Bangladesh approves purchase of 100,000 tonnes wheat from Russia
Bangladesh has approved the purchase of 100,000 tonnes of wheat from Russia in an inter-state deal, officials at the state grains buying agency said, as South Asia’s top wheat buyer looks to secure supplies.
The wheat is being bought at $267.30 a tonne, which includes cost, insurance and freight, and other port-related expenses.
Russian state firm Prodintorg will supply the wheat, with the first batch of around 52,000 tonnes arriving in the first week of August, one of the officials said.
The import price is slightly lower than the lowest offer of $267.98 a tonne that the state grains buyer received in its last tender to buy 50,000 tonnes of wheat.
Bangladesh imported 200,000 tonnes of wheat from Russia in an inter-state deal in 2017 after Dhaka rejected three cargoes of Russian wheat totalling 150,000 tonnes over quality concerns.
The country has turned to the Black Sea region for wheat in recent months because supply from India has dwindled as Indian grain is needed to meet its growing domestic demand.
The state grains buyer imported 550,000 tonnes of wheat in the year to June, officials said.
Apart from government purchases, private traders import about 5.5 million tonnes of wheat annually to meet growing demand, while the country’s output has stagnated at about 1 million tonnes.
Bangladesh has been among the largest buyers of Russian wheat in recent years. It purchased 1.9 million tonnes of Russian wheat over the July 2018-May 2019 period.
“I think Russia wants to cement its hold on the Bangladesh wheat market which is certainly underlined by the state involvement in this deal,” one European trader said. “Bangladesh is an important market in Asia and a lot of suppliers want it.”
The strong demand for wheat in Bangladesh reflects a shift in consumer preferences towards bread as well as increasing use of wheat as a substitute for more expensive rice by Bangladesh’s growing population of 160 million, the United Nation’s Food and Agriculture Organization (FAO) has said.
Source: Reuters (Reporting by Ruma Paul; additional reporting by Michael Hogan in Hamburg; editing by David Evans)