UPDATE 1-Bangladesh approves purchase of rice from Myanmar

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DHAKA, Oct 11 (Reuters) - Bangladesh approved on Wednesday the purchase of 100,000 tonnes of white rice from Myanmar, putting aside worsening relations over the Rohingya refugee crisis, as the government seeks to address a shortage of the staple.

Traditionally the world’s fourth-biggest rice producer, Bangladesh has emerged as a major importer of the grain this year after floods damaged its crops and sent domestic prices to record highs.

Bangladesh’s cabinet purchase committee approved the purchase on Wednesday, its food minister, Qamrul Islam, told reporters.

The rice is being purchased at $442 a tonne, including shipping, insurance and discharge costs.

The transaction with Myanmar is the first state-to-state rice deal between the two countries and comes amid increasingly strained relations.

Myanmar’s security forces have driven out half a million Muslim Rohingya from northern Rakhine state, torching their homes, crops and villages to prevent them from returning, the U.N. human rights office said on Wednesday.

Bangladesh is also set to import a total of 250,000 tonnes of rice from Thailand and India in state-to-state deals to shore up depleted stocks and combat high prices of the staple food.

The government has already secured deals with Vietnam and Cambodia while issuing a series of tenders as it looks to import a total of 1.5 million tonnes of rice in the year to June.

High demand from Bangladesh helped push Asian rice prices to multi-year highs in June.

In August, Bangladesh cut a duty on rice imports for the second time in two months. The lower import duty has prompted purchases by private dealers, with most of the deals being struck with neighbouring India.

Bangladesh produces around 34 million tonnes of rice annually but uses almost all its production to feed its 160 million people. It often requires imports to cope with shortages caused by floods or droughts.

Reporting by Ruma Paul, editing by Louise Heavens