The forecast for Bangladesh rice imports was lowered to 1.2 MMT for 2018 in response to tariff policy changes. The government announced the reinstatement of a 25 percent import tariff, coupled with a 3 percent supplementary tariff, effective June 7, 2018.
The combined 28 percent tariff on rice imports was lowered to 2 percent in 2017 after flooding caused major crop losses, spurring a surge in imports. Bangladesh imports rice to supplement its domestic production.
Over the last 10 years, imports have fluctuated dramatically from year to year, with 2017 being the largest during that time. After the crop losses in 2017, domestic prices spiked.
In an effort to curb rising rice prices and bolster stock levels, the government reduced the tariff to 10 percent in June 2017 and then further lowered the tariff to 2 percent in August 2017.
Consequently, imports more than doubled from June to July and increased by almost a third from August to September. India, Vietnam, and Burma were the first to supply rice under the lower tariff, but India eventually became the dominant supplier.
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Thailand gradually started exporting, becoming the second-largest supplier, while Pakistan exported a small amount during that time.
Imports have declined in 2018 so far but are still above last year under the higher tariff. According to the government, domestic prices of paddy have been lower than the cost of production for local farmers this season.
The Bangladeshi Finance Minister said that the tariff had to be restored to raise prices in order to keep rice farmers interested in growing rice in the next season. Rice is the primary staple in Bangladesh; although, wheat consumption has been rising in recent years.