Officials say that the exports are to replenish reserves and cool domestic prices. The country anticipates a fall in the production of rice following floods in large parts of the delta nation in recent months.
In a major decision to import foodgrains, Bangladesh has decided to import a total of 330,000 tonnes of rice Vietnam and India. Alongside a parallel deal is being settled with Russia for the import of 500,000 tonnes of wheat.
The announcement came Wednesday afternoon, after a meeting of the cabinet committee on public purchases. The committee gave the in-principle go-ahead for finalising the purchases.
Import duties on the foodgrains too have been slashed from 25 per cent to 15 per cent, again with a view to rein in rising prices.
Officials say that this is being done to replenish reserves and cool domestic prices. The country anticipates a fall in the production of rice following floods in large parts of the delta nation in recent months.
The country of 165 million people is seeing food prices soar and the government, wary of the political repercussions of inflation, plans to expand the distribution of subsidized or “cut-price” rice to help people hard-hit by high costs.
230,000 tonnes of rice will come from Vietnam. Another 100,000 tonnes of rice will be sourced from India. Officials are still negotiating the price with Vietnam because the cost of Indian rice is much less. from India is costing less.
Besides importing rice from Vietnam and India, Bangladesh is also negotiating rice imports from neighbouring Myanmar. Relations between Bangladesh and Myanmar have been frosty over the Rohingya refugees in Bangladesh.
Bangladesh is itself a leading producer of rice, producing about 35 million tonnes annually, all of which provides for its own population. 5 million Bangladeshis live on subsidized rice rations.
Russian wheat in US Dollars
The wheat will be purchased against US dollars and cost the government US$ 430 for a tonne of wheat (Bangladesh has been guarded in its use of foreign exchange ever since the Sri Lankan economic crisis).
It has been agreed that a Russian company will handle the procurement of the wheat.
The decision to import wheat from Russia has been a difficult one for Bangladesh, an official explained, considering a possible backlash from the US and European capitals. Russia had much earlier offered Bangladesh wheat and petrol.
Speaking in Parliament on Wednesday, Prime Minister Sheikh Hasina said that the COVID-19 pandemic and the war between Russia and Ukraine have created fears of a negative impact on Bangladesh’s balance of payments.
She was responding to questions from MPs. She noted COVID-19 and the war have slowed down global economic growth, disrupted the supply chain and led to a hike in the prices of fuel oil and other commodities and impacted freight charges globally.
Besides, she said, Bangladesh’s exports too have also slowed down while incoming remittances by Bangladesh workers have declined.