The Ministry of Food has proposed cutting the import duty on rice further by 10 per cent to 15 per cent with a view to encouraging traders to import the staple in higher volume, sources said.
The move for slashing import duty came at a meeting held by the food ministry at its office recently with food minister Sadhan Chandra Majumder in the chair.
The meeting also considered reducing import duty on coarse white rice (coarse atap) to 15 per cent from the 62.5 per cent.
In December, the government cut the duty rate by 37.5 percentage points to 25 per cent on import of parboiled rice.
The duty on rice import was increased to 62.5 per cent earlier to discourage rice imports and benefit local farmers.
The government has already allowed import of over 1.0 million tonnes of rice through the private sector. But the volume of rice import is still negligible, said food ministry officials. Despite import of rice, the prices of rice has been on the rise in recent weeks.
The government has already extended the timeframe of opening letters of credit (LCs) thrice due to poor response for import rice from the traders and importers concerned, according to the ministry.
A total of 320 traders and persons have so far got permission for procuring a total of over 1.0 million tonnes of rice.
Of the volume, only 0.15 million tonnes have entered the country, the ministry data showed.
To date, traders concerned have opened LCs to import only 0.6 million tonnes of rice.
According to the food ministry, it requires around 1.6 million tonnes of rice and 0.45 million tonnes of wheat until June 2021 for its social safety net programme.
But currently the government's rice and wheat stocks stood at only 0.53 million tonnes and 0.11 million tonnes respectively.
The meeting observed that it was difficult to contain the prices of rice due to the reduced supply of imported rice in the local market.
Coarse and medium varieties of rice are now selling at Tk 44-55 a kg at retail level in the city, trading sources said.
Finer varieties of rice are now selling at Tk 65-82 a kg at retail level, they added.
The prices of coarse rice went up by 37 per cent in a year, according to the Trading Corporation of Bangladesh (TCB).
Bangladesh Rice Research Institute (BRRI) in its report said rice production witnessed a 10 per cent decline during the Aman season in the current fiscal year. Consecutive floods and cyclone Amphan caused a production of about 1.4 million of tonnes of rice in the last fiscal year.
Experts and traders said duty cut might improve the supply situation and reduce the prices of the main staple in the domestic market.
According to the United States Department of Agriculture (USDA), Bangladesh's rice production has fallen by 1.05 million tonnes in the current marketing year than that of last year.
The USDA has projected Bangladesh's total rice output to be 34.05 million tonnes for the 2020-2021 marketing year compared to 35.85 million tonnes in the previous year, revealed the USDA report on Grain and Feed Update for Bangladesh.
The report attributed such fall in the rice production due to flooding and heavy rainfall.
Bangladesh's Ministry of Food recently procured rice through its annual rice procurement programme. As of January 31, 2021, the GoB procured a total of 54,599 tonnes of Aman rice, including 7,187 tonnes of un-milled rice, 47,536 tonnes of parboiled rice, and 2,286 tonnes of sun-dried white rice, it mentioned.