'We will benefit from Russia-Ukraine grain deal'

Russia and Ukraine have signed an agreement to resume grain export from Ukraine. How will this agreement impact Bangladesh?

Nearly 30 per cent of the global grain supply used to come from Russia and Ukraine. Since the war, the supply from both countries has been badly hampered. Due to this, the price of grain worldwide has increased. This agreement will help decrease the price of wheat worldwide. If the supply increases, other exporting countries will also be forced to reduce the price. Not just wheat, the price of mustard, oilseed and corn would also get slashed. If prices in the global market go down, we can import grains at reduced price. We will reap the benefits of immediate reduction of price. We can also import goods from Ukraine.

Have you contacted the exporters in Ukraine about importing from them since the agreement has been signed?

Usually, 90 per cent of our imports from Ukraine happen through a third party supplier. We have already started contacting those countries. There are a lot of challenges here. Due to the war, the banking system, communication and many other sectors in Ukraine are in tatters. For example, the infrastructure required to get the export goods into the ships, to bring the goods from the warehouse to ports, is no longer in place. Whether the banks in Bangladesh will provide bonds, is another issue. Now that an agreement has been reached, I hope this will no longer be a problem. In the agreement, they agreed to open three ports for now. When the war broke out, 100 ships full of goods got trapped. Ensuring the return of the sailors of those ships is another issue. After they overcome these challenges, importing from that country will return to normal.

Due to the war, import of food grains from Ukraine was stopped. Even though there was no embargo, nothing was imported from Russia. How will this agreement help us in importing goods?

Even before the war, from the previous financial year the volume of import of food grains from Russia and Ukraine, especially of wheat with less protein, was going down. The main reason for that was India opening its market and emerging as an alternative source. After the ship fare got hiked, it cost $70 to import one tonne of wheat from Russia and Ukraine. The same quality wheat could be imported from India for 50 per cent less ship fare. Because of this, even before the war we were importing more from India instead of Russia and Ukraine. Due to the ongoing war, we couldn’t import wheat from Russia. Just as India stopped exporting, Ukraine has opened its market. If India doesn’t open its markets, we can now import from Ukraine or some other country.

Even before the agreement, the global price of wheat was going down. After the agreement, the price of wheat reduced by 6.25 per cent in a day in commodity exchange. Will this have any impact in the country?

After the price of wheat got adjusted a bit in the global market, the price in local markets has also gone down. It’s true that due to the unusually high rate of US dollar in the country, we are not getting full benefits of this price reduction. An example will make things clearer. Imagine, the price of wheat in the global market reduced by 15 per cent in one month. But in Bangladesh, the exchange rate of US dollars increased by 18-19 per cent. So, naturally the cost of import is not lowering that much. But still, the price in the global market has reduced. When the price is further adjusted, the price will reduce in the local market.

Multiple embargos have affected wheat import, reduced the volume of import. Will this reduction of import cause a temporary crisis?

I don’t think there will be any crisis. In Europe, countries are starting to harvest wheat. By the end of this year, Brazil, Argentina, Canada and Australia will enter this list. After the agreement, if we can import wheat from Ukraine normally, there won’t be any crisis. But still, we have to continue our efforts to relax the restriction on importing wheat from India at the government level. Then we can be hopeful of not facing any problems here in Bangladesh.