Wheat market shows signs of recovery

Over the past decade or so, food habits have undergone a significant change in Bangladesh, from the lower income families to the upper classes. Ruti (flat bread) is being eaten for breakfast, rice for lunch and many have ruti again for dinner, instead of rice. These changed eating habits pushed up wheat exports from 1.4 million (14 lakh) tonnes to 7.5 million (75 lakh) tonnes in the 2020-21 financial year. Bangladesh has become the fifth highest wheat importing country in the world.

The Russia-Ukraine war, however, made an impact on the world wheat market from April this year and prices shot up. Bangladesh's wheat import came to a halt from its main sources, Russia, Ukraine and, most recently, India. In the 2021-22 financial year, Bangladesh only managed to import 4 million (40 lakhs) of wheat.

Now, however, a glimmer of hope has arisen with wheat prices falling in the world market. On Friday, Russia and Ukraine signed a historic agreement regarding the export of food grain, including wheat. As a result of this agreement, signed in Turkey, Russia will relax its blockade of the Black Sea so that Ukraine can export its food grain through that route.

Turkey says, this agreement will make it easy for both Ukraine and Russia to export food grain through the Black Sea. This has opened the possibility of Bangladesh being able to import wheat from Ukraine and Russia. Around 60 per cent of Bangladesh's wheat imports come from these two countries.

Chief operating officer Anup Kumar Saha of Nabil Group, one of the main wheat importing companies of the country, told Prothom Alo, "We hope that the government takes diplomatic measures for the import of wheat through government and private channels, following the agreement signed between Russia and Ukraine." Incidentally, around 90 per cent of the imported wheat comes through the private sector.

At this time of the year, fresh crops of food grain are harvested in Russia, Ukraine, the Black Sea region, India, Pakistan and Central Asian countries. Around 40 per cent of the wheat produced in the world comes from this region. The main agro-export of the area is wheat. The remaining wheat is produced in France, Canada, Australia, the US and a few other countries. The quality of wheat produced in these countries is good and is costly too. Basically Middle Eastern and developed countries import wheat from these countries.

In other years, around this time Bangladesh begins the process to import 1 million to 1.5 million tonnes of wheat. According to the daily food grain situation report of the food ministry, so far in the current 2022-23 financial year, only LCs for the import of only 27,880 tonnes of wheat have been finalised so far.

Flour prices go up by 50 to 56 per cent

According to the government-run Trading Corporation of Bangladesh (TCB), over the past one year the price of flour -- both atta (wholemeal wheat brown flour) and maida (white wheat flour) -- has increased by 50 to 56 per cent. After India stopped wheat exports in May, the price of wheat and rice became almost the same. The cost of wheat import from the global market in Bangladesh is from Tk 38 to Tk 50 per kg. And rice is being imported for Tk 40 to Tk 50 per kg.

Meanwhile, according to this month's USDA (United States Department of Agriculture) report on the state of the global food grain market, Bangladesh's wheat imports may drop from 7.5 million tonnes to 7 million tonnes due to the high costs. It said that rice consumption in Bangladesh this financial year may increase by around 800,000 tonnes to 36.8 million (3 crore 68 lakh) tonnes. USDA feels that the pressure on rice has mounted due to the inflated costs of wheat. In the meantime, the price of rice has also escalated in the global market. Even after the government has reduced import duty on rice, imports are still not satisfactory.

Speaking to Prothom Alo, food secretary Md Ismail Hossain told Prothom Alo, "We are now trying to import wheat from countries outside of India. We have already held talks with Bulgaria, Canada and quite a few other countries. After the agreement signed between Russia and Ukraine, we are also keeping up efforts to import from there."

Bangladesh should have long-term agreements with the main wheat exporting countries of the world and take measures to buy wheat in advance. The government has to take an initiative to work with the private sector importers in this regard
AMS Shawkat Ali, former agriculture secretaryi

OMS allocations fall

According to food directorate sources, a large percentage of the poor in the country depends on the Open Market Sales (OMS) of the government for rice and atta (brown flour). But over the past one month the allocation of the two main food commodities, rice and flour, has been reduced in OMS. Till May, each dealer was given two tonnes of rice and 1.5 tonnes of atta. From this month only 500 kgs of atta is being supplied.

The atta sales are exhausted within 11:00 to 11:30 in the morning. The people approach the dealer outlets all day, waiting to buy atta. By the afternoon, rice sales are exhausted too and so the poor people are even unable to buy their essential food through OMS. Under the OMS programme, rice is being sold at Tk 30 a kg and atta Tk 18 a kg. In the market, atta is sold for Tk 40 per to Tk 52 per kg. And coarse rice is sold for Tk 52 per kg and fine rice Tk 80 per kg.

The food ministry's daily food grain report on Thursday stated that there is 164,000 (1 lakh 64 thousand) tonnes of wheat in government godowns at present. Generally the stock is 300,000 to 400,000 tonnes at this time of the year. The rice stock, on the other hand, is quite good at Tk 1,424,000 (Tk 14 lakh 24 thousand) tonnes. The government has planned to procure 200,000 tonnes of wheat from local sources, but so far has only managed 20 tonnes. And 834,000 tonnes of rice has been procured so far.

Long-term agreement needed

Former agriculture secretary AMS Shawkat Ali, speaking to Prothom Alo, said, "In our food habits, wheat comes immediately after rice. And given the global political circumstances as well as the impact of climate change, this sort of instability will often arise."

He said, "Bangladesh should have long-term agreements with the main wheat exporting countries of the world and take measures to buy wheat in advance. The government has to take initiative to work with the private sector importers in this regard."