Rice demand and supply situations in Bangladesh and Pakistan and policy implications

Abstract

This study is primarily an attempt to evaluate the present rice demand and supply situations in Bangladesh and Pakistan and analyze their future projections and policy implications. Rice production, acreage and yield in Bangladesh show an increasing trend, but domestic supply has constantly failed to win the race against the tremendous increase in demand. As for the long term projections, Bangladesh will remain, as in the past, an importer of rice, while Pakistan's exportable surplus of rice is expected to increase enormously. The demand projections have been based on alternative sets of assumptions regarding population and income in view of the disruptions in the economies due to the war of liberation. For Bangladesh two separate income elasticity coefficients (.28 and .42) and for Pakistan one income elasticity coefficient (.57) have been used in the projection model. Total demand for rice thus derived is estimated between 23.21 and 25.81 million tons in 1985-86 for Bangladesh. For Pakistan the total demand for rice will be between 3.24 and 3.42 million in 198-86. Supply projections based on the trend estimates of acreage and yield produce results substantially below estimates that allow for other variables. Alternative projections incorporating the impact of high yielding varieties of rice and improved cultural practices put the domestic rice production in 1985-86 at 22.66 million tons for Bangladesh and 6.75 million tons for Pakistan. Thus, while Pakistan will have an exportable surplus rice of 3.33 to 2.51 million tons in 1985-86, Bangladesh will need to import between 1.69 and 3.15 million tons of rice in the same year. ...