Rice import is not enough unless it is geared to stabilise market

Editorial Desk :
Media reports published on Friday said the NBR has slashed tariff on rice import until October 30 to facilitate private purchases from international sources and help contain rice prices in the domestic market. It has slashed the import duty to 25.75 percent from 62.5 per cent initially for import of 10 lakh tonnes of rice by private importers. NBR has also made it compulsory for importers to take prior approval from the Food Ministry for every import consignment.
The government has taken the measure to encourage rice importers who are not willing to import at existing duty because it would push up the import cost almost twice as much as the international price. It is true that a high tariff wall is not sustainable for importers while local millers and traders are also exploiting the situation, asking for higher rice prices which add to the sufferings of common people.
So in our view reducing tariff is a positive step. Tariff level on rice imports which mainly comes from India was earlier very low from 5,10 to 20 per cent. Indian suppliers might try to dump poor quality rice on Bangladesh with the help of some local trading houses who just operate as
their local agents. In such a situation domestic producers don’t get proper prices. It is a complex situation – if you allow import, farmers suffer, and if you raise the tariff wall local millers take advantage of it slowing down the release of their stock.
According to a market report in July, the average price of coarse rice was Tk 44 per kg, which would be 38 per cent higher than the price of imported rice. It has spiked meanwhile to around Tk 48-50 per kg forcing working class people to pay more. The price of quality rice has similarly spiked running between Tk 60-68 per kg. So import works as a tool for market intervention to stabilise supply and prices. We know that the administration is allowing import of poor quality rice at high prices. The food lobby is also quite strong, forcing the government to lower tariff to make their own fortune. We would say import is not enough unless it can be geared to stabilise the market.