Bangladesh turns to India for wheat as Black Sea disruption pushes up prices
Bangladesh has booked over 200,000 tonnes of Indian wheat since India eased export restrictions, its first significant purchases since 2022. Rising Black Sea disruptions and global prices are driving the shift, with Indian wheat deliveries expected at $305–326 per tonne, mainly by rail.
Bangladesh is turning back to India for wheat as disruptions in the Black Sea region push up global prices and squeeze supplies, Bloomberg reported on Wednesday.
Importers in Bangladesh have booked more than 200,000 tonnes of Indian wheat since India eased its export restrictions in late August, the report said. This marks the first significant Indian wheat sales to Bangladesh since 2022.
The shift comes as the Russia-Ukraine war continues to disrupt grain shipments from the Black Sea, one of the world’s major wheat-exporting regions.
Bangladesh needs to import more than 7 million tonnes of wheat a year. Before India banned wheat exports in May 2022, it accounted for nearly 70% of Bangladesh’s wheat purchases.
Bangladesh later turned to Argentina, Canada, Russia, and Ukraine. About 40% of its imports came from the Black Sea region.
Most Indian wheat shipments to Bangladesh will move by rail. Delivered prices are expected to range from $305 to $326 a tonne, according to people familiar with the matter who spoke to Bloomberg.
Sri Lankan importers have also bought about 60,000 tonnes of Indian wheat recently at around $325 a tonne before shipping, the people said.
India reopens wheat exports
India had restricted wheat exports in May 2022 after domestic prices rose and concerns grew over food security following a heat-hit crop. The move effectively halted regular commercial shipments.
The price of refined wheat flour in Dhaka has risen 17% in the past month, according to Bangladesh’s state-run Trading Corporation. Wheat is the country’s second-most-consumed cereal, so rising prices could add to inflationary pressures as consumer-price growth remains high.
The bigger concern for Bangladesh is affordability rather than availability, Vladimir Zinkovski, head of APAC crops research at S&P Global Energy, told Bloomberg. Higher wheat prices could also increase rice consumption, he said.
India-Bangladesh ties
The wheat trade is also emerging as the two neighbours seek to stabilise ties after relations deteriorated during the interim government led by Muhammad Yunus. Ties remain strained over issues, including former Prime Minister Sheikh Hasina, who is living in India.
Since Tarique Rahman became Bangladesh’s prime minister in February, both sides have signalled an interest in rebuilding engagement. India has said it wants “positive, constructive and forward-looking” relations with Bangladesh, while discussions are underway over a possible Rahman visit to India.
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Source : Business Today
