Prospect of hitting boro rice purchase target remains clouded

The government's target to procure 1.8-million tonnes of Boro rice this year may not be achieved as the millers find the prices offered unattractive.

On Monday, food minister Shadhan Chandra Majumder through a virtual conference announced the official target to buy 1.0-million tonnes parboiled rice at Tk 40 a kg and 0.15-million tonnes of white (atap) rice at Tk 39.

The rice will be directly purchased from millers while a total of 0.65-million tonnes of paddy will also be bought directly from the farmers at Tk 27 a kg.

The procurement price for paddy has been increased by Tk 4.0 a kg and that of of paddy by Tk 1.0 a kg this year, disclosed Mr Majumder.

But millers said it would be hardly possible for them to supply rice to the government at the rate fixed by it.

Bangladesh Auto Major Husking Mill Owners' Association secretary KM Layek Ali said the minimum rate should have been fixed at Tk 43 a kg given the ruling market prices of newly harvested Aman paddy.

He said rice varieties like BRRI dhan 28 and Miniket/Jeera now cost them at least Tk 44 and Tk 48 a kg respectively.

Coarse Aman variety like Guti Swarna is now selling at a minimum of Tk 43 a kg at mill gates, he commented.

Mr Ali said hybrid and other coarse varieties would be available from mid-May when the government procurement would start on May 07.

"The then prices of such coarse varieties in the mainstream market might decide whether millers could supply rice at the government-fixed rate or not," he told the FE.

He said paddy production this Boro season has been affected severely by heat stress. The government should also keep this in mind.

Hazrat Ali, a Nilphamari-based rice trader, said millers have been hungry for paddy for the past four months amid low supply due to fall in Aman production.

"Millers and their agents are moving to fields and local haats (bazaars) to buy paddy to run their mills."

He said paddy harvest has begun in many places and farmers are able to sell crops even in their fields amid high demand and good prices.

The newly harvested BRRI dhan 28 is now at Tk 920-960 a maund (Tk 23-24 a kg) against the government's offered rate of Tk 1,080 a maund (Tk 27 a kg).

Despite having a Tk 120-160 difference per maund, the trader said, farmers would sell paddy at the market to avoid hassle. The food directorate has certain conditions regarding its direct purchase from farmers.

He, however, said rice prices have almost been static for a week now at rice-milling hubs as coarse varieties sold at Tk 43-44, medium BRRI dhan 28 (new) at Tk 45-47 and finer Miniket at Tk 54-Tk 58 a kg.

Value-chain expert and agricultural economist Prof Golam Hafeez Kennedy suggested the government immediately sit with millers to settle the purchase issue given the mainstream market prices of paddy and rice.

He said steps to raise asking prices is praiseworthy but the government should also be ready to review it to fulfil the procurement target as public rice stock dropped to one-and-a-half-decade low this April.

Terms and conditions for procuring paddy should be much easier so that farmers could supply their produce to public warehouses willingly, Prof Kennedy observed.

The food directorate should allow farmers to sell paddy even if these contain certain amount of moisture, he said.

"After purchase, there will be many ways to dry them up. But the first job is to raise the food stock immediately," he said.

The expert said authentic data on rice production should be released for applying timely import and export policies.

The government's rice procurement performance in the last Boro and Aman seasons fared very badly.

It had set a target to buy 1.7-million tonnes of rice and paddy in last Boro season but was able to purchase only 0.9-million tonnes.

In Aman season, it set to buy 0.85-million tonnes but procured only 0.085-million tonnes.

Bangladesh has currently a stock of only 0.31-million tonnes of rice which was above 0.9-million tonnes in the corresponding period of last year.

The government has also set a target to import 2.0-million tonnes of rice this fiscal year amid a fall in production in last Aman season.

Both private and state channels have brought in a total of 0.908-million tonnes in the last four months, which have hardly put any impact on the rice market.

Coarse rice variety has been retailing at Tk 48-52, medium at Tk 56-60 and finer at Tk 66-82 a kg for the past three weeks in Dhaka city.

The current prices of coarse and medium rice varieties are the second highest ever, according to the Trading Corporation of Bangladesh.

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