Bangladesh to buy more domestic rice to boost reserves
Bangladesh will buy more rice locally in an effort to replenish reserves, while it has no plan to import the grain this year, the head of the state grains buyer said on Wednesday.
Such procurement is crucial for the South Asian nation to feed its poor and keep domestic prices stable at a time when government reserves are at five-year lows.
"We are buying 400,000 tonnes of rice from local farmers this harvesting season, double the earlier purchase target," Ahmed Hossain Khan of the Directorate General of Food said.
"This time we are getting a good response from the farmers as we have raised the price of rice to 30 taka ($0.38) a kg from 26 taka a year ago to ensure a fair price for them," he said.
The current food situation does not resemble that in 2008, when wheat and rice prices surged to record highs, or that in 2011, when Bangladesh became a major rice importer after its local procurement drive failed, he said.
"We have no plan to import rice this year, though global rice prices are low," he added.
Bangladesh, the world's fourth-biggest rice producer, consumes almost all its production at home. It aims to produce more than 35 million tonnes of rice in the current year, up from nearly 34 million in the previous year.
Global rice supplies have increased sharply as the embattled government of Thailand has been liquidating its stockpiles in order to pay farmers and avoid further protests.
Benchmark Thai rice prices fell as much as 15 percent last week.
Rice is the main staple for Bangladesh's 160 million people, but wheat consumption is also rising due to economic growth and lifestyle changes. It often needs to import rice to cope with shortages caused by floods or droughts.
Late in 2012, the government was considering lifting a four-year old ban on rice exports to support farmers as record crops and bulging domestic reserves pushed prices below production costs.
But prices soared in January 2013, and the government backed off of scrapping the export ban.
The government buys rice and wheat from local farmers to ensure a support price for them and builds stocks for welfare programmes and to meet any emergency needs. Its reserves have fallen to nearly 900,000 tonnes, the lowest in five years, from 1.4 million tonnes a year ago.
Although it did not import rice over the last two years, Bangladesh was ranked as the fourth-largest importer of the grain by the U.S. Department of Agriculture in 2011, with a volume of 1.48 million tonnes.
The state grains buyer, meanwhile, has moved to speed up imports of wheat, taking advantage of a slump in global prices.
Global wheat prices fell 25.6 percent to $6.05 a bushel in 2013 due to oversupply, with benchmark Chicago futures still hovering around that level.
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