July 17, 2008	Thursday	Rajab 13, 1429

DHAKA: Bangladesh has shut almost 2,000 rice mills because they ignored official demands to sell the grain to the army-backed government at below market rates, an official and reports said on Wednesday.

The government wants to buy 1.5 million tons of rice from local markets this harvest season to boost reserves amid high global food prices and export curbs by other rice producing nations.

But many mills were not complying with a law requiring them to sell rice to the government at a fixed price, food ministry information officer Golam Kibria said.

“We have so far scrapped the licences of 1,969 rice mills. They have been shut down because they did not sell rice to the food department,” he said, adding that Bangladesh had a total of 14,000 rice mills.

Local newspapers said many millers did not want to sell rice to the government at its fixed rate of 28 taka per kg because the current market rate was much higher.

The government had met only 60 per cent of its rice purchase target and had a stock of close to one million tons following the mill closures, the information officer said.

But supplies were higher than the 600,000 tons at the same time last year, providing more of a buffer against potential shortages, he said.

Rice is the basic staple for Bangladesh's 144 million people, but its price has almost doubled in the past 12 months due to shortages caused by floods last summer and a devastating cyclone in November.

Bangladesh's interim government is trying to build the country's biggest food reserves on record in case of future shortages. It is also distributing subsidised food to tens of millions of people to combat rapidly rising prices.

Many in the impoverished South Asian nation say they can afford only one meal a day, in what has been described by a former government minister as the country's “silent famine.” —AFP