Wheat stock running out

As the import of wheat has stopped, its stock is running out at the government and private levels in the country.

Traders are saying that after India stopped wheat exports, no new import letters of credit (LC) could be opened. The import of wheat from the old LC is almost over. Due to this, the stock of wheat in private mills is decreasing. Mill owners are worried about how the mills will run when it runs out. On the other hand, government reserves have also fallen by half.

In this situation, the price of flour is also increasing in the market. Trading Corporation of Bangladesh (TCB) data shows that flour is being sold at 56-66 per cent higher prices than last year. The price of flour in the retail market has increased up to 20 per cent in the last one month.

However, Food Secretary Md Ismail Hossain said that there is nothing to worry about wheat stock and market. Wheat import will be opened at the private level before the current stock is exhausted. Besides, government reserves will also increase in the next month, he said.

Md Ismail Hossain told Business Post, “The process of importing 100,000 tonnes of wheat from Bulgaria has been finalised for next month which will actually increase government reserves. Besides, Russia is also interested in providing wheat to Bangladesh. There is a negotiation meeting in the next few days, where details including import process and price will be discussed. If everything becomes favourable, Russian wheat will be available.”

“On the other hand, when wheat harvesting will start next month, many countries may start exporting wheat. India has stopped wheat export for food security. They will also start exporting if the food security risk is reduced. All in all, it seems that there will not be much problem,” he added.

Wheat is the second highest demand crop in Bangladesh after rice. According to the Ministry of Agriculture, there is a demand for 75 lakh tonnes of wheat in the country every year. Out of this, 11-14 lakh tonnes are produced in the country while the rest has to be imported. However, according to the Ministry of Food, the annual demand for wheat in the country is 58 lakh tonnes. Of this, the government requires 6 lakh tonnes.

According to the National Board of Revenue (NBR), Bangladesh imported 63 per cent of its total wheat imports from Russia and Ukraine, 18 per cent from Canada and the rest from eight countries including the United States, Argentina, and Australia in the fiscal year 2019-20.

The increase in ship fares after the Covid-19 pandemic and the Russia-Ukraine war changed the import scenario. According to NBR data, from March 1 to May 12 of this year, Bangladesh imported 6.87 lakh tonnes of wheat, 63 per cent of which came from India. The rest came from Canada, Argentina, Australia and other countries.

Last May, India stopped exporting wheat citing food security. Imports from Russia and Ukraine are also suspended due to the war. Due to the increase in dollar price and the price of wheat, not much wheat is coming from other countries. As a result, the wheat stock at the private level is running out, the traders said.

Bashundhara Food and Beverage Industries Limited Executive Director Redwan Rahman told The Business Post, “We are yet to find a way to import wheat. The import of old LC wheat from India has also ended. As a result, our mills are now running with previous stocks. I am worried about what will happen when these are finished.”

According to the information collected by the Ministry of Food, the total stock of wheat in government warehouses was 210,000 tonnes till August 15 last year. Last August 16, the stock of wheat decreased to 148,000 tonnes. However, before India stopped exporting in May, government warehouses had wheat stocks of 120,000 tonnes.

According to TCB, the price of flour has increased by Tk 2-5 per kg in the last one week. In the retail market, unpackaged flour is being sold at Tk 50-52 per kg which was Tk 48-50 per kg a week ago. Packaged flour is being sold at Tk 55-60 per kg, which was Tk 48-55 per kg a week ago.