Bangladesh and Pakistan resume direct trade after more than 50 years

DHAKA (Reuters): Bangladesh has resumed direct trade with Pakistan for the first time since its independence in 1971, with the first shipment of 50,000 tonnes of rice leaving Port Qasim under a government-to-government deal, officials said.

The deal follows an improvement in diplomatic relations since an interim government in Bangladesh led by Nobel laureate Muhammad Yunus took over in the wake of the protests that drove then-Prime Minister Sheikh Hasina out of the country.

Previously known as East Pakistan, Bangladesh won independence following a nine-month war.

The new agreement, finalized earlier this month, sees Bangladesh purchasing white rice from Pakistan at $499 per ton through the Trading Corporation of Pakistan. The shipment will be delivered in two phases, with the remaining 25,000 tonnes expected in early March.

However, the price of rice is higher than that of rice from Vietnam, which Bangladesh has been importing at $474.25 per ton.

The government has been battling to stabilize the rice market, as prices have risen by 15-20% in recent months, with medium-quality rice selling at around 80 taka ($0.66) per kilo.

To control rice prices, the government is importing more rice from international markets, including through tenders, and has scrapped import duties.