Bangladesh bans most rice exports

Rice has doubled in price in Bangladesh in the past year Bangladesh has banned exports of nearly all the rice it produces to prevent shortages and keep food costs down. The government said the ban began on Tuesday and will last six months. Bangladesh is the world's fourth largest rice importer but exports a small amount of aromatic rice, such as Basmati, to other countries. Rising prices for rice, wheat and other foodstuffs have been hitting poorer people in South Asia badly. The rises have forced many Bangladeshis to reduce the amount they eat each day. Floods and storms last year compounded global supply problems and pushed prices up. 'Food security' The Bangladesh government ban follows similar moves in recent weeks by countries such as India, Vietnam and Egypt. Food queues have become longer as prices have gone up A kilogramme of coarse rice, the staple food of most Bangladeshis, now costs about $0.60 - double what it did a year ago. The government says it wants to stop exporters exploiting its rice export policy. "The move will help ensure food security and serve the country's interest," a senior commerce ministry official was quoting as saying by the Daily Star. Bangladesh produces about 29 million tonnes of coarse rice annually for its 140 million people and imports some three million tonnes. Rice exports were worth about $5.4m in the first eight months of the fiscal year (July-June), officials say. Imports cost about $600m - 10 times higher than for the same period the year before. Officials have said they fear social unrest unless they act over food, and many people have been queuing to buy government-subsidised rice. Bangladesh 's most important rice harvest, called Boro, has now begun and the government expects a bumper crop this year. Correspondents say this should ease problems, at least in the short term.

 

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Cyclone fuels rice price increase

Irrawaddy is a key rice growing region in Burma Rice prices have risen for the fourth consecutive day, as tight supplies are aggravated by the disaster in Burma's key rice-growing region. The cost of rice, the staple food for almost half the world's population, increased by 2.4% to $21.6 per 100lb on the Chicago Board of Trade. Cyclone Nargis, which has killed tens of thousands of people, struck areas where 65% of Burma's rice is grown. The disaster comes as rice and other food prices are already soaring. The higher price of US long-grain rice in Chicago has been replicated around the world, with Thai and India rice also increasing sharply. Food shortages The cyclone hit the Irrawaddy delta and other key rice-growing areas in Burma. The UN's Food and Agriculture Organisation (FAO) said the region had been due to export 600,000 tonnes of milled rice in 2008. Banning the export of rice produces a domino effect across the world market RS Seshadri, Tilda director However, it said secondary crops, normally harvested from April to June, could have been damaged by the cyclone, while rice already harvested might have suffered from poor storage. The FAO said "localised food shortages" were possible, while exports could also be hit. Export limits Global rice prices have now risen by more than 50% since the start of the year. This rise has been driven by both supply and demand factors, including shortages due to poor harvests, as well as growing populations in some rice-importing nations. More recently, forecasts of further price rises have prompted hoarding, making matters worse. Thailand , India, Bangladesh and Egypt have moved to set limits on rice exports to try to guarantee sufficient domestic supplies and calm price rises. However, this has only made prices rise further on the global market. "Banning the export of rice produces a domino effect across the world market, increasing the pressure on demand from those remaining countries whose markets are still open and causing inflation in countries reliant on imports," said RS Seshadri a director of rice giant Tilda. 'Shrinking supply' The higher prices have hit all types of rice, from standard long-grain to India's premium Basmati variety. "Increasing global demand and shrinking supply, combined with soaring production and distribution costs are simultaneously conspiring to create a 'perfect storm' of high Basmati prices," added Mr Seshadri. China is the world's biggest rice producer, but almost all of its crop is kept for the domestic market. With the world's largest population to feed, Beijing keeps rice prices subsidised. Thailand is the world's largest rice exporter.

 

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