The government has cut its high rice import target by 500,000 tonnes in the current financial year on the back of the "stabilised" local market.
The ongoing Boro harvest, the biggest source of rice crop, may be good thanks to favourable weather conditions which the food department believes will help further "stabilise" the market.
The government agency -- Directorate of Food -- now wants to shed 500,000 tonnes of rice from the revised import target of 1.5 million tonnes set, when prices of the staple food were rising abnormally in the local market following two flash floods in some major rice producing areas.
"Actually we had a big target for the current financial year but we think we no more need to do it as the market is already stable," said Badrul Hassan, director general at the Directorate General of Food.
Recently the retail prices of all types of rice remained stable in the local market.
The price of medium variety of rice in Dhaka is Tk 4400 a quintal and the coarse variety Tk 3740 a quintal. The finer variety is priced at Tk 5648 a quintal, according to the Department of Marketing (DAM), a government agricultural price monitoring agency.
Mr Hassan said the Boro procurement will start soon across the country which will bolster the government's buffer stock which fell significantly last year.
"We've a target to procure 1.0 million tonnes of rice during the ongoing Boro season which lasts from May to August," said the food department chief.
The department has fixed the procurement price of rice at Tk 38 a kilogramme (kg) and paddy at Tk 26 a kg, according to the food department.
The import target was raised following the food department's failure to procure 700,000 tonnes of rice from domestic sources after Boro harvests last season.
In the meantime, people familiar with the procurement at the department told the FE that so far just 1.0 million tonnes of rice were imported at a cost of over Tk 306 billion [one dollar equals Tk 84].
"There are some 20,000-30,000 tonnes more in the pipeline. We think after arrival of the consignments, there will no more import for the year," an official at the Directorate General of Food told the FE last week.
This cut, however, is a piece of good news at the government-level as the higher import of rice by the government agency was a matter of concern. The import target of 1.5 million tonnes of rice was much higher than its original budget estimation.
The Directorate General of Food's import plan of 1.5 million tonnes of rice was 150 per cent higher than the original estimate of 600,000 tonnes.
The rice procurement estimation was around Tk 21 billion in the budget.
And if there is no more import this fiscal, it would help save around Tk 25 billion.
However, in the meantime, the private sector has imported over 2.6 million tonnes of rice excluding the government import.
The food department usually handles around 2.0 million tonnes of food grains -- rice and wheat a year.
Of it, it procures 1.5 million tonnes of rice mostly from domestic sources. It also procures 500,000 tonnes of wheat "atap" rice to meet demand in some areas.
