- Bangladesh emerges as major rice importer
- Rushes to build stocks to avoid crisis amid food fear
DHAKA (Reuters) - Bangladesh will buy 200,000 tonnes of rice from Vietnam in a government deal as the South Asian country seeks to ensure supplies of the staple during record global food prices, a senior official said on Friday.
The likely price for 100,000 tonnes parboiled rice is $575/T including cost and freight and for 100,000 tonnes of 15 percent broken white rice $530 a tonne, Ahmed Hossain Khan, director-general of the state grains buyer, told Reuters.
Bangladesh has moved to build stocks of staples such as rice and wheat like other nations from Africa to Asia to combat surging food costs and avoid future supply shocks.
“Our top priority is to ensure food security amid tight supplies and record prices and ward off domestic price rises,” Khan said.
In January, the government paid a higher cost to import 250,000 tonnes of rice from Vietnam.
The price for 200,000 tonnes of 15 percent broken white rice to be supplied by Vinafood 2 was $545 a tonne, including cost and freight, compared with $389 per tonne it paid in August while the price for the remaining 50,000 tonnes of parboiled rice was $550 per tonne. [ID:nL3E7C70CW]
The price for parboiled rice is higher than the last time but less than the price of $580 a tonne, including cost and freight but excluding insurance, which Bangladesh will pay for same grade parboiled rice from Thailand.
Although the world’s fourth-biggest rice producer at 34 million tonnes, Bangladesh has emerged as a major importer this year and is desperately looking for dependable sources.
Global food prices hit a record high in February, the United Nations said on Thursday, warning that fresh oil price spikes and stockpiling by importers keen to head off popular unrest would hit already volatile cereal markets.
Although neighbouring India, once its traditional supplier, has recently lifted a ban on some premium variety rice, Bangladesh will not benefit as it buys mostly lower quality rice, traders said.
India is ready to supply 300,000 tonnes of rice to Bangladesh under a government deal.
With growing public discontent over prices, the government has increased its discount grain distribution target to 3 million tonnes for the year to June from 2.7 million, adding pressure to the budget.
The government, already battling high food inflation of 11 percent, would have to release 400,000 to 450,000 tonnes of grain a month from its reserves due to expanded cut-price rice sales and other welfare programmes, Khan said.
Government grain stocks stand at 915,000 tonnes and ships with 220,000 tonnes of rice and wheat are at ports or on their way, he said.
Rice prices, which have risen by more than 33 percent over the past year, fell slightly this week after the government vowed to take tougher action against stockpiling and hoarding by millers and middlemen.