Wheat market heats up despite ample stock, supply

Wheat markets in Dhaka and Chattogram are heating up despite adequate stock and abundant imports, after neighbouring India banned all exports of this food grain to cool off its domestic market.

Following the edible oil shock that had already left consumers reeling, a price hike of yet another essential commodity is causing buyers to become increasingly spooked. Several brands on Sunday said they are planning to raise flour prices in Dhaka markets by Tk 2 – Tk 6 per kg.

Though the unloading of 132,000 tonnes of wheat is currently underway at the Chattogram port, wheat and flour prices have already gone up in Chaktai-Khatungonj – one of the country’s key essential commodities markets.

Several lighterage ships are unloading the food grain from three mother vessels in the outer anchorage, said port officials. Local businesses added that additional wheat will arrive at the port in the next two days, and a process is underway to import more in the next few weeks.

A number of traders in Chattogram confirmed that the supply of this particular food grain remains normal in the Chaktai-Khatungonj market, but local prices of wheat and flour began rising on Saturday.

These wholesalers were selling wheat for more than Tk 40 per kg on Sunday, an increase of Tk 3 – Tk 4 compared to last week. Flour prices have also gone up by Tk 150 – Tk 200 per maund during this period.

Flour mill owners are currently purchasing Indian wheat from importers for TK 1,500 per maund, while the wheat brought in from Australia and Canada is being sold for Tk 2,000 per maund.

Expressing concerns over the trend, local businesses said the local wheat market is becoming volatile yet again, adding that the food grain’s prices rose for the first time this year following Russia’s invasion of Ukraine last February.

And now the prices are rising for a second time after India’s ban on all wheat exports, and the shocks that hit the wheat and flour markets at the beginning of the Russia-Ukraine war are escalating further, they added.

Abu Saeed Chowdhury, owner of a flour mill in Khatungonj, said, “Wheat prices have gone up by more than Tk 150 per maund. Though the market has enough supply to cover the existing demand, we are forced to buy this food grain at higher prices.

“The prices are going up as importers and large-scale suppliers are taking precautions because of the volatility, triggered by India’s recent announcement of export ban on wheat.”

Some traders said a clear trend of rising wheat prices will be difficult to ascertain on Sunday as this is a government holiday, so not much trading is going on in the Chaktai-Khatungonj market.

Abul Bashar Chowdhury, head of one of the largest wheat importers in the country BSM Group, said the possibility of the local market facing a wheat shortage is slim right now, but prices of this food grain could go up further.

“To prevent the situation from spiraling out of control, the government should intensify talks with India on resuming wheat imports, and focus on keeping the USD rate stable for easier opening of Lines of Credit for wheat imports.”

Brands ready to raise prices in Dhaka

Echoing the same statement given by wholesalers at Chaktai-Khatungonj market, a number of traders in Dhaka said Bangladesh’s wheat imports from Russia, Ukraine and Canada have been dwindling this year due to low production and the ongoing war, causing flour prices to soar.

India’s recent ban on all exports of wheat will cause the wheat and flour prices to soar even further.

Speaking to the Business Post, Bashundhara Food and Beverage’s Chief Executive Officer (Sales) Md Redwanur Rahman said, “Several brands have already raised the price of flour further. Many have set the kitchen essential’s price at Tk 98 per kg.

“The flour with an increased price tag will soon hit the market. We will raise the price of our flour too, but the new rate will be decided on Monday.”

Traders of the capital’s wholesale markets said the price of flour has increased by Tk 300 per 50 kg sack within just a week. Wholesalers at the city’s Moulvibazar and Karwan Bazar are currently selling a sack of atta for Tk 2050, an increase from Tk 1,750 a week ago.

Meanwhile, a sack of maida is being sold for Tk 3,050, which was Tk 2,750 last week.  

Data from the Trading Corporation of Bangladesh show that atta prices in the country rose by 34 per cent, and maida prices by 63 per cent when compared year-on-year.

Loose atta is now being sold for Tk 40 – Tk 45 per kg, a 2 kg packet of atta for Tk 85 – Tk 95. Meanwhile, loose maida is being sold for Tk 55 – Tk 60 per kg, and a 2 kg packet of maida for Tk 115 – Tk 120.

During the same period last year, loose atta was being sold for Tk 30 – Tk 32 per kg, and packaged atta for Tk 32 – Tk 35. Loose maida was being sold for Tk 35 – Tk 36 per kg, and packaged maida for Tk 42 – Tk 45 per kg.