The imposition of 10% tax on the import of rice has a positive effect on the Bangladesh rice prices and has pushes up the prices since 10th May when the taxes were started implementing.
Some rice millers import rice from India at lower prices and sell within the country at low prices. On the other hand the millers who do not import the rice sell their rice at higher prices than that of importer millers and due to high prices their stocks does not clean out and they are left with huge stocks and has to cut down rice production in their mills.
The import volume has been raised since the new fiscal year has started. As of May 12, Private traders have imported about 1.36 million tons of rice which is about 3.6 times higher than 374,560 tons imported during whole FY 2013-14.
Prices were severely affected in the beginning of the Boro harvest seasons as the import increases. The imposition of taxes has affected the prices in positive way. The prices of BR-28 boro paddy are increasing in the market. A week ago a particular variety of Boro had been selling at Tk400-Tk 500 per 40 Kilogram and now it is at Tk 575-Tk 650 per 40 Kilogram.
The prices are likely to further increase as the government’s procurement drive will start on 30 May. The government has decided to purchase one million tons of Boro paddy and 100,000 tons of Boro rice in four month time period(1st May-31st August,2015).
The prices for Boro paddy are fixed at Tk22 per kilogram and that of Boro rice at Tk32 per Kilogram. The expected output this year of Boro crop is around 19 million tons.
Bangladesh produces around 34.449 million tons of rice, basis milled in FY 2013-14 up about 2.7% from around 33.833 million tons processed in FY 2012-13.