Bangladesh raises rice price for domestic procurement

Bangladesh will offer an incentive of 1.25 taka per kg above its earlier fixed price for domestic procurement of rice to build up emergency stocks, a senior food ministry official said on Wednesday.
Bangladesh's army-backed interim government set a target of procuring 1.2 million tonnes of rice, the country's main staple, from local millers, by the end of August, before the annual flooding season begins in September. Also the government needs the rice at its disposal to start cut-price rice sales among the poor people, including slum dwellers, from next week, food ministry officials said.
Since the domestic procurement drive began in April, after the country harvested a bumper "boro" rice crop of more that 17 million tonnes, the government has so far procured 698,000 tonnes of rice and 44,000 tonnes of paddy, at 28 taka and 18 taka a kg, respectively.
The prices were still lower than prices at retail markets in the country, but higher than what most private buyers offer at the growers' level, officials said. Farmers also get poor price because of control of the market by dishonest middle-traders, they said.
"Sometimes we even do not get the price to cover production cost," farmer Abul Kahir in the eastern district of Brahmanbaria said on Wednesday. Recently the mill owners asked for a higher price for rice they sell to the government, citing higher market price, officials said.
"We have offered them an additional 1.25 taka per kg as an incentive, hoping to make the procurement drive a complete success," Molla Waheduzzaman, secretary of the Food and Disaster Management Ministry, told Reuters.
The mill owners welcomed the latest government offer. "The price of rise is already falling in domestic markets. If the trend continues, the prices will ease further. So any incentive would encourage the millers," said Mahmud Hasan Raju, a miller from northern Thakurgaon.
He said most millers had bought paddy at high prices months ago, when supply was short against soaring demands. The calamity-prone South Asian country has set itself the target of building emergency food grain stocks of 3.2 million tonnes through domestic and overseas procurements in the current fiscal year (July-June), officials said.
Bangladesh embarked on similar procurement drive after every previous flood or cyclone - which hit the impoverished country almost every year - but often missed the targets. It plans to import 500,000 tonnes of rice and 800,000 tonnes of wheat in the fiscal year to next June to shore up the buffer stock.