Bangladesh has drastically reduced the import tariff on rice in order to encourage imports of the staple grain and increase its supply in local markets.

Traders can now import rice by paying 25 percent of each shipment's value as taxes, down from 62.5 percent previously, according to a statutory regulatory order issued by the National Board of Revenue (NBR) yesterday.

The duty cut comes as recent flooding has affected the ongoing cultivation of Aman paddy, the country's second biggest rice crop, raising concerns over a supply crunch in coming days.

With this reduction, the import cost for each kilogramme of rice will decline by Tk 14.40, the NBR said.

The NBR informed it has cut the duty to boost the supply of rice, thereby keeping its price at a tolerable level while also ensuring food security in the country.

The new rate comes into effect immediately, the NBR said.

However, importers must get approval from the food ministry to enjoy the benefit, it added.