Rice imports by Bangladesh, South Asia’s biggest buyer, may be half the amount forecast earlier by the government as local production increases and domestic prices decline, according an executive at the state food buyer.

Shipments may total 400,000 metric tons in the year that began July 1 compared with 800,000 tons estimated two months ago, Badrul Hasan, director for procurement at the Bangladesh Directorate General of Food, said in a phone interview. Imports were 1.26 million tons in the year ended June 30, he said.

Lower imports by Bangladesh may help end a 50 percent jump in prices in Chicago in the past year that allowed rice to beat rallies in corn and soybeans and a drop in wheat. Global food costs were near a record in August, supported by higher rice and corn prices, according to the Food & Agriculture Organization.

“With stocks much higher this year, we’ll have less import needs,” Hasan said from Dhaka yesterday. Lower local prices will also help the government to cut purchases of the grain used in a food-distribution program for the poor, he said.

Rough rice for November delivery traded at $17.86 per 100 pounds on the Chicago Board of Trade at 10:09 a.m. in Singapore. The most-active contract touched $18.54 on Sept. 12, the highest level since 2008, when surging food costs stoked riots worldwide.

The global rice trade may total 33.2 million tons in the year from Jan. 1 from 31.6 million tons in 2010, according to the U.S. Department of Agriculture. Thailand and Vietnam are the two largest exporters, while India, which ended an export ban, is forecast to overtake the U.S. and Pakistan to become the third-largest shipper, according to USDA data on Sept. 12.
Bigger Harvest

Bangladeshi production of milled grain, excluding waste, may rise to 30 million tons in the year from July 1, from 28.5 million tons last year, Hasan said. Hasan’s latest rice-import estimate compares with the 600,000 ton forecast by the USDA’s Foreign Agricultural Service on Aug. 5.

Local stockpiles were at 1.1 million tons, almost double the 600,000 tons a year ago, after the government boosted overseas purchases last year to secure supplies as so-called panic-buying sent domestic prices higher, he said.

The end of the export ban on non-basmati rice shipments from India, the world’s second-largest grower, may push Bangladesh’s domestic prices down further as it helps buyers to be able to secure supply in the event of crop losses, Hasan said.

After the government ended the ban on Sept. 8, exports by India may reach 2 million tons by March 31, according to an estimate from Shri Lal Mahal, a New Delhi-based trader.

Domestic wholesale prices of rough rice in Dhaka have fallen 6.9 percent to 3,082 taka ($41) per 100 kilograms in August, from 3,311 taka in December, the highest price since April 2008, according to FAO data.

The UN agency’s Rice Price Index, which tracks 16 varieties from exporters, advanced 20 percent to 261 in August from a year earlier. The World Food Price Index was at 231.1 last month, near the all-time high of 237.7 in February, the FAO said.

Source : bloomberg.com