Bangladesh food stocks at 10-month high

Published 23 Jun,2021 via The Financial Express - Public foodgrain stocks climbed to a 10-month high of 1.3-million tonnes last week, thanks to significant progress in domestic procurement and state imports.

But market experts said higher stocks, three-year high import and a likely record output in the just-ended Boro season could hardly put any impact on the galloping rice market.

Prices of the staple continued to surge even during Boro harvest time, they observed.

Meanwhile, public food storage started increasing after it declined to a decade low of 0.45-million tonnes at the end of April this year.

Given the outgoing fiscal, the highest stock was recorded at 1.35-million tonnes at the end of August 2020 which fell to 1.26-million tonnes in September.

Of the current stock of 1.3-million tonnes, rice comprises nearly 1.0-million tonnes and wheat more than 0.3-million tonnes, according to food ministry.

According to a food directorate official, domestic procurement is going on in full swing.

He said 0.822-million tonnes of grain out of the 1.9-million tonne procurement target was met until June 21.

Of them, rice was nearly 0.51-million tonnes, paddy 0.217-million tonnes and wheat the rest 0.095-million tonnes, achieving above 43 per cent in the first two months of procurement.

Paddy procurement began on April 28 and rice on May 07.

The government has primarily decided to complete the grain purchase within August 31.

The official said the target could be achieved as market prices of coarse rice and paddy are still much lower than the government's asking rates.

The asking rates are Tk 39-40 and Tk 27 for one kilogram of rice and one kilogram of paddy respectively.

However, rice import is also a three-year high at 1.32-million tonnes so far in FY2021, he said.

The total import has been made just in the past four and half months from February to June.

The official said the government has so far imported 0.516-million tonnes of rice and the private sector 0.786-million tonnes.

Nearly 0.5-million tonnes of wheat have been brought this fiscal year also, he added.

However, agriculture ministry is expecting an all-time high of 20.5-million tonnes of rice output this Boro season which meets 56-58 per cent of rice demand.

Meanwhile, rice and paddy prices started rising from the last week of May during the peak harvesting season.

Prices have also showed a notable hike at city retail outlets in the past two and half weeks.

Both paddy and rice prices have risen by Tk 4.0-5.0 per kg in the past three weeks in hubs like Kushtia, Naogaon, Pabna, Dinajpur, Rangpur and Nilphamari.

Hybrid paddy price mounted to maximum Tk 880 a maund, medium variety BRRI dhan-28 to Tk 960 and finer quality Zira/Miniket to Tk 1,120 in rice growing hubs-up by Tk 150-220 per maund, according to the Bangladesh Auto Major Husking Mill Owners Association (BAMHMOA).

Hybrid rice was selling at Tk 38-39, BRRI dhan-28 rice at Tk 46-47, Zira/Miniket at Tk 51-54 a kg at Naogaon, Nilphamari, Kushtia, and Dinajpur mills for a one week.

Coarse rice retailed at Tk 46-50, medium at Tk 55-58, and common finer at Tk 65-75 a kg in Dhaka on Sunday, according to grocers.

BAMHMOA secretary KM Layek Ali said millers have started buying paddy in large volume from the first week of June for their market operation for the next two months, resulting in a price surge to some extent.

Both millers and the government are now procuring paddy which has caused this price hike, he told the FE.

"Rice and paddy prices started rising notably even during peak harvesting season and the surge continues which is not a good sign," said value-chain expert Prof Golam Hafeez Kennedy.

The current food stock is good but it should be at 1.5-million tonnes considering the pandemic which fuelled food prices globally to an 11-year high, he mentioned.

The economist suggested that procurement from the domestic market be fulfilled at any cost.

He said import by the private sector should also be restarted from July if this price surge continues.

Both importers and millers should be brought under strict monitoring to curb any artificial hike.

Prof Kennedy said public food storage, especially rice stock, should always be at above 1.0-million tonnes.

Poor rice storage encourages millers and other big players to manipulate the market and fix price at their sweet will.

"Authentic data on local rice production in the just-ended Boro harvest should be released within June 30 so the government could apply a timely rice import policy from July 01."

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