After Russia and Ukraine, Bangladesh's wheat import halted from India too

After the outbreak of war between Russia and Ukraine, India became Bangladesh's major source of wheat import. However, India has halted wheat exports since Friday. The price of wheat was high already in the Bangladesh market, and this decision has pushed up prices further.

India's Directorate General of Foreign Trade (DGFT) under the country's commerce ministry, in a circular issued on Friday, said that they had imposed this ban in order to ensure their own food security. The prohibition will come into effect shortly. Wheat can be exported on two conditions -1. Against the letters of credit (LC) that have already been opened and non-revocable, and 2. if the Indian government gives permission in response to requests from the governments of countries facing food deficit.

Bangladesh's food ministry believes that even if India halts exports, the Bangladesh government will still be able to import. The concern is whether the private sector will be able to import wheat. A large part of the wheat coming to the country is imported by the private sector.

Food secretary Mosammat Nazmannahar Khanum, speaking to Prothom Alo, said a deal has already been signed at an official level to import 300,000 tonnes of wheat from India. Of this, 100,000 tonnes will reach the country on Tuesday. She said, "Talks are on for further agreements with India to import more wheat. If the private sector wants help in importing wheat, they must apply in writing. We will certainly try to assist through the foreign ministry."

Wheat is Bangladesh's second main crop. The country has an annual demand of 30 million (3 crore) tonnes of rice and 7.5 million (75 lakh) tonnes of wheat. Around 1.1 million (11 lakh) tonnes of wheat is produced in the country and the rest is imported. According to the National Board of Revenue (NBR), from 1 July till 30 April in the FY2021-22, a total of 5,546,000 (55 lakh 46 thousand) tonnes of wheat was imported. According to the projection of the US Department of Agriculture (USDA), Bangladesh's wheat export will be 7.5 million (75 lakh) tonnes.

According to NBR records, in FY2019-20, 60 per cent of Bangladesh's wheat import was from Russia and Ukraine, 18 per cent from Canada and the rest from eight other countries including the US, Argentina and Australia.

Wheat import from India is irregular. When production is high, the country opens its doors to export. For two years Bangladesh has been importing a considerable volume of wheat from India. In 2020-21, 45 per cent of Bangladesh's wheat imports were from Russia and Ukraine, 23 per cent from Canada, 17 per cent from India and the rest for a few other countries.

Towards the end of February, after Russia's attack on Ukraine, Bangladesh's imports from the two countries came to a stop. After that, traders in Bangladesh began importing wheat from India.

According to NBR, from 1 March till 12 May Bangladesh imported 687,000 (6 lakh 87 thousand) tonnes of wheat. No wheat came from Russia and Ukraine in this span of time, 63 per cent came from India and the rest from Canada, Argentina, Australia and other countries.

According to India's commerce ministry website, the country exported around 6.6 million (66 lakh) tonnes of wheat in 11 months (April-February) of its 2021-22 financial year. And the destination of 57 per cent of this wheat was Bangladesh.

Abul Bashar Chowdhury, chairman of the Bangladesh's top food import business BSM Group, told Prothom Alo, after Russia and Ukraine, the major source of low protein wheat is India. With the closure of exports, initiative should be taken now from a government level to import wheat from India. There are not many alternative countries as sources of low protein wheat. He said, it will cost high to import from other countries.

Maida (white flour) is produced in the country from high protein wheat. The source of this wheat is Canada. And distributors market atta (brown flour) by produced from low protein wheat mixed with an amount of high protein wheat. As it was, the price of atta and maida was already spiralling in the local market.

According to the state-run Trading Corporation of Bangladesh (TCB), the price of atta in the Dhaka market was Tk 38 to Tk 45 per kg, that is, 34 per cent higher than a year ago. And loose (unpackaged) maida was Tk 56 to Tk 60 per kg. This year the price of this has gone up by 63 per cent. As a result, the price of biscuits, bread and other food items as well as roti and paratha in restaurants, has gone up considerably.

Meanwhile, the moment news of India's halt to exports spread yesterday, Saturday, the price of wheat shot up in the wholesale market. At Chattogram's large wholesale market Khatunganj on Saturday, the price of wheat went up by Tk 1.34 per kg and was sold at Tk 40.19 per kg.

The price of rice has been high over the past two years in the country, while the price of wheat was somewhat reasonable. That too is now going out of the reach of the lower income group. People are at a loss with the high prices of rice, dal (lentils), oil, sugar, meat, eggs and other essentials.

Former agriculture secretary AMM Shawkat Ali, speaking to Prothom Alo, said that pressure on rice will mount if the price of wheat goes up. And rice production was harmed to an extent by cyclones and floods in the haors. And the rainy season is ahead. The global market for food products is unstable too. He said, the government should come to an agreement with India and other wheat producing countries. It can also media for wheat import through the private sector.

Shawkat Ali went on to say, the government should hold talks with India immediately. This will now put to test the Bangladesh government's friendly relations with India.

* This report appeared in the print and online editions of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir