DHAKA, Jan 22 (Reuters) - Bangladesh has put on hold a decision to overturn a four-year old ban on rice exports until domestic prices of the staple come down, a senior food ministry official said on Monday.
Bangladesh, the world’s fourth-biggest rice producer with around 34 million tonnes annual yield, banned overseas shipments of some common varieties in May 2008 following a spike in domestic prices. It banned all exports a year later.
“The government will come to a decision on rice exports only after the market becomes stable,” the official said.
In August last year, the government extended the ban on the export of most varieties of rice until June.
However, the government is actively considering lifting the ban on common rice exports to support farmers as record crops and bulging domestic reserves pushed prices below production costs.
But a sudden rise in rice prices over the past few weeks, which market insiders blamed on hoarding by millers and traders, forced authorities to shelve the plan for the time being.
The official at the ministry said they were also checking whether any traders were trying to flout the ban and sell common rice varieties overseas, mainly to neighbouring India where rice prices are higher.
In April last year, Bangladesh ended a ban on aromatic rice exports.
Rice prices are a politically sensitive issue, given that a third of Bangladesh’s population live on less than $2 a day.
Bangladesh produces enough rice to feed its 160 million people but often requires imports to cope with shortages caused by calamities such as floods and droughts.
In 2011, Bangladesh was the world’s fourth-largest importer of rice with volumes of 1.48 million tonnes, according to the U.S. Department of Agriculture, as dwindling stocks and rising prices led the government to import.
It did not import rice last year and is not expected to in 2013.
Reporting by Ruma Paul; editing by Anis Ahmed and Keiron Henderson