Home ›› 18 May 2022 ›› Front
Amid rising prices of essentials, supply of wheat has started dwindling in Chattogram, the prime port city of the country.
Mill owners and wholesalers say some new middlemen have emerged in the scene. They are selling wheat at higher prices.
Wheat and flour prices have continued to rise since the Commerce Ministry of India – the world’s second-largest wheat producer - announced a halt to wheat exports.
As of Tuesday, mill owners have bought per maund wheat at TK 1,600-1650 from suppliers at the country’s largest consumer goods market, Chaktai-Khatunganj in Chattogram.
At the beginning of the week the price of per maund wheat was TK 1320-50. Last Sunday it was sold at TK 1500 and on Tuesday it was sold at a higher price than the last two days.
“Many of the suppliers from whom we used to buy wheat could not be reached and those with whom we were able to get in touch said there was a shortage of supply or whatever is available sold at higher price,” said Abu Saeed Chowdhury, owner of JB Food, a flour mill. “We produce 40-50 tonnes of wheat flour per day in the factory but production has also declined due to dwindling supply. If we buy wheat at a higher price and produce flour from it we might incur loss,” said Chowdhury,
Solaiman Badsha, a wholesaler in Khatunganj, said there was a shortage of wheat supplies on Tuesday, adding that suddenly well-known suppliers were absent from the sector and this is an indication of an instability.
The natural tendency of the market is that when a crisis arises new faces known as the second party emerge, who try to regulate the market, he added.
According to port sources, five ships arrived in Chittagong port in the first two weeks of May with a total of 206,000 tonnes of wheat.
Of them, two ships left the port after unloading 55,000 tonnes of wheat. At present 153 thousand tonnes of wheat from three more ships are being unloaded.
Who are the middlemen?
To sell consumer goods in Chaktai-Khatunganj, the importers at first sell the Delivery Order (DO) or Supply Order (SO) of their products to some known faces. Besides, anyone can buy DOs or SOs of any quantity of products but leading importers sell DOs or SOs to their designated dealers or distributors.
If the price of a product goes up or there is a shortage of supply, there is a ‘special middleman group’ called ‘Second Party’ who buys DOs or SOs documents from dealers.
“We usually sell imported wheat to mill owners and sometimes to people known as the second party. We are not sure what they do with it,” said Abul Bashar Chowdhury, one of the top importers of consumer goods in the country.
In the midst of supply and demand instability, various hands are involved in the supply system. This is also a very common trend that exists in the global market.
Despite two days of volatility in the market after the announcement of India’s export halt, there was no rush among businessmen to take delivery of wheat on Tuesday, said Bashar Chowdhry, the importer. “We have sold Indian wheat from our warehouse at no more than TK 1550 per maund.”
The owner of JB Food, Abu Saeed Chowdhury, said the people concerned are not buying because of the high price. Professional mill owners or traders will be at risk of losses by buying goods at higher prices from the second party. Two DO traders on condition of anonymity said, “We buy DOs for sale and deliver goods from importer ships or warehouses to wholesalers at convenient times.”
“Buyers contact us to purchase products. When the market starts to fluctuate, buyers buy at higher prices but in the last two days delivery of wheat has been low,” they said. Meanwhile, the Directorate of Consumer Right Protection, blaming middlemen for causing instability in the consumer goods market, said the crackdown on wheat stockers would begin as soon as the crackdown on edible oil stockers ended.
“We are monitoring the market, several of our teams are visiting Chaktai-Khatunganj,” said Mohammad Fayez Ullah, Deputy Director of the Directorate. “Now there is no shortage of wheat supply.”
