Govt bans aromatic rice export to control price  

Infographic: TBS

The government has finally banned the exports of aromatic rice after it failed to control the price in the local market.

Upon request from the food ministry, the commerce ministry has cancelled the aromatic rice export permission of 41 companies.

In a letter on Wednesday, the ministry asked the National Board of Revenue (NBR) to take necessary steps to prevent them from exporting rice.

The commerce ministry had earlier allowed 41 companies such as Square, Pran, ACI, Ispahani and Citi groups to export a certain amount of aromatic rice till December 2022.

Following the ban, the companies that have not yet exported within the approved quota will no longer be able to ship, officials at the ministry told The Business Standard.

Square Group had received approval to export 3,000 tonnes of aromatic rice this year. Owing to the government's latest decision, the company will not be able to ship the amount it had planned to do so till December this year.

Calling the ban "suicidal", exporters say, "If we suddenly stop exporting, we will lose both the market and the buyers."

According to the export policy order, the export of rice from Bangladesh is prohibited. However, there was an opportunity to export aromatic rice with the prior approval of the commerce ministry.

In this context, different corporate groups and businesses were exporting fragrant rice to about 136 countries including the United Arab Emirates (UAE), Europe, America, the United Kingdom, Malaysia, Singapore, Brunei and South Korea.

Bangladesh started exporting aromatic rice from fiscal 2009-2010 by shipping 663 tonnes that year. In the following years, the volume of exports increased to 10,879 tonnes in fiscal 2019-20.

Exports fell slightly to 9,517 tonnes in the last fiscal year due to the Covid-19 pandemic.

In a letter to the commerce ministry, the food ministry said the price of rice in the country's market has been rising since 2020 due to the pandemic. And it fluctuated at different times, reaching its highest point in October of that year and remained unchanged until December.

From the beginning of 2021, the prices of all types of rice had been rising again and in November-December, the price of coarse rice stabilised. But the price of medium, fine and aromatic rice is constantly rising.

In the letter, the food ministry further said that the monitoring activities of the local administrations, as well as field-level officials of the food directorate, are continuing to keep the market price of rice under control.

Besides, the Directorate of National Consumers' Right Protection is also conducting operations on a regular basis. Even then, the market price of aromatic and fine rice is on the rise.

"The matter is worrisome, which needs to be controlled. That is why the export of all types of rice including aromatic rice must be stopped for the time being," said the food ministry.

Last year, the price of Chinigura, Kalijeera and Kataribhog rice varieties was Tk70-80 per kg in the local market. The price of these types of rice has increased by about 70% in one year and now it is being sold at Tk120-130 per kg.

The government carried out nationwide operations to control the market price of rice and found excessive stocks of paddy in the warehouses of different companies such as Square, Akij, ACI, Citi and Pran groups. Of these, the administration found 5,140 tonnes of aromatic paddy in a warehouse of Square Group in Dinajpur, sealed it and filed a case against the company.

Square Group later said in an application to the commerce ministry that it had the approval to export 3,000 tonnes of aromatic rice by next December. Moreover, it also markets aromatic rice under the brand name "Chashi" in the local market.

Anjan Chowdhury, managing director of Square Food and Beverages Limited, fears that the aromatic rice will lose its market due to the export ban.

Both export and production of aromatic rice have increased in Bangladesh.

According to the agriculture ministry, 7,66,305 tonnes of aromatic paddy were produced in fiscal 2018-19, which has increased to about 17,75,178 tonnes in the last fiscal year.

However, the demand for this rice has also gone up in the local market as the purchasing power of the people of the country has increased. The use of aromatic rice is also increasing in making various types of fast food items as well as polao, finni, pitha, payes and khichuri.

Food Minister Sadhan Chandra Majumder has blamed the corporates for the rise in the price of aromatic rice in the country.

He said the crisis was created in the open market after the companies bought and stocked all the paddy from the market. Cashing in on the opportunity, the companies sell the rice at high prices by packaging it.

Criticising the government's decision, Md Shah Alam, president of the Bangladesh Rice Exporters Association, told The Business Standard, "The decision to stop the export of aromatic rice is suicidal. Because no one in the country eats it as the main food. And as we continue to enter the markets of different countries, this decision to stop exports will push us into the backseat again."

Md Faridul Hassan Chawdhury, founder president of the association, told TBS, "Our production is much higher than the demand, farmers also get good prices due to exports. So the decision to stop it doesn't seem very logical. Because it is possible to import three kg of regular rice with the money obtained by exporting one kg of aromatic rice."

"Bangladesh was creating a place in the European market where Pakistan has a monopoly business. But if the ban lasts for a long time, our position will dwindle. Because buyers will find alternative markets and start importing from there. Once buyers are out of hand, it is very difficult to bring them back," he added.

"We have certain buyers, we have a market," Md Kamruzzaman Kamal, director of Pran-RFL Group, told TBS. "If we suddenly stop exporting, we will lose the market."

According to the food ministry, the procurement target set by the government for the current Aman season is not being met. This season, the government procured only 63,800 tonnes of paddy and 584,000 tonnes of rice against the target of 3 lakh tonnes and 5 lakh tonnes respectively.

On the other hand, the government targets about 17 lakh tonnes of paddy and rice collection during the Boro season. However, due to high rice prices, the government fears that the collection target will not be met even in the current Boro season.

At a recent meeting of the food ministry, Sadhan Chandra Majumder raised fears that the collection target would not be met. After that, the government initially decided to import 10 lakh tonnes of rice.

The government has also reduced the import duty on rice and started the process of allowing different companies to import rice.