Bangladesh Govt Seeks 5 Lakh Tonnes of Parboiled Rice from India

Bangladesh has approached India to source at least 0.5 million tonnes (mt) of parboiled rice for distribution through ration shops on a government-to-government (G2G) basis. The Sheikh Hasina Wajed government has approached India's High Commissioner in Bangladesh for assistance, even though Dhaka has issued two tenders of 50,000 tonnes each to import parboiled rice, according to trade sources.

Tenders issued on December 6 and 12 will expire on December 21 and 17, respectively. Bangladesh approached India after a Dhaka delegation, including the Food Secretary and Director-General of the Food Directorate, scouted supplies in Vietnam, Thailand, and Cambodia last month.

Bangladesh has turned to India because it has been unable to find parboiled rice at a competitive price in these three countries. According to the sources, one of the four agencies (NAFED, NCCF, Kendriya Bhandar, and Kribhco Agri) could be shipping rice to Bangladesh on a G2G basis.

According to the Thailand Rice Exporters Association, Thailand currently offers parboiled rice at $468 per tonne, while Pakistan offers between $453 and $457. The prices for Indian parboiled rice are $373 and $377. Thailand's offer price has risen by $5-6 per tonne in the last two weeks, while Pakistan's rate has fallen slightly. On the other hand, prices in India have fallen by $1. Although the Wajed government claims to have ample rice stocks, it has begun importing rice on G2G and through private trade to avoid a crisis.

Rice prices in Bangladesh have risen recently as weather, floods, and drought have harmed the country's paddy crop. Because its exports have not been restricted, India may not have difficulty supplying parboiled rice to Bangladesh.

In its order restricting rice exports beginning September 9, the Centre banned shipments of fully broken rice and imposed a 20% export duty on non-basmati white rice.

Parboiled and Basmati rice are exempt from all tariffs. However, rice prices in the country have been rising due to concerns that the Kharif paddy crop will be lower than expected, as key growing regions in West Bengal, eastern Uttar Pradesh, Bihar, Jharkhand, and Odisha have been affected. Despite export restrictions and a 20% export duty, Indian rice remains the most competitive globally. On December 9, Minister of Agriculture and Farmers' Welfare Narendra Singh Tomar told the Rajya Sabha that rice prices in the domestic market have risen 8% year to date due to concerns about lower production in the Kharif season.

Rice production is expected to be 104.99 million tonnes (mt) this year, down from 111.76 mt last year, according to the Agriculture Ministry's preliminary estimate.  According to the Agricultural and Processed Food Exports Development Authority (APEDA), non-basmati rice exports increased to 8.96 million tonnes in the first half of the year, up from 8.23 million tonnes the previous year, with shipments fetching $3.03 billion, up from $2.97 billion. To manage a tight food situation, the Centre imposed restrictions on rice exports, with cereal stocks falling to their lowest since 2018 at 16.6 mt, alongside 19.65 mt of milled paddy (13.5 mt of rice) as of November 1.

Last fiscal year, India exported a record 17.26 million tonnes of non-basmati rice, earning 45,649.74 crore, compared to 13.08 million tonnes earning 35,448.34 crore in 2020-21. India's rice exports have been driven by record production in recent years. India produced 130.29 million tonnes of rice during the last crop year (July 2021-June 2022).