Govt again extends rice import deadline

The food ministry has again granted more time to business to open letters of credit (LCs) for importing rice as shipments continue to be very low while prices of the grain are rising due to the recent spike in fuel costs, according to a notice on Wednesday.

Importers who got permission from the ministry to import rice will be able to open LCs until September 29 this year, the food ministry said.

The previous deadline for opening LCs would have expired on August 21.

The announcement comes as the appetite for starting import procedures remains low among permit winners for the soaring cost of US dollars, which reduces their prospect for profit. Private and public agencies opened LCs to import nearly 129,000 tonnes of rice since July this fiscal year.

However, only 26,850 tonnes of the grain have entered Bangladesh between July 1 and August 14 even though the government gave permission to private firms to import nearly 10 lakh tonnes and market it before the harvest of the aman crop in the November-December period.

With this backdrop, the food ministry has extended the deadline by a month until September 29.

Food Secretary Md Ismiel Hossain said private firms were initially not too interested in importing rice but the situation has since changed after petroleum prices went up in the local market.

"The demand for rice has grown in the domestic market because of increased fuel prices. We are now hopeful that imports will rise," he said.

In order to encourage imports to contain prices of rice, which poor and low-income people already spend most of their income on, the food ministry also urged the government to provide full or partial removal of import duty and taxes on the grain.

An official of the National Board of Revenue (NBR) said they are examining a proposal for lifting the 15 per cent regulatory duty on rice.

On June 23 this year, the customs authority reduced the import tariff on rice to 25 per cent from 62.5 per cent to encourage imports and increase supply so that local prices cool off.

Importers with permission from the food ministry will be able to import rice by paying the duty until October 31 this year.

On Wednesday, consumers in Dhaka city had to pay up to Tk 80 per kilogramme of fine rice, up 7 per cent from Tk 75 a month ago, according to market prices data compiled by the Trading Corporation of Bangladesh (TCB).

Consumers had to pay as much as Tk 54 to get a kilogramme of coarse grains, which was up 4 per cent from a month ago, TCB data showed.