Story: There is no possibility of further reduction in the price of rice from the current level, that's what the USDA says

The US Department of Agriculture (USDA) said in its latest report on Bangladesh that rice prices are unlikely to decline from current levels for the marketing year (MY) 2024-25, which begins in May.

"This is due to higher costs of rice production, increased costs of seed, fertilizer, irrigation, labor and other factors," USDA's Foreign Agricultural Service said in a report on crops and food in Bangladesh released last week. ."Farmers have noticed that the cost of production has increased due to increase in fertilizer cost, irrigation cost and labor cost," it said.

The daily wage rate of daily labor was 30 to 40 percent higher this year during Boro paddy planting season than a year ago. USDA's forecast comes at a time when rice prices are rising. On April 15, prices of coarse grains, of the benchmark variety, were 6.25 percent higher year-on-year in the Dhaka retail market, reaching Tk 50 to Tk 52 per kg. Prices of fine grains also rose, according to market price data collected by the state-run Trading Corporation of Bangladesh.

Compared to a month ago, rice prices rose regardless of quality, TCB data showed. The US firm said the average retail price of high-quality non-aromatic rice remained high throughout MY2023-24. According to the USDA report, the average price of non-fragrant rice in March this year was Rs 68.5 per kg, which is 1.5 percent higher than the year.

"Since October 2023, coarse rice prices have risen marginally every month, primarily due to higher inflation and higher costs of milling and transportation. Even despite the good harvest of the Aman season, prices remain high," it said.

"Rice millers and traders point out that higher paddy prices increase the price of rice."
The report also said that the reduction of import duty from 62.5 percent to 15.25 percent by the government in February, as well as allowing the private sector to import grains, is unlikely to reap rewards.
"However, due to the high international price of rice and the depreciation of the local currency, private importers have shown little interest in importing rice," the USDA said.

It predicts that only 50,000 tonnes of rice will be imported for MY25 due to good yields in the current Boro season and the upcoming Aush and Aman seasons. It said it envisages minimal scope for private importers to import coarse rice in MY25 unless India allows non-basmati rice exports and withdraws export duty on non-basmati rice.

"Currently domestic rice prices in India are very high, therefore, even if India allows rice exports, the prices may not be attractive for Bangladesh to import," the US agency said.
"If rice prices from Thailand, Vietnam and other sources continue to rise and the currency continues to depreciate against the US dollar, private importers will not be interested in importing rice, as their total import costs will exceed the domestic price of rice."

The USDA, which has forecast an increase in rice production for MY25, said Bangladesh could only import coarse rice if the harvest is bad and local prices rise significantly. According to the report, the South Asian country is likely to harvest around 3.77 crore tonnes of rice in MY25, up 1.9 percent year-on-year. This is based on the assumption of favorable weather conditions, adequate supply of seeds and fertilizers and continued support from the Directorate of Agricultural Extension (DAE) under the Ministry of Agriculture, the report said.

Overall acreage is also projected to increase. The US agency has forecast the overall yield of boro rice, the first and main crop of the marketing year, to be 2.05 crore tonnes in MY25 as against 2 crore tonnes in MY24. It said farmers are cultivating some new varieties like Bri Dhan 84, Bri Dhan 92 and Bangabandhu Dhan 100 this Boro season due to better yield and high tolerance to stress and diseases.

"Farmers also apply adequate fertilizer which leads to a high yield of Boro season paddy. Farmers reported that there is no shortage of fertilizer in the market this Boro paddy season. Boro paddy planting and production increases slightly every year."
Till March 2024, farmers are expecting a good yield of Boro paddy in the field, it said.
"No natural disasters such as drought, heat wave, cyclone or pest outbreak have been reported yet."
USDA has also projected higher yields of Aush and Aman rice in MY25. -Editor at Online Information Reliance