Bangladesh has approved the purchase of 100,000 tonnes of parboiled rice from India in a state-to-state deal at $455 a tonne, officials said on Sunday, as the government races to shore up depleted stocks and combat high prices. Traditionally the world's fourth-biggest rice producer, Bangladesh's rice imports are set to hit their highest levels in a decade after floods hit its crops.
The price includes shipping, insurance and discharge costs. The rice is to be shipped within 60 days after signing the deal, which will take place soon, a food ministry official said. The approval followed the government's approval of the purchase of 100,000 tonnes of white rice at $442 a tonne from Myanmar, putting aside worsening relations over the Rohingya refugee crisis.
Bangladesh is also set to import 150,000 tonnes of rice from Thailand at $465 per tonne. It has already secured deals with Vietnam and Cambodia as it looks to import a total of 1.5 million tonnes of rice in the year to June. High prices of rice, a staple food for Bangladesh's 160 million people, helped send the annual inflation rate in September to its highest level since October 2015, posing a problem for the government which faces an election next year.
Strong demand from Bangladesh could further lift Asian rice prices, which hit multi-year highs in recent months after Bangladesh and other countries in South Asia saw their worst monsoon floods in years. Bangladesh imported more than 1 million tonnes of rice in the July-October period, food ministry data showed. Despite bulk imports, domestic prices have not budged, with officials and traders expecting more imports of the staple grain in the coming months. In August, the government cut a duty on rice imports for the second time in two months. The lower import duty has prompted purchases by private dealers, with most of the deals being struck with neighbouring India. Bangladesh produces around 34 million tonnes of rice annually but uses almost all its production to feed its people. It often requires imports to cope with shortages caused by floods or droughts.