Miller Magazine Issue: 132 December 2020

BANGLADESH 82 MILLER / december 2020 impact on Bangladesh’s MY2020/21 grain production. However, severe weather in Bangladesh, which started in May and ended in August, has impacted Bangladesh’s rice production and moderately impacted Bangladesh’s corn production, according to a Grain and Feed Update report from USDA released on 8th November. Wheat production, which predominately takes place from No- vember to April in Bangladesh, was not impacted. The COVID-19 pandemic has impacted domestic retail prices for rice, wheat flour, and corn primarily because of farmer and miller speculation but also because of minor supply chain disruptions during the Bangladesh govern- ment’s COVID-19 lockdown, which ended in May, and restrictions on importing agricultural inputs (e.g., seeds, fertilizer) put in place by exporting countries, USDA re- ported. The government made several announcements over the summer to assuage consumer concerns of any potential food shortages. It has consistently released in- formation about the grain stock levels and has demon- strated a close monitoring of domestic grain prices. RICE PRODUCTION Bangladesh is the world’s 4th largest rice-producer and one of the highest per capita consumers of rice (about 170 kg annually). It is the sta- ple food for the people of Bangladesh. Rice production currently accounts for 77% of agricultural land use maintained by some 13 million farm families. USDA forecasts Bangladesh’s MY 2020/21 rice production at 35.3 million metric tons (MMT), as a result of severe weather over the May to August time period. If realized, the MY2020/21 rice crop would be down 1.4 percent relative to the MY2019/20 crop. USDA’s forecast for Bangladesh’s rice con- sumption in MY 2020/21 is 36.3 MMT. This consumption estimate is 0.5 MMT above MY 2019/20 consumption levels because of two major factors. First, the government has increased its procurement target of rice to support local farmers and keep market prices stable. Second, household consumers have increased personal stocks, via personal pur- chase and aid donation, of rice to keep at home during the pandemic, which will likely more than offset the drop in rice consumed in the hotel, restaurant, and institution (HRI) sector. The International Rice Research Insti- tute (IRRI) conducted a survey comprised of different rice value-chain actors in which re- spondents indicated an increase in per-capita consumption of rice as a result of COVID-19 because “rice is easily available and cheaper than other foods”. USDA’s forecast for rice imports is 500,000 MT in MY 2020/21, as a result of the government’s dif- ficulty in procuring rice from the domestic market at low prices. Smallholders farmers reported various difficulties in selling rice as a part of the increased procurement program this year because of regulations and high trans- action costs associated with the procurement program. The government has publicly stated the possibility of in- creasing rice imports to meet the necessary food security stock levels. The current effective import rate for rice is 55 percent. STRONG DEMAND FOR WHEAT Bangladesh being driven by rapid urbanization, rising incomes and more people joining the workforce outside their homes, the demand for wheat-made food and food products is on the rise. Second to rice, wheat is one of the most important winter crops and is temperature-sensitive grain crop of Bangladesh. USDA’s forecasts Bangladesh’s MY 2020/21 wheat production at 1.25 MMT. If realized, this crop would be a 4.2 percent increase over the 2019/20 crop. The Min- istry of Agriculture has set the annual food grain produc-