Wheat imports soar on low global prices

Wheat imports remained strong in the first half of the fiscal year as domestic consumption rose on the back of low international prices, importers said yesterday.

Bangladesh's imports soared 48 percent year-on-year to 29.06 lakh tonnes in July-December of the current fiscal year, according to data compiled by the food ministry.

Private sector traders contributed 96 percent to the total wheat imports.

“The overall consumption is rising. One of the reasons is the price gap between wheat flour and rice. The flour prices are lower than rice,” said Sheikh Wazed Ali, owner of Lakhya Flour Industries at Narayanganj, a trade hub.

Ali, also president of Narayanganj Auto Flour Mills Cooperative, said almost all importers imported wheat to reap the benefit of low international prices.

Wheat prices in the global market are low because of increased production. The US Department of Agriculture in December raised its global production forecast by 2.1 percent to 751 million tonnes for 2016-17 from a year ago.

US hard red winter wheat traded at $148.1 per tonne in October-December of 2016, down from $179.6 a year ago, according to World Bank commodities price data.

Prices of soft red winter variety were $164.3 per tonne in the period, down from $200.6 a year ago.

Wheat flour sold for Tk 24-Tk 32 per kilogram yesterday in Dhaka, down from Tk 25-Tk 34 a month ago.

On the other hand, prices of coarse rice were Tk 35-Tk 38 each kilogram yesterday, according to Trading Corporation of Bangladesh.

The USDA also predicted wheat exports would rise in 2016-17. “Global trade is boosted to a new record with stronger import demand from Asia and Brazil,” said the USDA.

For Bangladesh, the US agency raised its wheat import forecast by 4 lakh tonnes to 51 lakh tonnes during the current fiscal year.

Industry operators said expansion of food processing and confectionary industries and rising health consciousness drive wheat consumption.

Domestic consumption rises 10 percent per year, said Naresh Chandra Deb Barma, director of wheat research centre of Bangladesh Agricultural Research Institute.

“Many new flour mills have started operations in recent years while some existing mills have raised capacity. An increased quantity of wheat is needed to meet the requirements of the mills,” said Bishwajit Saha, general manager of City Group, a commodity importer. City's milling capacity was doubled to 1,500 tonnes a day. 

Bangladesh's wheat consumption stands at 50 lakh tonnes a year but domestic production can meet only one-fourth of the demand. Wheat production was 13.48 lakh tonnes in 2015-16, according to Bangladesh Bureau of Statistics.

Wheat acreage was 4.43 lakh hectares this winter, according to preliminary data from the Department of Agricultural Extension, slightly down from 4.44 lakh hectares last year.