytime soon, predict food ministry officials and economists alike.

According to Trading Corporation Bangladesh (TCB) report, coarse rice was selling at Tk 33 to Tk 35 a kg yesterday. The same was the price a week ago. It shows the Boro harvest and import have yet to leave any impact on the price situation.

This trend will continue, said food ministry officials. “It’s because the production cost has shot up by 54 percent in one year,” said an official.

On the other hand, import price too has increased sharply due to a global food crisis. The price of rice on the international market is increasing on a daily basis with many countries resorting to restrictions on export of their rice.

In a latest development, five major rice exporting countries including Thailand, Vietnam, Cambodia, Laos and Myanmar have agreed in principle to form a platform styled OREC (Organisation of Rice Exporting Countries) to control rice prices on global market.

Thailand, the biggest rice exporter, has already said it wants to form an Opec-style cartel comprising Mekong nations to gain more control over international prices.

Talking to The Daily Star last night, Uttam Kumar Deb, head of research division at the Centre for Policy Dialogue (CPD), said if they really go on to create a cartel the price of rice will increase and at the same time availability of the staple will decrease.

“So, Bangladesh should try to increase the production to meet the deficit,” he observed adding that a hard time is ahead as supply even in the international market will be limited.

He also said though the farmers are having a bumper Boro crop, the price would not mark any significant decrease as both production cost and scarcity of food grains in the world market have increased.

Uttam said how much the price of rice would decrease depends on whether the farmers would be able to gather the crop safely in the next few days.