Bangladesh may be harvesting a bumper rice crop, seen up 17 percent from last year and making up more than half its total demand, offering some relief to millions who risk starvation at a time of record world prices.
The major boro rice crop is expected to yield nearly 17.5 million tonnes this year, against 15.0 million in 2007, leaving Bangladesh to seek costly imports for the rest of its estimated 30 million tonnes requirement, officials said.
"This year we expect up to 17.5 million tonnes of boro rice and definitely it will have a positive impact on the market," C.S. Karim, government adviser for agriculture, said on Sunday.
"But everything depends on the honest behaviour of dealers and businessmen. We are following a free market economy and there is not much to do for any government," he told Reuters.
One kg of rice has doubled in price over the past year at 40 taka (58 cents) and wheat is at 44 taka one kg, up 150 percent, forcing a third or more of the country's over 140 million people to skip one or two meals a day, economists said.
Global food prices, based on United Nations records, rose 35 percent in the year to the end of January, markedly accelerating an upturn that began in 2002.
Since then, global prices have risen 65 percent, making it expensive for impoverished Bangladesh to import, after the country lost nearly 3 million tonnes of foodgrains in two floods and a cyclone between July and December last year.
Nearly 2.5 percent of the country's budget goes on average to food imports, officials said. The high costs and the shortage of food pose a huge test to the army-backed interim government, which took charge 18 months ago and is due to hand over power after elections planned for this year-end.
While the expected bumper crop offers hopes that the worst may soon be over, economists warn against being too optimistic.
SUPPLY CHAIN:
"I don't see any respite from the current food price hike," said economist Abul Barakat. "Our supply chain is very poor and inefficient and regulatory function is not active. So the middlemen, who control 40 percent of the price, can easily manipulate the market". Farmers at Jalkur village, 25 km (15 miles) from the capital Dhaka, were harvesting rice in a festive mood and said they expected a good profit despite higher production costs.
"Per maund (37 kg) of boro paddy now sells at 600 taka and we produced 60 maunds (of paddy) on each acre of land," farmer Abdus Salam said. "The cost of production for each acre was 15,000 taka - 40 percent higher than last year - but we will make a good profit as the paddy price has nearly doubled this year," Salam told Reuters.
Workers collecting the paddy said they were getting a daily wage of 150 taka, up from 100 taka last year. Other than soaring international prices, analysts also blame import difficulties, speculation, manipulation by middlemen, corruption and high production costs for the food crunch.
The government introduced a cut price sale of nearly 40 percent in January for rice, wheat, pulses and other commodities through shops run by troops and the food ministry. Barakat urged the government to distribute free rice to the 30 to 40 million Bangladeshis who live on less than $1 a day. "The government must introduce a proper public distribution system including rationing in order to save lives," he said.
Experts said that with a population growing almost 2 million every year, Bangladesh must increase its annual rice production by 350,000 tonnes, in addition to covering the current deficit of 2.5 million tonnes. To achieve the targeted output, the rate of increase for rice should be 3.5 percent, but growth stagnated at 1.4 percent in 2000 through 2006, said a recent research paper, though 82,000 hectares (202,600 acres) of cultivable lands are lost every year due to factors such as river erosion.
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