Bangladesh has turned to Vietnam for import of rice following India’s reported refusal to begin exporting 3,00,000 metric tonnes of parboiled rice, announced during Bangladesh Commerce Minister Faruque Khan’s New Delhi visit last October.
New Delhi stopped the shipments as Bangladesh demanded a discount on the price, newspaper reports in Dhaka said yesterday.
Food Minister Dr Abdur Razzak yesterday told newsmen that Bangladesh is now set to sign a long term agreement with Vietnam to import rice from the world’s second largest rice exporting country.
Under the agreement, Bangladesh will import 3,00,000 to 5,00,000 tonnes of rice from Vietnam every year, Razzak disclosed.
After a meeting with Vietnamese envoy in Bangladesh Nguyen Van That at his secretariat office, the food minister said the agreement would be signed soon after an exchange of visits by delegations of the two countries.
Dr Razzak said this year Bangladesh signed an agreement with Vietnam to import 1,00,000 metric tonnes of rice at a cost of $379 for each ton and Bangladesh had already received 95,000 metric tons of rice.
He said Bangladesh would sign another agreement with Vietnam to import 1,00,000 metric tons of rice. The agreement is now under process and would be signed very soon, he said.
The food minister said Bangladesh will import 8.00,000 tons of food grains by December-January, out of which 4,00,000 tonnes will be rice and 2,00,000 tons wheat.
About 3,00,000 metric tonnes of rice and 2,00,000 tonnes of wheat would be imported from India, he said adding shipment of some rice and wheat has already been completed.
The minister said the government had decided to import food to increase stock and keep prices under control.
Newspaper reports in Dhaka saidyesterday , Delhi stopped supplying rice to Bangladesh as Dhaka wants a discount of $5 for each ton of rice to be bought from India, which India considers as a new situation after the deal and the Indian government is yet to take a decision on the matter.
Bangladesh wants to get the rice at $486.80 a tonne though in the middle of October it bought the same quality of rice from international markets at $491.80 a tonne.
To top it all, the Indian government-run public sector units (PSUs) which can export non-basmati rice (NBR) have asked the government to approve the sale of rice for Bangladesh.
Barely a month ago, Bangladesh Commerce Minister Faruk Khan was in India for discussions on trade between the two countries. India’s Minister for Commerce and Industry Anand Sharma announced that India would export 3,00,000 tonnes of parboiled rice and 2,00,000 tons of wheat. He was only reiterating the decision to supply rice and wheat to Bangladesh that followed a diplomatic request in August this year.
Indian move to supply rice and wheat was seen as a bid to strengthen ties with Bangladesh and also to enhance trade relations between the two countries, which is expected to reach $5bn in the next two years from the current $3bn.
While India understands Bangladesh’s urgency since there is a rice shortage in the country, the Indian government is taking its time over the shipments since the reduction in price would mean adding to India’s subsidy bill, the source in the commerce ministry said.
Also, Indian officials put forward a request that Bangladesh must inspect and approve the quality of the rice before it is loaded for exports. India wants to make it clear that it does not want any rejections of consignments or delays in unloading.
Papers quoted sources in the Indian Commerce Ministry as saying, rice exports to Bangladesh – in addition to the present 300,000 tonnes – will go up in the near future. According to a long-term pact that seeks to secure stocks and act as an insurance against any global shortfall, India is supposed to supply at least half-a million tons of grain each year. In fact, during March-May 2010, around 1,45,000 tonnes of NBR was authorised for exports through Indian PSUs to Bangladesh, Sri Lanka and Nepal.