Banning rice export
It is good to learn that the government has banned export of rice. The Daily Star on December 5 quoted a statutory regulation order (SRO) of the commerce ministry issued at the end of November, which prohibited export of rice, both aromatic and non-aromatic, till December 31, 2009.
It seems that the factors which have influenced the government to take this decision are:
-Uncertainty about achieving the aman production target this year;
-Keeping the rising prices of rice in the domestic market under control;
-Ensuring availability of rice in the domestic market;
-India's ban on rice export, which has been the most important source for importing rice by Bangladesh; and
-Rising trend in the prices of food grains in the international market.
Minister for food and disaster management, Dr. Abdur Raqzzaq, said last September that the government was considering allowing export of rice, both aromatic and non-aromatic, and the final decision would be taken after observing whether any natural calamity affected aman production.
There was criticism at that time against the government's proposed move. The points made by the critics were:
-Annual population growth rate was outpacing annual food production rate in the country;
-Inconsistency in the food production in the country on year to year basis;
-FAO's forecast of contraction in rice production in few countries, including Bangladesh, in 2009-10;
-The difficulty faced by the government in importing rice in 2008 due to restrictions imposed by most of the rice exporting countries, resulting from the worldwide shortage of food grains and their very high prices in the international markets;
-The world's second largest rice grower India's decision to join the club of rice importing countries visualising a minimum reduction in her rice production by 15 million tonnes in 2009-10 due to severe drought compared to last year's ( 2008-09) production; and
-Uncertainty about natural calamity that might affect aman production in the country.
Harvesting of aman paddy has already started. Available reports suggest that there is hardly any possibility of achieving aman production target of 12 million tonnes this year due to drought-like situation at the time of transplantation of aman in the country's northern region, known as the granary of the country.
Actually, less rain was observed throughout the monsoon season. Further, there are reports about the decline in the area of cultivation of aman perhaps, as a reaction to low prices received by growers last year.
There is already a rising trend in the prices of rice in the domestic and international markets. Food and disaster management ministry's (MOFDM) Fortnightly Foodgrain Outlook dated November 24 shows that both Dhaka city wholesale and retail prices picked up by 3.4% and 4.5% respectively in the fortnight ending on November 19.
The Financial Express on November 22 writes that the country's food inflation rose to 4.98% in September from 4.93% in August on point-to-point basis mainly due to increase in the prices of essential items, including rice, during the period.
The IMF team which visited the country last October warned Bangladesh that excess liquidity and resurgent international commodity and food prices might push inflation to double-digit by the year-end.
In the wake of the UN food summit (November 16-18, 2009) in Rome, the UN food envoy Olivier De Schutter gave a grim picture about rice prices in the near future. He warned that a new food price crisis was likely to develop as the world leaders hadn't tackled the key factors -- speculation and bio-fuels -- responsible for the price spike in 2008.
World Bank President Robert Zoellick recently said that excess liquidity in global markets was driving up prices of farm products, which could be dangerous in the near term. Since last year's (2008) record levels, prices of staple commodities like rice and wheat have fallen, but market watchers believe new spikes are all but inevitable.
MOFDM's aforesaid Fortnightly Foodgrain Outlook shows that the prices of Thai 100% parboiled rice and 5% parboiled rice continued rising up to $592 per tonne (+0.8%) and $577 per tonne (+ 4.0%) respectively in the fortnight ending on November 16.
According to climate change experts and agricultural scientists, variability of temperature and rainfall pattern in Bangladesh exhibit early signs of climate change. There was less rain than normal during June-July this year, the peak time for transplanting aman paddy. The rainy season surprisingly started this year in mid-May instead of the first week of June. Winter usually starts from the first week of November but temperature is still higher than normal. This erratic rainfall and deviation in temperature will affect our production of food grains, starchy tubers, vegetables, pulses, fish etc.
It appears from the above that the time is not yet ripe for exporting rice. So, the ban on rice export should continue beyond December. Food security of the people of the country must be the prime consideration. Exporting rice may be considered at an appropriate time.
M. Abdul Latif Mondal is a former Secretary.
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