Govt Drastically Cuts Food Import Projection .

Bangladesh has nearly halved its forecast for rice imports in the year to June 2012 on higher domestic stocks and rising local procurement due to good crops, a senior food official said on Friday, reports Reuters.

"We may need to import at best 500,000 tonnes of rice this fiscal year from 800,000/900,000 tonnes forecast earlier while wheat imports remain the same at 900,000 tonnes," said Ahmed Hossain Khan, director general of the state grain buyer.

"So, overall the food situation is very good."

Although Bangladesh is the world's fourth biggest rice producer, with average annual output of 33 million tonnes, it emerged as a major importer early this year, conducting several government-to-government deals with Vietnam and Thailand, the world's top two exporters of the grain.

The government imported an all-time high of more than 2.2 million tonnes of rice and wheat in the last fiscal year through June, of which 1.3 million tonnes was rice.

Rice stocks at government inventories currently stand at around 1.1 million tonnes, almost double a year ago, boosted by imports and more domestic supply, Khan said.

Supplies from local millers reached the target of 600,000 tonnes with contracts to deliver an extra 200,000 tonnes in the process, he said, adding that another 100,000 tonnes of white rice from Vietnam was due to arrive this month.

The output of the "Boro" variety hit a record 18.6 million tonnes in the latest harvest, boosting the total rice production to 33.5 million tonnes in the last three crop seasons from 32.2 million tonnes in the three seasons before that, according to the Bangladesh Bureau of Statistics.

Food inflation is a major headache for the government, as more than a third of the country's 160 million people live on less than $1.25 a day, and rice, a staple food, has been subsidised since last year, when panic buying drove prices higher.

Domestic prices have been stable in recent months but higher than last year, and traders said they expected prices to ease due to the plentiful stocks and also after India last week allowed unrestricted exports of two million tonnes each of wheat and common rice.

An earlier Reuters report adds: Bangladesh's annual inflation rate climbed to 11.29 per cent in August due to non-food prices as Ramadan festivities boosted spending on items from clothing to furniture, government data showed last Thursday.

Annual inflation in July had climbed just short of 11 per cent, the highest rate since January 2008, on the back of surging food and non-food prices alike.

Food inflation edged down to 12.70 per cent in August from 13.40 per cent in July, but non-food inflation rose to 8.76 per cent from 6.46 per cent.

"People spend more money to buy non-food items to celebrate Eid festival, while traders and businessmen increase prices to capitalise on it," a senior bureau official said.

Persistent inflation prompted the central bank to raise its key interest rates by half a percentage point earlier this month, its fourth hike since March, following an earlier reserve increase and a 1.0 percentage point rise in official rates in August 2010.

Non-food inflation has been on the rise since May after the government raised some fuel prices to help to relieve the state firms' hefty subsidy burden.

The government is under pressure from global lending agencies such as the International Monetary Fund (IMF) to raise its heavily subsidised fuel and power prices even more, but more cuts in subsidies would add to public fury over the spiraling cost of living.

Source : thefinancialexpress-bd.com