Several Checks on the Wheat Import Route to Bangladesh
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Wheat is the second largest staple food after rice in Bangladesh. Local production of Wheat meets approximately 15 percent of total demand. Due to a lack of improved varieties, Wheat acreage, and production is gradually decreasing. In addition, farmers generally get higher returns when planting fruits and vegetables. Post forecasts MY 2023/24 Wheat harvested area and production at 300 thousand hectares and 1.1 million MT, down approximately 3.0 percent from the MY 2022/23 USDA official estimate. Since 2015, the Wheat cultivation area has decreased by 2 to 3 percent annually. The post also estimates the MY 2022/23 Wheat harvested area at 310 hectares and production at 1.1 million MT, the same as the USDA official estimates.
Russia and Ukraine have become major Wheat sources for Bangladesh after India’s ban on its shipment, thanks to a United Nations and Turkey-brokered Grain deal that allowed moving the cereal from Ukraine over the Black Sea. The neighboring country had become a significant source of Wheat for Bangladesh as businesses found imports cheaper and more convenient due to the shorter shipment period, low freight cost, and geographic proximity, said the US Department of Agriculture in a report on Bangladesh earlier. The report said India accounted for 67 percent of Bangladesh’s Wheat imports, followed by Canada, Ukraine, Australia, and Russia in the marketing year 2021-22.
Abul Bashar Chowdhury, chairman of BSM Group, a Chattogram-based commodity importer, said: Our imports from the Black Sea region almost stopped for several months after the war began. Now, Ukraine and Russia are gradually becoming significant sources of low-protein Wheat. Bangladesh produces around 11 lakh tons of Wheat against an annual requirement of 75 lakh tons, meaning the rest is imported.
Russia, Ukraine, and Canada were now significant Grain sources after the Black Sea deal, said Md Aminul Islam, managing director of Nabil Group, one of the largest Wheat importers. Overall import from the three countries would be around 14 lakh tonnes so far this fiscal year, he said. “The problem is now opening of letters of credit for banks’ lack of interest amid dollar shortage. Wheat imports will increase if this problem is over,” Islam explained.
According to AgFlow data, Bangladesh’s Wheat imports totaled 1.2 million tons in Q1 2023. Ukraine shipped 0.2 million tons of Wheat in the last month, followed by Canada (55,000 tons), Russia (54,000 tons), and Romania (53,755 tons). However, it takes longer now to import Wheat from Ukraine because of several checks on the way, said Taslim Shahriar, senior assistant general manager of the Meghna Group of Industries.
Wheat and Wheat Flour Price in Bangladesh
Wheat prices have also been rising since April 2022 due to the supply shortage. In February 2023, retail and wholesale Wheat prices were BDT 56.85 ($0.53) and BDT 54.1 ($0.51) per kilogram, up over 80 percent from last year. Wheat Flour Prices Hit Record High Market prices of all Wheat and Wheat flour types have remained high throughout MY 2022/23. In January 2023, the price of unpacked coarse Wheat flour (also called aata) reached a record high of BDT 61.6 ($0.58) per kilogram.
The appreciation of the U.S. dollar against the Bangladeshi taka also put upward pressure on prices as Bangladesh is a net Wheat importer. The demand for all types of Wheat flour has significantly decreased at the consumer level due to the high prices. Industry contacts mentioned that prices may drop slightly after the Wheat harvest in April-May 2023; however, the overall increased prices of Wheat and Wheat flour will continue throughout the calendar year 2023.
Other sources: THE DAILY STAR
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