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Wheat imports soar on lower global prices

Wheat imports in the 11 months to May have exceeded last year’s total, boosted by increased demand for flour and wheat-based snacks as the grain is cheaper than rice, market operators said.

Bangladesh imported 34.03 lakh tonnes of wheat between July 1 and May 25 of the current fiscal year, which is 26 percent higher than the full-year import in fiscal 2013-14, according to food ministry data.

Private traders accounted for 91 percent of the total imports during the period thanks to low prices in the global market that has allowed local businesses to sell the cereal cheaper.

“Prices of rice remained higher than wheat flour on the domestic market. It may be one of the factors behind soaring imports this year,” said Anup Kumar Saha, business director of ACI Ltd.

He also linked higher wheat imports to a lower opening stock of wheat at the beginning of the fiscal year in July.

Currently, the lowest retail price of wheat flour is Tk 28 per kilogram, whereas lowest retail price of rice, the staple food, is Tk 30 per kg, according to the Trading Corporation of Bangladesh.

More affordable prices of wheat flour have increased consumption of wheat-based food. It appears that a section of low-income people have shifted to wheat because of a price gap, said Abul Bashar Chowdhury, chairman of BSM Group, a Chittagong-based commodity importer.

In line with the fall in prices of wheat in the global market, wheat prices have also declined in the domestic market over the past several months. Prices of wheat in 2015 are lower than the previous two years, said Chowdhury.

“Health consciousness also drives its consumption.”

Bangladesh annually consumes 40 lakh tonnes of wheat and its demand rises with population growth, heightened health consciousness, and higher consumption of wheat based snacks such as bread and biscuits.

Three-fourth of the demand is met with imports.

Earlier, the US Department of Agriculture’s Foreign Agricultural Service (FAS) said wheat consumption in Bangladesh is likely to rise to 47 lakh tonnes this fiscal year from 43 lakh tonnes a year ago.

The FAS report said wheat consumption projection has been raised “on expectations of competitive international wheat prices” mainly because of its strong global supply.

Chowdhury said wheat import and consumption may go further up after the government imposes 10 percent regulatory duty on its substitute — rice.
Source: The Daily Star