Bangladesh seems to have more faith in the Indian cooperatives besides opting for the conventional safety-first measure in importing two lakh tonnes (lt) of parboiled rice from India. 

Last week, Bangladesh’s External Procurement wing of the Directorate of Food issued a letter of intent (LOI) to NCCF (National Cooperative Consumers Federation of India Ltd) and Kendriya Bhandar (Central Government Employees Consumer Cooperative Society) to buy one lakh tonnes of parboiled rice.

The rice is being imported from NCCF at $433.60 a tonne and at $433.50 from Kendriya Bhandar, according to trade sources. This is over $35 higher than the most competitive bid made by Singapore’s Agrocorp International Pte Ltd in a 50,000 tonnes global import tender for parboiled rice that was opened on Tuesday by Bangladesh’s Directorate of Food.

‘Vote of confidence’

Trade sources said Agrocorp offered the rice at $397.03 a tonne, while India’s Bagadiya Brothers, which was the lowest bidder in the tender that was opened last week, quoted $400.01 while Haldia Ventres Limited, a listed firm, quoted $428.94. The price is, however, higher than the offers made in last week’s tender.

“The order was placed at a price higher than the most competitive bid for a $50,000 global import tender floated by Bangladesh. This is a vote of confidence for the cooperative sector since the order has been placed in view of the faith the Sheikah Hasina Wajed government has in these agencies,” said Delhi-based trader Rajesh Paharia Jain.

“Bangladesh wants the rice consignments in two months’ time. It also wants rice from the new crop. Had it given more time or opted for an older crop, it could have got it at a lower price,” said official sources. 

The problem with placing orders for a huge quantity is that there is no guarantee of delivery since private traders are bidding aggressively and are settling for a lower margin.

Protection against ban

“This can lead to these traders cancelling at the eleventh hour or not meeting the deadline,” a trading source said. 

“NCCF has been involved in such G2G over the last couple of years. We completed one last month,” the official source said. 

The trading sources said Bangladesh needs rice supplies quickly since all its three crops have been affected by weather, first by floods and then by deficient rainfall. 

The Wajed government has been scouting in countries such as Thailand, Vietnam and Cambodia for parboiled rice supplies but its efforts have been in vain. In view of Dhaka not getting any assurance from these three origins, it turned to India. 

“Bangladesh has also opted for G2G to protect itself from any ban that India might resort to in case of lower production or procurement of rice not meeting target. We saw how ban on wheat caught everyone off guard,” said Jain. 

Still competitive

Though Bangladesh is offering cooperatives a higher price than the offers it got for the global tender it floated, it is still lower that the rates quoted by Thailand and other countries. 

Thailand is offering parboiled rice at $487 and Pakistan is quoting $453-57 a tonne free-on-board. Private traders in India are offering parboiled rice at $380 a tonne. 

Indian rice prices are competitive despite the Centre curbing the cereal’s shipments from September 9. Exports of fully broken rice are banned, while shipments of white (raw) rice attract 20 per cent export duty. 

India announced the curbs as kharif planting of paddy was affected by deficient rains in key growing regions such as West Bengal, Bihar, Odisha, Jharkhand and eastern Uttar Pradesh. 

According to the Ministry of Agriculture, kharif rice production is estimated at 104.99 million tonnes (mt) compared with 111.76 mt a year ago. China, the Philippines and Indonesia are scouting for rice supplies besides Bangladesh.

According to reports from Africa, even low-cost meals are turning pricier in view of the rise in rice prices. Liberia has raised the price of a 25-kg bag rice by $17 to cut subsidies, while in Nigeria the price of a 50-kg bag of rice has increased by 54 per cent.

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