Traders, importers eat up benefits

Rice prices defy big cut in import duty

| Updated: October 23, 2017 14:56:22

Rice prices defy big cut in import duty

A big cut in import duty on rice has hardly made any impact on the prices of the major staple in the city markets.


Market observers said big importers and traders are cashing in on the duty slash, depriving limited income people of buying rice at low prices.


Though the government reduced the import duty on rice to only 2.0 per cent in August last, the prices of coarse rice were still hovering between Tk 46 and Tk 48 a kg at retail markets, according to trading sources.


Rice production was expected to decline by 2.0 million tonnes in the last Boro season amid flash flood in the haor and northern regions.


In June last, the government cut the import duty on rice to 10 per cent from 28 per cent earlier and again reduced it to 2.0 per cent last month aiming to raise the supply of the staple in the flood-hit country.


However, import of rice increased sharply in the first two months of the current financial year following a significant cut in the import duty, according to official data.


The food ministry's data showed that private importers brought 0.401 million tonnes of rice just in last 60 days of the current financial year (FY'18) when total import was 0.133 million tonnes in FY'17.


L/Cs (letters of credit) have been opened for importing another 0.15 million tonnes of rice which will be brought into the country within a month.


However, the government also imported 0.14 million tonnes of rice this fiscal year while another 1.36 million tonnes of rice will be brought into the country gradually, food ministry officials said.


Rajib Kumar, a Dinajpur-based importer, told the FE that they were now selling imported Swarna at Tk 36 a kg which was Tk 40 three weeks back.


He said imports surged significantly as the government eased the duty.


However, he informed the FE that importers in Dhaka have also been bringing a good volume of rice through Benapole land port this year instead of buying from the third parties.


The low-priced imported rice was yet to make any impact on the city markets.


Key coarse variety Swarna was selling at Tk 48 a kg while hybrid varieties at Tk 45-Tk 46 a kg at retail markets in Dhaka for last two weeks.


Price of medium quality Brridhan-28 remained static and it was trading at Tk 50-Tk 52 a kg.


The prices of finer varieties like Miniket and Jeerashail declined only by Tk 1-Tk 2 after the Boro harvest.


Miniket was selling at Tk 54 to Tk 62 a kg.Md Ibrahim Ali, a grocer at Kathpotti in Mohammadpur, told the FE that the prices of coarse and medium quality rice dropped only by Tk 0.40 to Tk 0.75 a kg in last two months at major wholesales.


"We have come to know that the government has reduced the import duty on rice, but didn't find any sign of it in the wholesales," he said.


"I bought Swarna rice at Tk 2350 a 50-kg sack at Mohammadpur Krishi Market two days back which was Tk 2360-Tk 2370 in June last," he said.


Consumers Association of Bangladesh (CAB) Secretary Humayun Kabir Bhuiyan said big importers and traders in Dhaka were pocketing hefty profits, depriving the limited income consumers in the capital.


He said the import cost for Swarna is maximum Tk 37 a kg now but it is trading at Tk 46-Tk 48 a kg in city markets.


"Hybrid varieties are trading at Tk 37-Tk 38 a kg at mill-gates but selling at Tk 46 a kg at city retails," he said.


The government should step up its monitoring to minimise a huge gap between import costs and retail prices to give the low income people some sort of relief, he said.


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