Masud Rana.

Government foodgrain stocks have significantly declined, prompting urgent measures to replenish reserves. Current stock levels stand at just over 1.2 million tonnes, with rice accounting for about 8,00,000 tonnes and wheat making up the rest. 

To address this, the government has launched an initiative to import 1.6 million tonnes of rice and wheat to stabilise the market and support upcoming programs like the Food-Friendly Program, which begins in March.

Stock decline and its causes

At the start of 2023, government foodgrain stocks were approximately 2 million tonnes, dropping to 1.6 million tonnes by early 2024 and further to the current levels. Officials from the Food Ministry attribute this decline to the previous government’s lack of rice imports and the distribution of significant amounts of rice under social programmes.

Food Secretary Md Masudul Hasan explained: “The government did not import rice in the last fiscal year, and the monthly distribution of rice through Family Cards to one crore families depleted stocks. A similar program this year for five million families will further impact reserves.”

Rising rice prices

Market surveys reveal that rice prices have surged by Tk 2-6 in the last two weeks, despite the arrival of new Aman season rice. Retail prices now start at Tk 62 per kilogram, with coarse Swarna and Paijam varieties dominating the market.

Rice millers cite increased production costs as the reason for price hikes. Farhad Chakdar, General Secretary of the Naogaon Rice Mill Owners Group, said: “Rice prices have remained high since the beginning of the season and have risen further by Tk 70–80 per maund recently. This is a natural consequence of market dynamics.”

Import and stock enhancement initiatives

To bolster stocks, the government is importing 8,00,000 tonnes of rice and 8,00,000 tonnes of wheat, with shipments already underway. A ship carrying 24,000 tonnes of rice from India arrived on December 25, with another 27,000 tonnes expected on January 10.

Food Secretary Masudul Hasan said: “We have a robust pipeline for rice and wheat imports, and by June, we aim to raise stock levels to 2 million tonnes. These imports will also stabilize the market.”

Additionally, agreements have been made with Myanmar, Vietnam, and Pakistan for further rice imports, while 150,000 tonnes of wheat are set to arrive from Ukraine and Argentina.

Challenges in domestic procurement

The government has set a target to procure 1 million tonnes of rice and paddy during the current Aman season. However, high market prices—above the government’s set rate of TK 47 per kilogram for parboiled rice—have deterred millers and farmers from selling to government warehouses.

Md Moniruzzaman, Director of the Food Department, acknowledged the challenge: “Farmers are receiving better prices at home, so they are less inclined to sell to government warehouses. Nonetheless, we are making strict efforts to meet our procurement targets.”

To ensure compliance, millers failing to meet contractual obligations face penalties, including anti-hoarding measures and administrative actions.

Private imports to stabilise the market

The government has removed all duties on rice imports to encourage private traders. Since November 1, private entities have been allowed to import 1.48 million tonnes of rice in phases.

Food Secretary Masudul Hasan assured: “Private imports are progressing well, with 87,000 tonnes already in the market. Additional applications for imports will be approved, and deadlines extended to ensure market stability.”

Outlook

With increased imports, stricter domestic procurement policies, and ongoing social programs, the government is optimistic about stabilizing foodgrain stocks and market prices in the coming months. However, sustained efforts will be necessary to achieve long-term stability.

Published Date: January 8, 2025