Bangladesh has extended a ban on the export of most varieties of rice until next June, the commerce secretary said on Thursday, backtracking on a plan to end the restriction.
Bangladesh, the world’s fourth-biggest rice producer, banned overseas shipments of some common varieties in May 2008 following a spike in prices. It banned all exports a year later.
“The decision to continue the export ban on common rice has been taken to ensure smooth supply of the staple food in the domestic market and to keep the prices stable,” said Commerce Secretary Mohammad Ghulam Hussain. In April, Bangladesh ended a ban on aromatic rice exports.
Finance Minister Abul Maal Abul Muhith said late last month the government was also planning to lift the ban on common rice to support farmers after record crops and bulging domestic reserves left prices below production costs.
A leading agricultural expert said it was necessary to lift the ban to boost domestic prices.
“Rice prices in Bangladesh have been below production costs since June-July last year. The government could lift the ban on a specific quantity for a certain time to boost prices,” said Mahabub Hossain, executive director at Brac, a non-governmental organisation.
Otherwise farmers would switch to other crops, said Hossain, also a former head of the Social Sciences Division of the International Rice Research Institute (IRRI), Philippines.
“We have 3 million tonnes of rice in surplus if government data is correct. And Bangladesh could gain as rice prices are also high in the international market,” he added.
Bangladesh produces enough rice to feed its population of 160 million but often requires imports to cope with shortages caused by calamities such as floods and droughts.
Rice prices are a politically sensitive issue, given that a third of the population live on less than $2 a day.
This year, Bangladesh is heading for record rice production of more than 34 million tonnes after two successive years of record output.
In 2011, Bangladesh was the fourth-largest importer of rice in the world with volumes of 1.48 million tonnes, according to the US Department of Agriculture, as dwindling stocks and rising prices led the government to import. It is not expected to import rice this year.
Meanwhile, tea prices in Bangladesh rose for the fourth consecutive session at a weekly auction on Tuesday on strong demand from buyers despite higher supply, brokers said.
The average price of Bangladeshi tea was 208.59 taka ($2.5) a kg against 206.69 taka per kg at the previous sale a week ago, an official at National Brokers Limited, the country’s largest tea broking firm said.