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India Lifts Rice Export Ban After 14 Months
International Desk
28 Sep 2024, 11:27
Photo: Collected
India has lifted the ban on rice exports after 14 months. In a statement issued by the country's central government on Friday, it was announced that exporters are now allowed to export all types of rice, except Basmati.
The export duty on rice has also been reduced. Previously set at 20%, the rate has now been lowered to 10%.
India's rice exporters are naturally elated by this decision. Suraj Agarwal, the CEO of one of India’s leading rice export companies, Rice Villa, told Indian media outlet NDTV, "This decision by the government will be a game-changer for India's domestic agriculture sector as well as the international rice market. On one hand, rice prices in the global market will decrease, while on the other, farmers will also benefit."
Key Stats:
- Duration of Rice Export Ban: 14 months.
- Export Duty Reduction: Previously 20%, now reduced to 10%.
- Global Impact of India’s Rice Export Ban:
- Rice prices in the international market increased by 11.7%.
- This was the highest price surge in 11 years.
- India’s Share in Global Rice Trade:
- 40% of the rice traded globally comes from India.
- Top Rice-Producing Countries:
- Bangladesh, China, India, Indonesia, Thailand, and Vietnam.
Rice is primarily produced in India’s eastern, northeastern, and southern states. Last year, production in these regions was affected due to insufficient rainfall. In response, on July 20, 2023, the central government of India imposed a ban on rice exports to stabilize the domestic market.
Rice is the staple food for more than 3 billion people worldwide. According to the U.S. Department of Agriculture, six countries—Bangladesh, China, India, Indonesia, Thailand, and Vietnam—are currently the top rice producers in the world.
However, India remains the leading exporter of rice. About 40% of the rice traded in the global market comes from India.
Following India's ban on rice exports, the international market saw a rise in rice prices. According to Reuters, the price of all types of rice increased by 11.7%, marking the highest price surge in 11 years.
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Expatriate income over $2b in 28 days
Bangladesh is showing an upward trend again in remittances sent by expatriates and exceeded $2 billion in 28 days of August.
The relevant department of the Central Bank informed this information on Thursday (August 29).
According to Bangladesh Bank's updated report on remittance as of 28 August, expatriate Bangladeshis sent $2.07 billion to the country through the formal channel. In the same period of August 2023, the remittance inflow was $1.43 billion.
Bangladesh witnessed the lowest remittance in the last 10 months in July 2024 amid the student movement. In July, the country's remittance was about $1.91 billion.
Bangladesh Bank officials said expatriates are now being encouraged to send remittances through legal channels. They are being made aware. We hope that more remittances will come in a legal way in future.
Exports shown to be $26 billion higher in 23 months
There is a large discrepancy between actual exports and data provided by the government agency Export Promotion Bureau (EPB). In the last 23 months, the company has shown more exports of 26.40 billion dollars. This came to light after Bangladesh Bank released actual export data.
Bangladesh Bank released the actual export data for the financial years 2022-23 and 2023-24 on Thursday (August 29). It showed that in the fiscal year 2023-24, the exports decreased by 5.90 percent to 40.81 billion dollars compared to the previous fiscal year.
EPB last released export data last May. The company had shown exports of $107.10 billion in 23 months, although the actual exports were $80.70 billion. Exports in 23 months showed a high of 26.40 billion dollars.
Under pressure from the IMF, Bangladesh Bank started publishing monthly actual export data last April. After that, a large discrepancy was found in the EPB data. EPB has since stopped publishing export data. The company usually publishes the information in the week following the end of each month. But even though August is coming to an end, the information of June has not been published so far.
GFI reports / 80,000 crores smuggled from Bangladesh every year
Global Financial Integrity (GFI), a Washington-based financial sector research organization, said that an average of 7.53 billion 37 million dollars or Tk 80,000 crores have been smuggled abroad from Bangladesh every year.
The organization says, 'Every year, an average of 80 thousand crore has been smuggled from this small third world country! A large part of which is smuggled in the guise of international trade.'
Economists say that the main challenge now is to recover the laundered money anyway. They also said that for the past few years, the economy of the country has been suffering from various factors including dollar crisis, fragile economy, inflation, one of the reasons of which is money laundering. Lakhs of crores have been smuggled to different countries of the world in various ways including global trade manipulation, hundi, smuggling.
According to the Center for Policy Dialogue (CPD), in the last one and a half years, more than 100 thousand crores have been smuggled to different countries of the world through only 24 loan scams embezzled from 19 domestic banks. Not only individual initiatives, several financial institutions and public, private banks are also indirectly involved in the money laundering process.
Several years ago, Bangladesh signed several agreements with many countries to recover the money smuggled. Economists say that the current government can continue those agreements and joint ventures with related countries.
Budget shorten plan, hope to save Tk 1,00000 crores
To control inflation and reduce the pressure on foreign exchange reserves, the current interim government has planned to revise the budget for the current financial year. As part of the plan, there could be major changes in the budget, which could reduce wasteful expenditure by up to Tk 1 lakh crores.
Earlier last week, an official of the Finance Ministry said that formal discussions on this issue may begin in September.
He says there is little scope for fiscal budget cuts, so most of the changes will be from the Annual Development Program (ADP). Because most of the Ministries and Departments usually do not spend a large part of their budget allocation.
The Awami League government formulated a budget of Tk 797,000 crores for the current financial year before they were ousted by a mass coup on August 5. Out of this, ADP was Tk 2 lakh 65 thousand crores.
LPG prices hiked again
Bangladesh Energy Regulatory Commission (BERC) fixed the new price of Liquefied Petroleum Gas (LPG) for the current month (September).
BERC revealed in a circular that a 12 kg LPG cylinder's price has been increased by Tk 44. It will now cost Tk 1,421
The new price will be effective from 6 pm today (Monday).
Earlier, last month (August) the price of a 12 kg cylinder was increased by 11 taka. It cost Tk 1,377.
It is to be noted that, the price of LPG and Autogas decreased five times last year.
In January, March, April, June, and July last year, the prices of LPG and Autogas decreased.
However, the prices increased in February, May, August, September, October, November and December last year.
A lot of garment manufacturing may move to India from Bangladesh
Raymond CMD Gautam Singhania expects a large chunk of garment manufacturing to move India in the coming years due to the political turmoil in Bangladesh and believes his company is ready to tap into the opportunity with the investment it had made to supply to global players.
"We sell fabrics to Bangladesh, all that business is coming back here after the crisis. Once the business shifts here, it won't go back.
They don't have a fabric base. You will succeed when you are integrated - we have fabric base and garment base (in India). Today, the ball has been thrown, we have to catch it," he said.
Raymond had invested around Rs 200 crore to expand its garment manufacturing capacity, which Singhania expects will come handy given that the company is already supplying to large buyers. "We are the third largest garment manufacturer in the world; we do 10 million pieces a year. Two Chinese players are bigger; they have higher volumes, but they sell cheaper stuff. Today, all the marquee customers are with us. For example, Hugo Boss, CK, Macy's, JCPenney. Out of Rs 7,000 crore (revenue), Rs 1,200 crore will come from there, 95% of that is exported," he said.
While Raymond is seeking to expand its portfolio with sleepwear, inner-wear, and bolstering Ethinix, Singhania ruled out a re-entry into womenswear. "It's as different for me (as it is) to make cement and steel. We did a market survey and it showed that the male took very strong objection to Raymond extending it to womenswear," he said.
Source: TOI
10 Banks Face Provision Shortfall of Over Tk 31,000cr
Ten banks, including six private commercial ones, had faced a provision shortfall of around Taka 31,549 crore in total at the end of June this year, as per the latest data of Bangladesh Bank (BB).
The banks are National Bank, BASIC Bank, Agrani Bank, Rupali Bank, Bangladesh Commerce Bank, Dhaka Bank, Standard Bank, Bangladesh Development Bank, IFIC Bank and Southeast Bank.
According to the policy, banks are required to maintain a provision of 0.50% to 5% of their deposits. However, provisioning requirements can range from 20% to 100% depending on the classification of default loans.
Central Bank data shows that the provision shortfall in the banking sector has risen by Tk 4,963 crore between April and June. As of the end of March this year, the sector's provision shortfall stood at Tk 26,586 crore.
According to the Bangladesh Bank report, default loans in the banking sector reached Tk 2,11,391 crore, or 12.56% of the total loans, by the end of June.
During the June quarter (April-June), classified loans rose by Tk 29,096 crore from Tk 182,295 crore as of March 30.
The BB data shows that state-owned commercial banks hold the largest share of the classified loans (Tk 1,02,483 crore or 32.77 percent) followed by specialized banks (Tk 5,756 crore or 13.11 percent), private commercial banks (Tk 99,921 crore or 7.94 percent), and foreign commercial banks (Tk 3,229 crore or 4.74 percent).
Source: BSS
