In the second week of March this year, when FAO DG Qu Dongyu was attending a regional conference in Dhaka, he warned that supply chain and logistical disruptions to Ukrainian and Russian grain and oilseed production as well as restrictions on Russia’s exports would have significant food security repercussions.

“This is especially true for some fifty countries [Bangladesh included] that depend on Russia and Ukraine for 30% or more of their wheat supply,” said Qu Dongyo, advising countries dependent on food imports from Russia and Ukraine to look for alternative suppliers to absorb the shock.

It appears now that Bangladesh did a smart job of strategically relocating its import source for wheat from the Black Sea zone to India, a country next door.

With a yearly import volume ranging from five to seven million tons, wheat is Bangladesh’s topmost imported cereal, making the country the 5th largest importer of wheat in the world. Top wheat importers Egypt, Turkey, Iran, and Bangladesh buy more than 60% of their wheat from Russia and Ukraine.

India overtaking Russia-Ukraine in wheat export to Bangladesh

Up until 2020, Bangladesh’s wheat import volume from India was nothing significant. It was a timely move on Bangladesh’s part in that last year, it started exploring the new market in a bigger way. Shorter shipment times, low freight cost, and geographic proximity makes India one of the preferred wheat exporters to Bangladesh. Indian wheat is transported to Bangladesh via road and rail.

According to the Trade Data Monitor (TDM), India supplied 26% of total wheat imports, equalling Russia, followed by Canada (20%), and Ukraine (16%) in the last marketing year (from September 2020 to August 2021). However, in the first five months of the current marketing year (September 2021 to January 2022), India supplied approximately 2.8 million tons of wheat to Bangladesh and captured 66% of the market share, followed by Ukraine and Russia. During the period, Russia and Ukraine together supplied less than a million tons of wheat (approximately 0.9 million tons), down 40% from the same period in MY 2020-2021.

Headquartered in Geneva and South Carolina, TDM checks and aggregates monthly import and export statistics for over 100 countries through using a harmonized system of commodity codes.

A United States Department of Agriculture (USDA) market analysis states: “While the Russia-Ukraine war will affect Bangladesh’s annual wheat supply, traders are already looking to India, the largest supplier, to make up the volume. The industry also stated it will look to Australia, Canada, and the United States for higher quality wheat.”

Wheat flour prices hit record

High prices of wheat flour (also called atta) have reached an eight-year peak. In March 2022, the average retail price of wheat flour was Tk36.2 per kilogram, which was approximately 17% higher than the price in March of last year. According to a USDA market monitoring report, prices are rising due to higher international market prices, the fuel price hike in November last year, and the Russian invasion of Ukraine.

Bangladesh’s domestic production of wheat meets only 13 percent of its yearly total demand. In Bangladesh, wheat planting occurs in November and December, with harvesting in March and April. Wheat area and production have gradually been decreasing as farmers convert their land to cultivate alternative crops that provide higher economic returns, such as potatoes, vegetables, and Boro rice.

USDA estimates Bangladesh’s wheat production to further fall from an expected 1.13 million tons in MY 2021-22 to 1.1 million tons in MY 2022-23 as the wheat acreage is likely to shrink from 320,000 hectares to 310,000 hectares.

Despite higher international wheat prices, Bangladesh is continuing to import wheat to meet substantial domestic demand. USDA estimates that Bangladesh’s wheat import may go beyond seven million tons in the 2021-22 marketing year.

—-by Reaz Ahmad in Dhaka Tribune, Apr 10, 2022
https://www.dhakatribune.com/europe/2022/04/04/germany-west-to-agree-more-sanctions-on-russia-after-bucha-killings