The rice sub-sector of Bangladesh has taken a sound beaten.
This is because floods have washed away crops that would have yielded nearly 400,000 tonnes of rice, according to estimates from the agriculture ministry.
This could be a major blow to the South Asian country, which has historically relied on imports to cope with shortages caused by natural disasters such as floods or drought.
The nation’s farmers, though, have recently been struggling to secure fair prices for their produce amid a surplus of the grain, with no overseas deals in sight since the country lifted an export ban in May to support the market.
The flooding triggered by heavy monsoon rains has killed at least 108 people and affected more than 6 million people in Bangladesh and damaged other crops, mostly in the northern region.
“This is a huge loss for the farmers,” said Mir Nurul Alam, director general of the Department of Agricultural Extension.
“But I don’t think this will have much impact on the overall rice stocks,” he said, given the nation’s ample reserves.
Bangladesh’s weather bureau, meanwhile, has forecast another spell of floods could hit the low-lying country of more than 160 million people this month.
The central bank instructed local lenders not to press for repayment of previous loans and to provide new ones to help farmers hit by the floods.
Agriculture Minister Abdur Razzaque also said the government has allocated a total of 638 million taka ($7.5 million) in emergency aid for farmers in flood-hit areas.
Besides the emergency aid, a farm rehabilitation plan is being worked out to provide free seed and fertilizer for affected farmers for the next crop season, he said.
“We have taken a slew of measures to ensure fair prices for the farmers … instructions have been given to (district officials) to buy rice directly from farmers,” Razzaque said.
Market insiders, however, said the move would not benefit most growers in dire need of cash, since they are often compelled to sell their crop to millers or middlemen at much cheaper rates to meet loan payments.
In 2017, Bangladesh was forced to massively increase imports to shore up its reserves after floods destroyed crops and pushed local prices to records. Domestic stocks have greatly improved since then.
In May, Bangladesh raised its rice import duty to 55% from 28% and lifted a long-standing ban on exports to support farmers amid widespread protests by growers over a drastic fall in domestic prices.
Bangladesh, the world’s fourth-biggest rice producer with nearly 35 million tonnes of output a year, has been unable to clinch overseas deals since the export ban was lifted because its rice is more expensive than supplies from India or Thailand, even after the recent fall in local prices.