In the days ahead there is a possibility that Bangladesh’s rice market will go volatile as India may slap a ban on its rice export. In reaction to this news that appeared in international news outlets including Reuters, the food ministry seems to be complacent the reasons being there are ample food stocks in public storages as well as good harvests in immediate past two crop seasons.
But the authorities must keep it in their mind that mere declaration of an export ban in India or import ban from Bangladesh can shoot up the price of a commodity in Bangladesh.
The recent case of onion is a pertinent example of this. After the Eid-ul-Fitr this year the price of locally produced onions kept increasing, from Tk 30 to Tk 100 within a couple of months. At that time, there was an import ban on onions from Bangladesh.
The government slapped the ban so that onion farmers in the country get some price from the produce.
The dishonest businessmen made an opportunity out of this and increased onion price step by step so much that soon it became hard for the consumers to buy this essential cooking vegetable.
The authorities were forced to lift the ban on onion import from India and the mere news of it impacted the onion market and its price fell by Tk 30-40 per kilogram within a night. As onions started to arrive from India, its market in Bangladesh gradually stabilised.
Therefore, if the past experience is anything to go by regarding the nature of Bangladesh’s businessmen, there is very likely, as soon as India, the world’s biggest rice shipper, declares a ban on export of rice, its price can see an overnight’s rise even if there are large stocks of it in Bangladesh.
So there is a challenge ahead to control rice prices in the domestic market, contrary to what the director general of the Directorate General of Food said on Thursday in reaction to India’s prospective ban on rice export.
The price of rice can increase despite the fact that there is now around 62 per cent import tariff on the commodity and imported rice will not be competitive at this tariff.
