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BaNGLaDESH FOOD SITUATION REPORT July-September, 2015 www.mofood.gov.bd Volume-102

Overview Domestic Production Outlook Total foodgrain production in FY2014-15 was 36.06 mmt (aus 2.33 aman 13.19, boro 19.19 and wheat 1.35 mmt). For FY2015-16, DAE fixed the target for total foodgrain production of 36.42 mmt in which contribution of aus, aman, boro and wheat would be 2.48 mmt, 13.56 mmt, 19.00 mmt and 1.40 mmt respectively. According to the latest monitoring report of DAE, area achieved for aus almost reached the target, registering 1.03 million hectares out of the target of 1.08 million hectares. Aman plantation area also marginally exceeded the target of 5.64 million hectares. Aman season has been experiencing favorable weather condition and therefore the production target of 13.56 mmt may be achieved. Foodgrain Import The provisional target for foodgrain import in FY 2015-16 is 4.00 mmt. The actual import in FY 2014-15 was about 5.27 mmt of which 1.49 mmt was rice and 3.78 mmt wheat. There was no commercial public import and food aid of rice during the year and private import constituted the entire part of total rice import. Domestic Foodgrain Procurement The foodgrain procurement target in FY2015-16 was set at 1.70 mmt of which 1.50 mmt would be rice and 0.20 mmt wheat. Actual procurement during the year 2014-15 was about 1.68 mmt, of which rice was 1.47 mmt and wheat 0.21 mmt. Boro procurement target is about to be achieved because 1.07 mmt of boro rice has already been procured. Public Foodgrain Distribution The budget for public food grain distribution in 2015-16 has been set at 2.78 mmt. The actual distribution during the year 2014-15 was about 1.84 mmt, against the revised target of 2.42 mmt. The Government plans to distribute higher amount of food grains in 2015-16 to ease hardship of poor people. Distribution during the 1st quarter constituted 11.3% of total budgeted distribution during 2015-16. Public Stock of Foodgrains The opening public stock of foodgrains on 1st July/15 was 1.15 mmt and the ending stock of June/15 was about 1.39 mmt. The stock of foodgrains steadily increased during the July-Sep/15 period. The closing stock of about 1.67 mmt in Sep/15 seems to be adequate to meet the requirements for PFDS operations in the coming months. Domestic Market Prices The wholesale rice and wheat prices declined during the 1st quarter from July to September of the FY2015-16. The nominal prices of rice and wheat declined by 0.24% and 0.25% respectively during the same period. International Prices and Production Outlook According to USDA forecast of June/15, Global rice production for 2015/16 is projected at 474.0 million tons (milled basis), down1.7 million tons from last month’s forecast and 1 percent below the year earlier record. Production forecasts were lowered for three major exporting countries—Thailand, India, and the United States.

FPMU

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Domestic Foodgrain Availability

Domestic Foodgrain Production Total foodgrain production in FY2014-15was 36.06 mmt (aus 2.33 aman 13.19, boro 19.19 and wheat 1.35 mmt). For FY2015-16, DAE fixed the target for total foodgrain production of 36.42 mmt in which contribution of aus, aman, boro and wheat would be 2.48 mmt, 13.56 mmt, 19.00 mmt and 1.40 mmt respectively. According to the latest monitoring report of DAE, area achieved for aus almost reached the target, registering 1.03 million hectares out of the target of 1.08 million hectares. Aman plantation area also almost reached 5.67 million hectares against the target of 5.65 million hectares with production target of 313.56 mmt. Although aman plantation had some early setback due to flood in the northen districts, the loss was recovered by quick raising of seedling through the initiatives of the DAE officials. Aman season has so far experienced conducive weather conditions. It is therefore expected that aman production target of 13.56 mmt for FY 2015-16 will be achieved.

Figure 1: Annual foodgrain production (mmt) and crop-wise contribution

Foodgrain Import The provisional target for foodgrain import in FY 2015-16 was set at 4.0 mmt. The actual import in FY 2014-15 was about 5.27 mmt of which 1.49 mmt was rice and 3.78 mmt wheat. There was no commercial public import of rice and food aid during the year and private import constituted the entire part of total rice import. However, public commercial wheat import constituted a small part of total wheat import during the year. As usual, wheat import by private sector constituted the major part of total foodgrain import. During the 1st quarter (July-September/15) of the current fiscal year, 0.81mmt of food grains were imported. Table 1: Foodgrain imports (000 metric tons)

19.1913.19

2.33 1.35

2014/15 (Actual)

BoroAmanAusWheat

19.0013.56

2.48 1.40

2015/16 (Target)

BoroAmanAusWheat

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Domestic Foodgrain Procurement The foodgrain procurement target in FY2015-16 was set at 1.70 mmt of which 1.50 mmt would be rice and 0.20 mmt wheat. Actual procurement during the year 2014-15 was about 1.68 mmt, of which rice was 1.47 mmt and wheat 0.21 mmt. The current boro (in trems of rice) procurement target has been set at 1.10 mmt at the rate of Tk 22/kg for paddy, Tk 31/kg for white rice and Tk 32/ kg for parboiled rice. Boro procurement started from 1st April/15 and continued up to 7th October, 2015. Boro procurement target is about to be achieved, because 1.07 mmt of boro rice has been procured. Aman procurement target and price will be fixed soon. Public Food grain Distribution The budget for public food grain distribution in 2015-16 has been set at 2.78 mmt. The actual distribution during the year 2014-15 was about 1.84 mmt, against the revised target of 2.42 mmt. Distribution through FFW was the highest, followed by OMS, EP, VGD, VGF and TR. During the 1st quarter (July-September/15) of the current fiscal year, 0.31mmt of foodgrains were distributed in which distribution through VGF was the highest, followed by VGD and EP. Distribution during the 1st quarter constituted 11.3% of total budgeted distribution during 2015-16.

Table-2 Channel-wise distribution of food grains (000 mt)

Public Stock of Foodgrains The opening public stock of foodgrains on 1st July/15 was 1.15 mmt and the ending stock of June/15 was about 1.39 mmt. The stock of foodgrains steadily increased during the July-Sep/15 period. The closing stock of about 1.67 mmt in Sep/15 seems to be adequate to meet the requirements for PFDS operations in the coming months, assuming that stock replenishments will continue to be normal.

Table 3: Commodity-wise closing public stock in FY 2014-15 and 2015-16 (000 mt)

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Market Price Review

Rice and Wheat Wholesale Prices The wholesale rice and wheat prices declined during the 1st quarter from July to September in FY2015-16 (Fig. 2). The nominal prices of rice and wheat declined by 0.24% and 0.25% respectively during the same period. The corresponding real prices dropped by 2.78% and 2.79%. The nominal rice and wheat prices rose by 2.0% and 0.49% respectively during the same period a year earlier. During FY2014-15, nominal rice and wheat prices declined by 20.31% and 11.57%, respectively. The real rice prices also decreased by 24.47% and 16.18% during the same period (Table 4). Table 4: Change of rice and wheat prices Rice and Wheat flour Retail Prices The retail prices of rice remained relatively stable and atta prices showed slightly downward trend during the 1st quarter of the current fiscal year 2015-16 (Fig.3). On average prices of rice of this quarter was stable at 27.13Tk/kg, atta prices dropped by 0.20Tk/kg during the period. Between January to September/15 rice prices fluctuated and declined thereafter. Atta prices showed downward trend and then remained relatively stable thereafter and started rising from November/14. Difference between Retail and Wholesale Prices of Rice and Wheat Flour Between October/14 and September/15, retail and wholesale prices of rice and atta in Dhaka city markets moved almost in the same directions, parallel to each other, with a percentage margin ranging from 6.2% to 14.8% for rice and 17.6% to 28.1 % for atta (Figures 4 and 5). The margins of rice fluctuated with a sharp increase in April/15 and narrowing in July/15, while for atta the margin fluctuated with a sharp increase in July/15, decrease thereafter during the period under review.

6.2 7.4

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Fig.4 Margins, reta il and wholesale prices of rice in Dhaka, 2015-16

Percentage margin Retail priceWholesale price

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Fig. 5 Margins, reta il and wholesa le prices of Atta in Dhaka, 2015-16

Percentage margin Retail priceWholesale price

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Fig.2 National wholesale price 2014-15

Rice 2015 Wheat 2015Rice 2014 Wheat 2014

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Fig.3 National retail price: 2014-15

Rice 2015 Atta 2015Rice 2014 Atta 2014

Rice Wheat Rice WheatJul'15 to Sep'15 -0.24% -0.25% -2.78% -2.79%Jul'14 to Sep'14 2.00% 0.49% -0.70% -2.17%Oct'14 to Sep'15 -20.31% -11.57% -24.47% -16.18%Oct'13 to Sep'14 3.91% -2.95% -1.85% -8.33%

PeriodNominal price Real price

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Monitoring and Outlook for Wholesale Prices of Foodgrains Domestic Rice Price Forecast The rice prices during May-September/15 period followed somewhat different pattern from what was observed in the last four year. Prices of current year remained more or less stable and they were much lower compared to earlier years. The absolute difference between current year’s prices and past years’ prices increased from 14% in May/15 to 19% in September/15. Estimates from price monitoring model, as shown in Figure 6, forecasts a band within which the price of rice is expected to remain during October/15 to December/15, if past trends are confirmed. Based on the estimates, it is noted that in December/15, there is approximately 70% chance that the coarse rice price will remain between Tk. 23.77/kg and Tk. 26.81/kg. Domestic Wheat Price Forecast During the May-September/15 period, wheat prices followed somewhat similar pattern from what was observed over the last four years, except in September when prices fell instead of rising in the normal year. The market prices remained much lower than normal prices in all the months during this period and their absolute differences rose from 16% in May to 21% in September. The model estimates showed that wheat price is expected to remain between Tk. 19.45/kg and Tk. 21.07/kg in October/15 and Tk. 19.43/kg and Tk. 21.92/kg in December/15 (Fig. 7). International Price and Production Global Rice Production and Price According to USDA forecast of October/15, Global rice production for 2015/16 is projected at 474.0 million tons (milled basis), down1.7 million tons from last month’s forecast and 1 percent below the previous year record. Production forecasts were lowered for three major exporting countries—Thailand, India, and the United States. The overall cereal production outlook in 2015 remains positive, mostly on account of a record output forecast in China. However, recent dry weather has dampened prospects in India and several countries of the Far East sub region. Prices for high and medium grades of Thailand’s regular-milled white rice increased 2-4 percent in early September, largely due to recently announced sales to the Philippines and Indonesia. Price quotes from Vietnam have increased over the past month as well, mostly a response to the large Government-to-Government purchase by Indonesia. U.S. prices for long-grain milled-rice has increased over the past month as well, largely a response to reduced expectations of the 2015/16 U.S. crop size. The LC settled price fluctuated with a downward trend during October/13 to September/15, while price of Thai 5% had a persistent downward trend during the same period (Figure 8).

Source: Bangladesh Bank, USDA

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Fig 8 International rice price

LC Settled Thai 5% paraboiled

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Global Wheat Production and Price Global wheat production for 2015/16 is increased by 3.5 million tons this month to reach 676.9 million, pushing the record further. Production is projected higher in the EU, Australia, Canada, Algeria, and Ukraine, but lower in Argentina and Ethiopia. Partly offsetting the global production increase is a decline of wheat production in the U.S, down 2.3 million tons to 55.8 million, with global wheat output 1.2-million-ton higher and 7.3 million tons ahead of last year’s record. Reduced wheat production is largely offset by declines in feed and residual and export utilization and, accordingly, no change in the season-average price is made this month. Both LC settled price and US Soft Red Winter (SRW) prices of wheat fluctuated during the period from October/13 to September/15, but the SRW price remained persistently lower than the LC settled price (Figure 9).

Food Consumption and Nutrition Nutrient density of the desirable diet Research on ‘Desirable Dietary Pattern’ conducted by BIRDEM in collaboration with FPMU and NFPCSP- FAO proposed quantities of food for desirable diets in Bangladesh based on normative guidance as per FAO and WHO recommendations. The nutrient density of the desirable diet has also been calculated as a measure of nutrients provided per 100 kilocalories of food. The energy (kcal/100g) and nutrient (mg or mcg/100Kcal) density of the desirable diet in Bangladesh is shown in Table 5. The nutrient density has been calculated `for key micronutrients, notably calcium, iron, vitamin A and folic acid. Cereals, oils and sugar provide mostly energy, but trace micronutrients. On the other hand, vegetables, fruits and animal source foods provide adequate micronutrients as well as some energy and protein. The comparative energy and nutrient density of the desirable and actually consumed diet shows that the desirable diet is less energy dense but more nutrients dense. In the actually consumed diet, the intake of cereals which are energy dense is much higher than that in the desirable diet. The intake of non-cereal nutrient dense foods is also much lower in the actually consumed diet. Table: 5 Energy and nutrient density of actual desirable diets of Bangladesh.

Food Desirable Intake(g)

Energy density kcal/100g

Nutrient Density Protein (g/100kcal)

Calcium (mg/100 kcal)

Iron (mg/100kcal)

Vit-A (RAE) (mcg/ 100kcal)

Folic Acid (mcg/100 kcal)

Rice 350 351 2 3 0.2 0 3

Wheat & other cereal

50 290 3 8 1.0 0 7

Pulses 50 336 8 22 1.8 1 29

Fish 60 121 50 216 1.1 17 10

Poultry & meat

40 131 16 9 1.1 13 5

Egg 30 158 8 38 1.0 135 32

Fruit 100 67 1 24 0.7 136 54

Vegetables 300 72 15 765 9.8 1550 415

Fat/oil 30 901 0 0 0.0 0.0 0

Source: NFP-PoA CIP Monitoring Report-2015 and ‘Desirable dietary pattern for Bangladesh’, BIRDEM-2013. Given the current dietary trends, the nutrient density approach can be a valuable tool for nutrition education and dietary guidance. There is need to consider the use of dietary guidelines as a tool in food, agriculture and health planning.

100150200250300350400450500

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Fig 9 International wheat price

LC Settled Wheat (soft red)

Source: Bangladesh Bank, USDA