Report Highlights:

MY 2014/15 rice and wheat production levels are forecast at 34.8 and 1.3 million metric tons, respectively, on higher acreage and slightly improved yields. MY 2014/15 wheat imports are estimated at 3.3 million tons on expectations of low international wheat prices and rising domestic demand.

Executive Summary:

Assuming a normal monsoon, MY 2014/15 (May-April) rice production is forecast at 34.8 million tons on expectations of higher acreage and slightly improved yields for the Aus rice crop. MY 2013/14 and MY 2014/15 wheat production levels (planted in November/December and harvested in March/April) are estimated at 1.28 and 1.30 million tons, respectively, on higher acreage and improved yields. MY 2013/14 and MY 2014/15 wheat imports are estimated at 3 million and 3.3 million tons, respectively, on low international wheat prices and rising domestic demand. MY 2013/14 rice imports are estimated at 400,000 tons, up 365,000 tons on a strong Bangladesh Taka and high internal transportation costs that caused domestic rice prices to be uncompetitive in border districts. MY 2014/15 rice imports are forecast down to 100,000 tons on high production.

Rice, Milled

Production:

Assuming a normal monsoon, MY 2014/15 (May-April) rice production is forecast at 34.8 million tons due to expectations of higher acreage and good yields for the Aus rice crop. MY 2013/14 rice production is estimated at 34.59 million tons, up by three percent on higher acreage.

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. For more specific information on Boro, Aus, and Aman rice cultivation.

Consumption:

MY 2013/14 and 2014/15 total rice consumption levels are forecast at 34.6 and 34.8 million tons, respectively, rising on steady population growth. According to the Bureau of Statistics (BBS) Household Income & Expenditure Survey 2010 (HIES 2010), the average per-capita annual consumption of rice is 152 kg. From Fall 2013 to January 2014, rice prices rose due to strikes (hartals) that obstructed food distribution channels. High prices may have caused some consumers to shift to relatively lower priced staples such as wheat.

From January 2014, Dhaka wholesale and retail coarse rice prices began to ease, likely due to higher available supplies from the Aman rice crop that was harvested last December. However, higher input and other production costs also continue to exert upward pressure prices.

Trade:

MY 2013/14 rice imports are estimated at 400,000 tons, up 365,000 tons on a strong Bangladesh Taka and high internal transportation costs that caused domestic rice prices to be uncompetitive in border districts. Many of these imports originated from India, and were shipped to Bangladesh districts bordering India’s state of West Bengal. From December 2013 to March 2014, Indian rice exports to Bangladesh climbed to 374,000 tons. MY 2014/15 imports are forecast down to 100,000 tons on higher production. Although Ministry of Food officials and rice traders believe that domestic rice supplies are sufficient to meet demand, high internal transportation costs and a weak Indian rupee may continue to cause imports to be price competitive at the border. Bangladesh imports rice from India, Myanmar, Vietnam, Thailand, Pakistan, and China. 

Stocks:

For MY 2012/13, according to Ministry of the Food the government of Bangladesh distributed 1.5 million tons of rice (including 240,000 tons sold at subsidized prices) through the Public Food Distribution System (PFDS), which was less than the estimated target of 1.7 million tons. In MY 2013/14 the GOB has procured 1.15 million tons against the estimated target of 1.4 million tons.

Policy:

Bangladesh government 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 demand for rice. Nevertheless, rice accounts for over 90 percent of cereal production in Bangladesh. Rice imports have no quota and are duty free.

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.

Wheat

Production:

MY 2013/14 and MY 2014/15 wheat production levels (planted in November/December and harvested in March/April) are estimated at 1.28 and 1.30 million tons on good weather and strong yields. Acreage will increase slightly by 1.2 and 2.4 percent to 415,000 and 420,000 ha on competitive prices. Although these estimates are records, limited arable land, water, labor, and other factors (competition from wheat imports, and competition for area from other crops) could inhibit further production and acreage increases.

Consumption:

MY 2013/14 consumption is estimated at 4.3 million tons, up 7.5 percent due to lower prices of imported wheat. MY 2014/15 consumption will rise about 7 percent to 4.6 million tons on growing demand from middle-class consumers and expectations of low international wheat prices. Because imports constitute 70 percent of Bangladesh’s total wheat consumption, high international wheat prices can shift effective demand.

Trade:

MY 2013/14 and MY 2014/15 imports are estimated at 3 million tons (800,000 tons by the government and 2.2 million tons through private commercial sales) and 3.3 million tons, respectively, on low international wheat prices and continued rising domestic demand. Bangladesh sources wheat from India, Russia, Ukraine, Canada, Australia, and the United States.

For MY 2013/14, reportedly the GOB has purchased over 85 percent of its wheat target, which is mainly for the PFDS.

Stocks:

According to the Ministry of Food, MY 2013/14 public sector beginning stocks were 304,000 tons, 17 percent lower than last year. From July 2013 to March 2014, the GOB distributed 649,000 tons of wheat under the PFDS, up 40 percent on competitive prices. If the GOB achieves its procurement target, ending stocks could reach 340,000 metric tons.

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