Govt decides to lift duties on rice imports

The government is set to import a substantial quantity of rice and withdraw import duties to boost stock.
It has taken the step following rice production loss due to the recent floods, which caused prices to go up in the local market.
The National Board of Revenue (NBR) yesterday decided to withdraw all import duties and would issue an order (Statutory Regulatory Order) on Sunday.
Senior NBR officials told The Daily Star that the NBR has decided to withdraw the existing 25 percent duty on rice imports.
On top of this, the NBR would slash the advance income tax on rice imports to 2 percent from the current 5 percent.
The alarm bells have been ringing for quite a few days and there have been movements to expedite and facilitate rice imports.
On October 20, the NBR reduced import duties to 25 percent from 62.5 percent to help regulate the local rice market.
This week, the Directorate of Food submitted a report on the country’s overall rice stocks to the food ministry. Bangladesh Trade and Tariff Commission (BTTC) sent another report to food and commerce ministries, and the NBR about the rice price situation.
Both reports recommended withdrawing all import duties on rice to encourage imports.
Food ministry officials said Chief Adviser Prof Muhammad Yunus sat with the ministry officials, including Food Secretary Md Masudul Alam, on Wednesday where he directed them to take immediate steps for imports.
During the meeting, Yunus, also in charge of the food ministry, asked the secretary to identify potential countries from where the cereal can be imported, the production of those countries, and the prices there.
Masudul told The Daily Star that they would take all necessary steps to ensure the country’s overall food security and would act as soon as possible.
Food ministry officials said they have initiated efforts for both government-to-government (G2G) arrangements and open tenders.
Bangladesh have signed Memorandum of Understanding (MoU) with Vietnam and Myanmar for rice imports and the deals are valid till 2027, they said.
In addition, the Advisory Committee on Government Purchases recently eased public procurement rules for rice imports through open tender, reducing the required time to 15 days from 42 days.
The Advisory Committee on Economic Affairs has also decided, in principle, that the government would import 5 lakh tonnes of rice.
The current rice stock is 9.68 lakh tonnes, as per the data of the food ministry.
However, it is assumed that the recent floods caused a production loss of 8.39 lakh tonnes, said the BTTC report citing a report of the Department of Agricultural Extension.
To cushion the blow of high rice prices in the local market, the government has increased rice distribution among people with low income and an increased stock is required for this, food ministry officials said.
The BTTC report said rice prices in the local market have continued to rise despite declining prices in the global market.
As of October 26, rice prices in the global market dropped by 3.71 to 4.15 percent when compared to the prices on the same date the month before. The drop is over 11 percent from a year ago.
In the local market, prices of medium quality and coarse rice increased by 1.74 to 1.90 percent in a month and 7 to 9 percent in a year.
The BTTC said the price of coarse rice increased more than other varieties –Tk 2 to Tk 5 over a month.
The BTTC report said reducing import duty would encourage the private sector to import more rice and that it would not affect the local rice producers.
The Directorate of Food recommended importing 10 lakh tonnes of rice. Its report said that the government has allocated around Tk 3,000 crore for importing 3.50 lakh tonnes this fiscal year and an additional Tk 6,000 crore would be needed to import another 7.50 lakh tonnes.
A senior finance ministry official told this newspaper, “We will allocate additional funds, if necessary.”
The Directorate of Food report also said that the private sector could be encouraged to import rice.
According to the BTTC, Bangladesh’s annual rice demand is between 3.70 crore to 3.90 crore tonnes. Last year, the country had produced a record 4.06 crore tonnes.