BANGLADESH – Continued government food assistance programs are expected to keep rice consumption high in the market year (MY) 2022/2023, a new report by the Foreign Agricultural Service of the US Department of Agriculture (USDA) has revealed.
According to the USDA, rice consumption for MY 2022/2023 is forecast at 37.0 million MT, up 0.8 percent over the MY 2021/2022 USDA official estimate.
The spike in consumption has among factors been attributed to food assistance programs for the poor impacted by the recent food price hike.
Population growth and Bangladesh’s feed industry’s use of broken rice as a filler in various feed formulas are the other factors driving the rise in rice consumption, according to the USDA.
Production is, on the other hand, forecast at 36.32 million metric tons (MT) 1.3 percent compared to the MY 2021/2022 USDA official estimates.
USDA officials assume favorable weather conditions, sufficient supply of seed and fertilizers, and continued support from the Department of Agriculture (DAE) to reach the expected rice production.
Rice prices to remain high
Even with a good crop coming into the market, USDA expects rice prices to remain high, continuing a trend that started during the onset of the COVID-19 pandemic.
A 23 percent increase in the domestic fuel price in November 2021 further aggravated the market price of rice, with high inflation also contributing.
Local media has also reported that large corporations have entered the rice business, which also drove the prices up due to stockpiling.
Government discourages imports
For MY 2022/2023, USDA forecasts rice imports to plummet to 700 thousand MT, with the expectation of a bumper Boro rice harvest in April and May 2022.
In addition, the Government of Bangladesh (GoB) has stated it is discouraging rice imports and has imposed a high total tax incidence (62.5 percent) since November 2021 to protect the interests of local rice farmers.
India is expected to continue maintaining its position as the leading source for imported rice as its offers are comparatively much cheaper for both commodity price and freight.
Since the beginning of MY 2020/2021, Bangladesh has imported more than 99 percent of its rice from India.
Bangladesh is also expected to continue exporting its aromatic rice to the U.S., European, and Middle Eastern markets, particularly to Bengali ethnic communities.
USDA forecasts MY 2022/2023 rice exports at 8 thousand MT, 20 percent lower than the MY 2021/2022 USDA official estimate.
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