Bangladesh, facing high inflation, is to get 300,000 tonnes of rice from neighbouring India at below international market prices under a diplomatic deal, a Bangladesh foreign ministry statement said on Tuesday. The statement was issued after Bangladesh Foreign Minister Dipu Moni on Monday met her Indian counterpart S.M. Krishna on the sidelines of a SAARC Council of Ministers meeting in Bhutan.
"Mr Krishna informed that 300,000 tonnes of rice would be soon ready to be exported to Bangladesh at a price cheaper than the international market," the statement said. India is also ready to export 12,000 tonnes of sugar to Bangladesh, it added.
Although it is the world's fourth-biggest rice producer, Bangladesh has emerged as a major importer this year and is desperately looking for dependable sources as once traditional supplier India keeps a ban on grains exports. India, the world's second largest rice producer, does not permit free sale of the grain but sends limited stocks overseas to friendly countries.
The government, under mounting pressure to contain prices, seeks to import 2.2-3.0 million tonnes of grains, including 1.2 million tonnes of rice, in the year to June, up from nearly 550,000 tonnes in the previous year. A combination of short supply due to widespread hoarding by middlemen and panic buying are pushing up prices of rice, staple food for the country's more than 150 million people.
Soaring prices pushed Bangladesh's food inflation rate to 11.01 percent in December, the highest level in three years. Analysts expected food costs to rise further in coming months in step with rising global commodity prices. Last week the United Nations said its food price index rose for the seventh month in a row to 231 in January, topping a peak of 224.1 in June 2008. It is the highest level the index has reached since records began in 1990. Bangladesh, which suffered badly during the 2008 spike in global food prices, wants to build reserves of basic commodities such as wheat, rice, oils and sugar to avoid a similar situation.