Rice import at high price proves the govt was not prepare to face the crisis
THE government move to import the primary food staple rice from Vietnam at prices much higher than local prices and recent imports have earned much criticism. The sudden food crisis due to flashflood in the Haor areas failing the government’s ensured food security have catalyzed to increase prices of all varieties of rice in the domestic market and depleted the public granaries to such an extent that the government is compelled to import rice at high prices. As per news media report, the government has sanctioned 2.5 lakh tonnes of rice import under a government-to-government deal with Vietnam. The government, if it took precautionary steps, would not have needed to import rice within weeks at high prices.
It is said that Vietnam has promised to ship the first consignment in 15 days and complete shipping of all 2 lakh tonnes of white rice and 50,000 tonnes of parboiled within 60 days. For each ton of parboiled rice, the government would have to pay $470 and for white rice $430. The prices are $23 to $42 (for per ton) higher than the rate that the government had sanctioned two weeks ago to international suppliers for importing two consignments of white and parboiled rice each weighing 50,000 tonnes. Floating international tenders in May, the government awarded two companies based in Dubai and Singapore two import shipments at $406.48 and $427.85 a ton of white and parboiled rice respectively. The government would spend Tk 908.85 crore to buy the Vietnamese rice, spending Tk 56.53 crore more compared to the prices in the international market.
Millers at home declined to sell rice to the government during the current Boro procurement season saying its price offer was not lucrative enough and the price of coarse rice hit an all-time high of Tk 48. For the situation, experts blamed an imprudent food stock policy that the government pursued this year thereby allowing market manipulators to pick-up the prices of coarse rice up to 42 percent comparing to last year’s price. With millers declining to sell rice to the government at low price offers of Tk 34 a kg, the government was threatening that those millers would be blacklisted for future trade. Although some rice was lost in the Haor flashfloods, the price should not have jumped so high. Why the Food Ministry and Food Directorate have failed to keep the minimum security stock of rice in the granaries is an unsolved question.
It is understood that the government failed to keep a crisis stock and market is now at the mercy of rice millers and traders. Relief and various food programs have contributed to depleting the food stock, but it is difficult to understand that the government was not prepared for the consequence of natural disaster.
It is said that Vietnam has promised to ship the first consignment in 15 days and complete shipping of all 2 lakh tonnes of white rice and 50,000 tonnes of parboiled within 60 days. For each ton of parboiled rice, the government would have to pay $470 and for white rice $430. The prices are $23 to $42 (for per ton) higher than the rate that the government had sanctioned two weeks ago to international suppliers for importing two consignments of white and parboiled rice each weighing 50,000 tonnes. Floating international tenders in May, the government awarded two companies based in Dubai and Singapore two import shipments at $406.48 and $427.85 a ton of white and parboiled rice respectively. The government would spend Tk 908.85 crore to buy the Vietnamese rice, spending Tk 56.53 crore more compared to the prices in the international market.
Millers at home declined to sell rice to the government during the current Boro procurement season saying its price offer was not lucrative enough and the price of coarse rice hit an all-time high of Tk 48. For the situation, experts blamed an imprudent food stock policy that the government pursued this year thereby allowing market manipulators to pick-up the prices of coarse rice up to 42 percent comparing to last year’s price. With millers declining to sell rice to the government at low price offers of Tk 34 a kg, the government was threatening that those millers would be blacklisted for future trade. Although some rice was lost in the Haor flashfloods, the price should not have jumped so high. Why the Food Ministry and Food Directorate have failed to keep the minimum security stock of rice in the granaries is an unsolved question.
It is understood that the government failed to keep a crisis stock and market is now at the mercy of rice millers and traders. Relief and various food programs have contributed to depleting the food stock, but it is difficult to understand that the government was not prepared for the consequence of natural disaster.
