Agri Business

Bangladesh plans to set up rice silos, begin exports

M. R. Subramani Chennai | Updated on November 21, 2017 Published on May 31, 2013

India can try such storage, says consultant

In three years time, India could be up against another competitor in the rice market from the Bay of Bengal region. Bangladesh is likely to join Myanmar as a key rice exporter once its plans to set up a silo to store 1.5 million tonnes of milled rice.

“Bangladesh plans to set up a silo for milled rice under build, operate transfer basis. Under this, the Government will take over in a year or two in contrast to India where private players operate it for 20-30 years,” said Munishwar Vasudeva, Chief Executive Officer, Eco Agri Forum Consulting Services. Vasudeva is involved in getting the project done for Bangladesh.

The basic cost for setting up the rice silo in Bangladesh is likely to be $240 a tonne minus the land cost. The cost is higher compared with India. This is because the soil in Bangladesh is soft in some places, while the water table is high. Therefore, the cost of laying pile foundation is high. “It is at least four times costly,” said Vasudeva.

“We have finished the first phase which is from conceptualisation to preparing tender documents. The World Bank with Bangladesh is likely to float a tender by August and possibly the bidder could be shortlisted by October. After that it is a matter of 24 months, which means by end of 2015,” he said.

This is time limit that India has set to come up with 40 silos to store some two million tonnes wheat. Bangladesh’s effort come at a time when it is facing problems with rising rice production. During 2012-13, it produced 34.2 mt up almost half a per cent. At the same time, its rice imports, mainly from India, dropped to a 16-year low of 27,700 tonnes.

“Bangladesh is planning to export rice. But lack of sufficient warehousing and port infrastructure is hindering its plans. Once the silos are in place, it will be export,” Vasudeva said.

Interestingly, Bangladesh move to construct rice silos has come when Food Corporation of India is against constructing such storages. What is the problem in India? “It is the mindset of people here,” Vasudeva said.

According to J.S. Oberoi, Head of Infrastructure Projects, LT Foods Ltd, rice in is stored for the public distribution system in the form of paddy and then milled according to requirement. Therefore, rice silos may not be needed in India.

“Only small size silos can be constructed for rice since it tends to break more easily. The bin or the storage can only be in the range of 2,000-2,500 tonnes only,” said Oberoi. LT Foods is using such rice silos for its own captive use but without temperature and moisture control.

“We must change. We can store rice at a lower temperature of 15 degrees Celsius and a relative humidity level of 12 per cent so that it doesn’t break. Thailand has facility for such storage,” Vasudeva said.

“Of course, silos may have to invest extra on chillers but a rice silo will cost only one-and-a-half time more than a wheat storage that costs some $140 a tonne,” he said.

Milled rice’s endosperm is exposed to storing conditions during storage which reacts very fast with the humidity and temperature and has tendency to get spoiled. Rice stored specially in chilling condition can be stored for about three years.

Vasudeva says milled rice storage makes a lot of sense than even wheat. “China was doing bulk storage of paddy but it now is of the view that is more economical to store rice as paddy husk is about makes up 20 per cent, rice bran six per cent and broken 15 per cent. China will switch over slowly to storage of brown rice and later to milled rice to save operation costs,” he said.

According to the Food and Agriculture Organisation, post-harvest losses are more in rice than wheat and the solution is bulk handling and storage. It will make a lot of sense for India to store either paddy or rice in bulk preferably paddy.

Vasudeva was among the first one in India to convince basmati rice millers to store paddy in bulk since 2000 and today, all rice mills are conceptualised with steel silos.


Published on May 31, 2013
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