Wheat import rebounds to two-year high

Bangladesh's wheat imports recovered and hit a two-year high in the first seven months of the fiscal year as prices of the grain cooled and demand from local industries soared.

Between July 1 and January 18 of 2023-24, private and public agencies imported 27.49 lakh tonnes of wheat, an 84 percent increase compared to the 14.92 lakh tonnes imported in the same period a year ago, according to food ministry data.

"It is because of a decline in prices last year. High prices affected grain imports in 2022," said Anup Kumar Saha, executive director of Akij Insaf Group, one of the importers of wheat.

Bangladesh, which meets most of its wheat needs through imports, has been importing reduced amounts of wheat since buying 64 lakh tonnes in 2019-20.

In 2022-23, imports of the grain, used both in households and industries, fell to an eight-year low due to high prices and banks' lack of interest in opening letters of credit (LCs) amid a US dollar shortage.

Private and public importers imported 38.75 lakh tonnes of wheat in FY23, down 3.4 percent from the 40.12 lakh tonnes the previous year.

Imports began to regain pace as ample global production reduced supply concerns and saw wheat prices reduce.

The annual average price of US Hard Red Winter wheat, a benchmark for wheat prices, declined 21 percent year-on-year to $340.4 per tonne in 2023, according to the Pink Sheet, a compilation of commodities prices by the World Bank.

The global average price of US Soft Red Winter wheat dipped 32 percent to $257 per tonne.

Saha said landed prices of imported wheat became tolerable.

Taslim Shahriar, deputy general manager at Meghna Group of Industries, said the price of wheat was low in the global market and domestic consumption had risen.

"This is because the price of rice, a substitute for wheat, has risen."

The grain is now imported from Russia, Ukraine, Argentina, Brazil, and Uruguay.

Md Aminul Islam, managing director of Nabil Group, one of the largest importers of wheat, said problems in opening LCs eased in the first half of FY24.

"So, all of us could open LCs to import wheat," he said, adding that the global supply chain disruption due to the Russia-Ukraine war had normalised, leading to a decline in prices.

Going forward, Saha said business might remain dull in the second half of the fiscal year as consumption reduces because of Ramadan and the summer season.

Shahriar said consumption of wheat-based foods rises in the winter months and falls in summer.

Overall imports are projected to reach 45.36 lakh tonnes in FY24, according to the October-December issue of the Bangladesh Food Situation Report by the food ministry.

Likewise, the US Department of Agriculture, in its December issue of the Grain and Feed update on Bangladesh, predicted that the country's public and private agencies might import 60 lakh tonnes of wheat in the July-June period of the marketing year 2023-24 on the assumption that international prices would be stable and there will be no supply chain disruptions.

The US agency said Bangladesh's food, seed and industrial consumption might increase 5 percent year-on-year to 68 lakh tonnes in FY24.

It expected higher imports and higher domestic and industrial consumption of flour and refined flour this fiscal year.