Wheat imports may go up further
Bangladesh's wheat imports and consumption are likely to go up further this fiscal year, driven by resilient domestic demand and lower international prices, said industry operators.
Imports are expected to hit 60 lakh tonnes at the end of the current fiscal year, posting a 5.44 percent gain year-on-year, said the US Department of Agriculture recently.
Two industry operators said import of grain may exceed 60 lakh tonnes this fiscal year because of increased consumption as a substitute to rice, the staple food.
The USDA revised upward Bangladesh's wheat consumption forecast to 73 lakh tonnes for the current fiscal year, up three lakh tonnes from its March forecast on increased consumption as an alternative to rice in flood affected areas.
“A lot will depend on rice prices. Demand for wheat will rise if rice prices remain at the current level in the domestic market,” said Abul Bashar Chowdhury, chairman of BSM Group, a Chittagong-based importer.
Price of coarse rice, which is consumed mostly by poor and lower middle-income people, dropped marginally from a record high of Tk 47.30 per kilogram in June.
Retail prices of coarse rice were Tk 42-45 per kilogram yesterday thanks to increased imports after reduction of import duty by the government to 10 percent from previous 28 percent.
Yet, prices of the grain was Tk 16 higher a kilogram than wheat flour. Locally known as ata, retail prices of wheat flour were at Tk 26-34 each kilogram in Dhaka city yesterday, according to data from the Trading Corporation of Bangladesh.
Chowdhury said the demand for wheat goes up when the prices of rice remain higher. Import may rise by 10 percent from what came in last year, he said.
Bangladesh's wheat import hit a new high at 56.90 lakh tonnes in fiscal 2016-17, up 30 percent year-on-year, due to low prices, a shift in consumers' diet preference and flourishing bakery market.
This was the fifth consecutive year when wheat arrivals rose to meet growing domestic demand as local production meets one fifth of the annual demand.
The USDA estimated Bangladesh's wheat production to be 3 percent lower year-on-year at 12.5 lakh tonnes in fiscal 2016-17 because of a reduction in cultivation area as some farmers sought to avoid the risk of a recurrence of wheat blast.
The agency forecast wheat production at 13 lakh tonnes this fiscal year. Imports may drop if domestic production rises, said Mustafizur Rahman, deputy managing director of Bashundhara Group that also markets flour.
He expected that the overall arrival of the grain might be 65-68 lakh tonnes at the end of the current fiscal year.
Bangladesh sources a majority of the wheat from Russia and Ukraine followed by Canada, Argentina, Australia and the USA, according to market operators.