A delayed monsoon, lower rainfall and heatwave have had an impact on two rice seasons in Bangladesh this year resulting in up to a 5% decrease in yields than initially projected.
Sources keeping track of the global rice market, however, noted that Bangladesh currently has a good rice stock, and the recent Indian ban on white rice exports will not affect Bangladesh adversely even if the latter has to import rice in higher volume than previously projected.
In its latest crop production report this month, the Department of Agricultural Extension (DAE) reported lower acreage of Aus rice cultivation.
DAE officials noted that lower rainfall and a heatwave hampered Aus rice cultivation in many areas of the country this year.
The Aus season rice is also called monsoon rice as the season heavily depends on rainfall. It is cultivated in limited locations in the country and contributes to less than 10% of the annual rice production.
Aus harvesting is currently underway and a final output picture will emerge soon.
A US Department of Agriculture (USDA) grain report published this week said that both the projections for acreage and production of Aus rice have recently been revised down from 1.1 million hectares to 1.05 million hectares and from 2.5 million tons to 2.4 million tons, respectively.
With a delayed monsoon season and a lack of rainfall in July, the DAE reported a 6% lower seedbed preparation rate than the seasonal target for Aman.
The USDA report noted that the farmers used supplementary irrigation to prepare their land and to flood the fields for the transplantation of seedlings.
The costs of irrigation vary by farmer, but the average cost is Tk2,000 per acre.
Aman, also known as post-monsoon rice, is traditionally fully rainfed; therefore, adequate and timely rain is important for good production.
The USDA grain report added that though there is no shortage of chemical fertilizers this season, farmers are having to pay slightly higher prices than the government rate to buy chemical fertilizers.
It said the forecast for Aman season rice harvested area and production has now been lowered to 5.75 million hectares and 14 million tons, respectively, 3% and 4% lower than the previous forecast of 5.9 million hectares and 14.6 million tons.
More imports
Given the new domestic rice output projection, it is expected that Bangladesh’s import requirement for the staple might go up to one million tons in the 2023-24 market year, much higher than an initial projection of around 0.6 million tons.
Rice imports require an import permit from the food ministry. Usually the government imposes high tariffs of up to 62.5% to discourage rice imports after the Boro season rice harvest every year. But when there is a shortage in supply or high prices of rice in the domestic market, the government reduces the tariff to 15%–25% and sometimes even lower than that if required and gives approval for rice imports.
Currently Bangladesh is not issuing import permits for rice.
However, the USDA report noted Bangladesh is likely to reduce the rice import tariff in October and issue import permits to private importers.
India is the leading source of Bangladesh’s rice imports. Last year Bangladesh procured 71% of its imported rice from India, followed by Thailand (17%) and Myanmar (12%).
On July 20, the Indian government banned exports of non-basmati white rice to calm rising domestic prices. Luckily, there will be minimal impact on Bangladesh as it imports very little white rice from India due to low demand for this type of rice. Usually Bangladesh imports parboiled rice from India in large quantities.
So India’s ban on non-basmati white rice exports is unlikely to affect the domestic market in Bangladesh as India has not banned shipments of parboiled rice.
Myanmar is contemplating slapping a temporary export ban on rice for 45 days from September 1, to rein in high prices in its domestic market.
Current stock
Rice stocks in public granaries usually fluctuate based on the government’s rice procurement programs.
The government buys rice to enrich its stocks after the Aman and Boro season harvests.
The government also purchases rice from the international market through open tenders and government-to-government (G2G) agreements.
According to the food ministry, as of early this month, total government-held rice stocks were 1.74 million tons, up 12% over the same period last year.