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Last Updated: Thursday, 17 February, 2005, 16:15 GMT
Dhaka acts to lower cost of rice
Farm worker in Bangladesh, BBC
Bangladesh consumes around two million tonnes of rice a month
The Bangladeshi government has begun selling rice reserves on the open market to control rising prices.

It is hoped the move will significantly reduce the price of rice, which is the staple diet in the country.

This is the second such government intervention in the market in the past four months.

About 200,000 tonnes of coarse rice will now be sold through dealers across the country. Last week duties on rice imports were lifted.

That move followed a decision to import rice after many domestic crops were destroyed in monsoon flooding last year.

However, importers and wholesalers have criticised the initiative as "untimely" and predicted that it would have "little or no impact".

They argue that it will take at least 15 to 20 days for imported rice to reach the market and that prices will not come down until a new variety of rice is available on the market in April.

Hit hard

The BBC's Shahriar Karim in Dhaka says that the price of the coarse variety of rice is 30% higher than a month ago.

Our correspondent says that many poorer people have been hit hard.

The government has now set the price of rice at 24 cents a bag. In October, it sold rice at 21 cents.

It now says that around 11,000 dealers across the country will get one tonne of rice every other day from government stocks.

Every customer will be able buy a maximum of five kg each day.

According to the food ministry, the country's monthly consumption of rice is around two million tonnes, along with 300,000 tonnes of wheat.

Ministers remain optimistic that their efforts will be able to rein in the price.

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