Report Highlights:

For marketing year (MY) 2015/16 (May to April) the rice area and production forecast is unchanged at 11.8 million HA and 34.6 million metric tons (MMT). The MY 2015/16 wheat production estimate is unchanged.

Executive Summary:

For MY 2015/16 (May to April) the rice area and production forecast is unchanged at 11.8 million HA and 34.6 MMT. The MY 2015/16 wheat production estimate is unchanged. On December 7, 2015, the Government of Bangladesh (GOB) raised the rice import duty from 10 to 20 percent to prevent less expensive rice imports from competing with domestic rice. Post contacts believe the new tariff may not impact the market for two to three months.

RICE

Production

MY 2015/16 (May to April) the rice area and production forecast is unchanged at 11.8 million HA and 34.6 MMT. Aman area was affected by floods and rains (please see the October 2015 report); although some Post contacts believe that some farmers might have planted short season varieties to recover production losses, it is unclear whether this was effective or widespread. According to sources, Boro rice planting (from mid-November to mid-February) is continuing on schedule.

Trade

The MY 2015/16 import forecast is unchanged at 600,000 MT.

Stocks

According to the Ministry of Food (MOF), in December 2015 public stocks are 1.13 MMT, approximately 50,370 MT lower than last year. According to a Post contact, the GOB has approved the construction of eight new steel silos for wheat and rice (two for wheat and the remaining for rice), which is expected to be built by June 2020. All eight silos are together projected to hold 535,000 MT.

Prices

From December 15, 2015 to March 15, 2016, the GOB is planning to procure 200,000 MT of Aman rice for state reserves, offering BDT 31 ($.39) per kilogram for milled rice. This rice is primarily procured for the public distribution system, which distributes rice and other grains to the poor. For January 2016, the wholesale and retail rice prices in Dhaka and Gazipur are BDT 26.34 ($0.33) and BDT 31 ($0.39) per kilogram, respectively, which are 17.3 percent and 10.1 percent less than same month last year. During part of CY 2014, prices rose due to strikes (hartals) that disrupted transportation; prices were less strong in later months after the hartals ceased. For MY 2015/16, higher carry-in stocks likely are helping to mitigate domestic rice prices; these stocks likely were partially built with less expensive imported rice in the last couple years. According to media articles, the retail rice prices have increased to BDT 100 per 50 kilograms due to more expensive jute bags, which are compulsory for transporting and selling rice.

Policy

On December 7, 2015, the GOB raised the rice import duty from 10 to 20 percent to prevent less expensive rice imports from competing with domestic rice. Post contacts believe the new tariff may not impact the market for two to three months. Less expensive imported rice likely helped build stocks that are mitigating domestic market prices for MY 2015/16. Higher production costs for Bangladeshi farmers (such as labor and fuel) coupled with more expensive imports may cause domestic rice prices to rise in the future.

The MOF recently revised its food grain procurement policy, which included updating procurement specifications for paddy rice, milled rice, and wheat. The policy notes that only registered farmers can sell grain to the government on a first-come first-serve basis; moreover, by 2016 all rice millers must use rubber rollers and polishers.

Bangladesh: Commodity, Rice, Milled, PSD

(Area in Thousand Hectares, Quantity in Thousand Metric Tons)

Rice, Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

May 2013

May 2014

May 2015

Bangladesh

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

11,770

11,750

11,800

11,790

12,000

11,800

Beginning Stocks

696

696

937

937

1,436

1,436

Milled Production

34,390

34,390

34,600

34,500

34,600

34,600

Rough Production

51,590

51,590

51,905

51,755

51,905

51,905

Milling Rate (.9999)

6,666

6,666

6,666

6,666

6,666

6,666

MY Imports

751

751

600

1,224

600

600

TY Imports

700

1,323

600

600

600

850

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

35,837

35,837

36,137

36,661

36,636

36,636

MY Exports

0

0

0

25

0

0

TY Exports

0

0

0

0

0

0

Consumption and Residual

34,900

34,900

35,300

35,200

35,500

35,500

Ending Stocks

937

937

837

1,436

1,136

1,136

Total Distribution

35,837

35,837

36,137

36,661

36,636

36,636

Yield (Rough)

4.38

4.39

4.40

4.39

4.33

4.39

WHEAT

Production

The MY 2015/16 wheat production estimate is unchanged. Reportedly, new seeds are available that are heat tolerant such as BARI Gom-25, BARI Gom-26, BARI Gom-27, and BARI Gom-28.

Imports

For MY 2015/16, Post's estimate is unchanged at 3.6 MMT; high carry-in stocks are expected to lower import demand.

Stocks

According to the MOF, during the last week of December 2015, public stocks were estimated at 361,740 MT, which is 205 percent higher than last year. The GOB now provides cash transfers to the poor in lieu of food, such as wheat flour, which may be one reason why December stocks are higher than the previous year.

Prices

January 2016 wholesale and retail prices of loose wheat flour in Dhaka were BDT 22 ($0.29) and BDT 28 ($0.35) per kilogram, which is 15.6 percent and 15 percent lower than last year due to low global wheat prices. Bangladesh imports approximately 90 percent of its total consumption needs.

Policy

The MOF published new international milling wheat purchase specifications on November 25, 2015. Please see the Rice Policy section for other food grain updates.

Bangladesh-Quality Specifications for Government Wheat Tenders

Quality parameter

Specification

Rejection

i) Test weight

76 Kg/hl

Below 76 Kg/hl

ii) Damaged kernels (maximum)

3%

above 3%

iii) Foreign material (maximum)

0.7%

above 0.7%

iv) Shrunken & broken kernels (maximum)

4%

above 4%

v) Wheat of other classes

4% (including maximum 2%

contrasting classes)

above 4% (including maximum 2%

contrasting classes)

vi) Protein content (minimum)

12.5 (at Dry Matter Basis)

Below 12.5 (at Dry Matter Basis)

vii) Moisture content (maximum)

13.5%

Above 13.5%

viii) Dockage (maximum)

1% (All dockage shall be deductible from the value)

Above 1%

ix) Radioactivity (maximum)

50 Bq/Kg of 137 Cs (Relaxable for the crop of SAARC & South-East Asian Countries)

Above 50 Bq/Kg of 137 Cs (Relaxable for the crop of SAARC & South-East Asian Countries)

Bangladesh: Commodity, Wheat, PSD

(Area in Thousand Hectares, Quantity in Thousand Metric Tons)

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

Jul 2015

Bangladesh

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

410

410

415

415

420

420

Beginning Stocks

1,104

1,104

1,338

1,313

1,642

1,608

Production

1,280

1,280

1,300

1,300

1,320

1,320

MY Imports

3,354

3,329

3,804

3,795

3,600

3,600

TY Imports

3,354

3,329

3,804

3,795

3,600

3,600

TY Imp. from U.S.

86

0

0

0

0

0

Total Supply

5,738

5,713

6,442

6,408

6,562

6,528

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

0

0

0

0

0

0

FSI Consumption

4,400

4,400

4,800

4,800

5,300

5,300

Total Consumption

4,400

4,400

4,800

4,800

5,300

5,300

Ending Stocks

1,338

1,313

1,642

1,608

1,262

1,228

Total Distribution

5,738

5,713

6,442

6,408

6,562

6,528

Yield

3.12

3.12

3.13

3.13

3.14

3.14