Private rice imports: Deadline nears, L/Cs for 47K tonnes only

Most of the importers are going to miss the government-set July 21 deadline to open letters of credit (L/Cs) to bring home 0.409=million tonnes of rice from abroad.

The L/Cs for 47,000 tonnes of rice have so far been opened in July. Of them, 18,000 are settled, Bangladesh Bank spokesperson Md Serajul Islam said on Tuesday.

Food ministry has permitted 329 importers to bring a total of 0.906-million tonnes within August 25 amid a growing trend of rice prices in the domestic market.

Of the total segment, 95 traders got permission on June 30 to open L/Cs for 0.409-million tonne rice import.

Those importers were given conditions to make L/Cs with banks within July 21 and bring the total consignment as well as market the staple by August 11.

Higher import duty, appreciation of dollar against taka, short time for processing and rising prices in India are failing many traders to open L/Cs within deadline, importers said.

"Even one-fourth of the import target could be hard to achieve if this short time span is not removed," says Monir Rahman, manager of Kajol Traders in Bogura.

Their companies got permission to bring 10,000 tonnes of rice but are yet to open L/Cs for fluctuation in dollar rate, he adds.

Mr Rahman says banks are charging Tk 101-102 for per dollar when Bangladesh Bank's rate was showing dollar rate at below Tk 94.

Prodoptto Majumder, chairman of Majumder Agrotech International Ltd, urges the central bank to supply dollar at its fixed rate to help them open L/Cs shortly.

"A Tk 7.0-8.0 difference per dollar means the impact of Tk 3.0-3.5 per kilo of rice," cites Mr Majumder, one of the leading importers of the country.

"I've a target to bring rice varieties similar to Najirshail which is being charged $450-480 a tonne, excluding import duty, by Indian exporters."

Mr Majumder says per-kilo import cost may count more than Tk 68 a kg for Najirshail-like finer rice.

Md Shamsul Hoque, proprietor of Samsul Hoque Auto Rice Mill in Nilphamari Sadar, suggests that 25-percent import duty be reviewed following high prices in India.

"I'm yet to open L/Cs for 4,000 tonnes of rice," he said.

Coarse rice will not be economically viable with costly dollar as well as higher duty, he observes. Mr Hoque says northern importers may bring some medium-quality Swarna-05 which can cost Tk 47-48 taking into account the dollar price at Tk 100-101.

However, all importers have sought to remove time limit to bring the targeted 0.906-million tonnes of rice.

Meanwhile, food ministry sources said only 1,200 tonnes of rice could be brought from India until July 18.

Rice prices, however, maintained previous highs as coarse rice retailed at Tk 52-54, medium at Tk 60-64 and finer at Tk 70-98 a kg in Dhaka city.

Companies like Pran, ACI, Aarong and BEOL were charging Tk 85-98 a kg for their branded finer rice.

The current rice prices are 13-20 percent higher than that in six months ago, according to the Trading Corporation of Bangladesh and city groceries.