Report Highlights:

MY 2015/16 (May-April) rice production is projected at 34.8 million metric tons (MMT) on higher yields. MY 2015/16 (July-June) wheat production is estimated at 1.3 MMT. MY 2015/16 wheat imports are estimated at 3.8 million tons on expectations of low international wheat prices and strong domestic demand.

Executive Summary:

Assuming a normal monsoon, MY 2015/16 (May-April) rice production is projected at 34.8 million metric tons (MMT) on higher yields and acreage. MY 2015/16 (July-June) wheat production is estimated at 1.3 MMT. MY 2014/15 rice and wheat production estimates are unchanged at 34.5 and 1.3 MMT, respectively. MY 2015/16 wheat imports are estimated at 3.8 million tons on expectations of low international wheat prices and strong domestic demand. Post raised MY 2014/15 wheat imports to 3.5 MMT on strong import pace. MY 2014/15 rice imports were raised to 1.1 MMT on strong import pace.

Rice, Milled

Production:

Assuming a normal monsoon, MY 2015/16 (May-April) rice production is projected at 34.8 million metric tons (MMT). According to media reports, Bangladeshi officials noted that preliminary official data shows an increase in Boro rice acreage and production. The MY 2014/15 rice production estimate is unchanged; Aman acreage is down slightly due to floods in northern Bangladesh.

Around 80 percent of the country's total cultivated land area is used for rice production. Rice is grown all over Bangladesh except in the hilly south-eastern region.

Trade:

MY 2015/16 rice imports are estimated at 600,000 tons on expectations of competitive pricing from regional suppliers, such as India. The MY 2014/15 import forecast is raised to 1.1 MMT on strong import pace. According to the media, Bangladeshi officials allegedly are contemplating raising tariffs to stem the inflow of less expensive Indian rice imports; however, no action has been taken at this time. A few months ago, media articles noted that the Bangladeshi government agreed to export rice to Sri Lanka. According to Sri Lankan customs data, 25,000 tons of Bangladeshi rice was delivered in January 2015.

Stocks:

According to the Ministry of Food (MOF), as of April 23, 2015 public stocks are estimated at 842,000 MT, approximately 95,000 MT more than what was available in April 2014. Prices Local media noted that from May 1, 2015 to August 31, 2015, the GOB is planning to procure one million and 100,000 tons of Boro paddy and milled rice. Wholesale prices have fallen precipitously since January 2015. News outlets stated that because hartals and blockades disrupted transportation to major city markets, this caused prices offered by middlemen at the farmgate level to fall.

Policy:

Government of Bangladesh policy on rice is articulated in the National Food Policy of 2006 and the National Food Policy Plan of Action (2008-2015). Historically Bangladesh has emphasized self-sufficiency in rice, often at the expense of self-sufficiency in other non-cereal food products, such as pulses. As Bangladesh shifts to a more market-oriented policy framework, government feeding programs are targeting those most in need and policy is encouraging production of other commodities, demand for which is growing faster than for rice. Nevertheless, rice accounts for over 90 percent of cereal production in Bangladesh.

Rice imports have no quota and are duty free. For fiscal year (FY) 2014/15 (July to June), Bangladesh extended the export ban on non-fragrant rice (although exceptions were allegedly made for a shipment to Sri Lanka). The GOB may allow aromatic/fragrant rice exports with permission from the Ministry of Commerce.

Marketing:

Bangladesh typically purchases lower-quality (25% or more broken) parboiled rice. A small niche market exists for high quality (e.g. basmati) rice imports. Historically, U.S. rice exports have not been price competitive.

Bangladesh: Commodity, Rice, Milled, PSD

(Area in Thousand Hectares and 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

0

11,810

Beginning Stocks

696

696

937

937

0

1,212

Milled Production

34,390

34,390

34,600

34,500

0

34,800

Rough Production

51,590

51,590

51,905

51,755

0

52,205

Milling Rate (.9999)

6,666

6,666

6,666

6,666

0

6,666

MY Imports

751

751

600

1,100

0

600

TY Imports

700

1,260

600

600

0

850

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

35,837

35,837

36,137

36,537

0

36,612

MY Exports

0

0

0

25

0

0

TY Exports

0

0

0

25

0

0

Consumption and Residual

34,900

34,900

35,300

35,300

0

35,600

Ending Stocks

937

937

837

1,212

0

1,012

Total Distribution

35,837

35,837

36,137

36,537

0

36,612

Yield (Rough)

4.3832

4.3906

4.3987

4.3897

0.0000

4.4204

Wheat

Production:

Assuming normal weather conditions, MY 2015/16 and MY 2014/15 wheat production levels (planted in November/December and harvested in March/April) are both estimated at 1.30 million tons. MY 2013/14 data was revised slightly on official government data.

Imports

For MY 2015/16, wheat imports are forecast at 3.8 MMT, up on expectations of competitive international prices and stronger demand from a growing, more affluent population. For MY 2014/15, Post's import estimate is raised to 3.5 MMT on strong import pace, particularly from Brazil. According to media reports, the GOB plans to import 250,000 MT of wheat from Ukraine through a government-to-government contract, although details on whether the agreement has been finalized are still unclear. Ukrainian customs data note that since September 2014, Ukrainian exports to Bangladesh have totaled approximately 530,000 MT. Bangladesh sources wheat from India, Russia, Ukraine, Canada, Australia, and the United States.

Stocks:

According to the MOF, as of April 23, 2015, public stocks are estimated at 213,000 MT, 25 percent less than last year.

Prices

Because imports constitute 70 percent of Bangladesh's total wheat consumption, high international wheat prices can shift effective demand. Average April 2015 (to date) wholesale and retail prices of coarse wheat flour in Dhaka were BDT 24.93 ($0.34) and BDT 31 ($0.42) per kilogram. For MY 2014/15, strong global production and high global exportable supplies have kept international prices low, which should help mitigate Bangladeshi wholesale prices. At the moment, retail prices for wheat flour are less expensive than coarse rice, a main staple in the Bangladeshi diet.

Policy:

Wheat imports are duty- and quota free. Traders often bid high to cover various risk factors.

Marketing:

Because Bangladesh is a very price sensitive market, it typically buys wheat from the lowest priced offer. Although Bangladeshi importers may be willing to pay an additional $10 to $15 per ton CIF for premium wheat, this mark-up usually is not enough to cover freight from distant origins. As a result, premium wheat from the United States is generally uncompetitive. Likewise, longer delivery periods also create problems for some buyers.

Bangladesh: Commodity, Wheat, PSD

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

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2015

Bangladesh

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

410

430

415

430

0

430

Beginning Stocks

1,104

1,104

1,438

1,333

0

1,333

Production

1,280

1,300

1,300

1,300

0

1,300

MY Imports

3,354

3,329

3,300

3,500

0

3,800

TY Imports

3,354

3,329

3,300

3,500

0

3,800

TY Imp. from U.S.

86

0

0

0

0

0

Total Supply

5,738

5,733

6,038

6,133

0

6,433

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

4,300

4,400

4,700

4,800

0

5,200

Total Consumption

4,300

4,400

4,700

4,800

0

5,200

Ending Stocks

1,438

1,333

1,338

1,333

0

1,233

Total Distribution

5,738

5,733

6,038

6,133

0

6,433

Yield

3.1220

3.0233

3.1325

3.0233

0.0000

3.0233