October 17, 2011
Bangladesh to quicken wheat imports amid low prices
Bangladesh will make use of low wheat global prices to speed up wheat imports to establish its state reserves, according to a top procurement official on Friday (Oct 14).
"This is the right time for buying wheat as global prices slid sharply," Mohammad Badrul Hassan, Director of Procurement at the Directorate General of Food, said.
Early this week, the state grain buyer issued an international tender to buy 50,000 tonnes of wheat, its fourth for the staple in the fiscal year that started in July.
"Over the next few weeks, we will issue two or three tenders to buy wheat," he said, adding that the government at the moment has no plan to float tenders for rice.
The state grain buyer plans to import 900,000 tonnes of wheat in the year to June 2012. It seeks 50,000 tonnes of wheat in each tender.
Its latest tender for wheat that opened on October 10 drew a lowest offer of US$274.10 a tonne, including CIF liner out, sharply lower than previous purchases at US$329.11 and US$309.11.
CBOT wheat futures <Wc1>, the global benchmark, have fallen by 16% since the start of September.
"Currently, we have 230,000-240,000 tonnes of wheat in reserves while we are releasing 20,000-30,000 tonnes of the grain each month for welfare programmes and cut-price sales," the official said.
"So, we need to boost our wheat stocks though our rice reserve is very good and the price at the global market is also high due to Thailand intervention."
Apart from tenders, Bangladesh is to import 100,000 tonnes of wheat from Ukraine at US$320 a tonne, including CIF, in its first government-to-government wheat deal with Kiev.
Bangladesh, which buys 3.0-3.5 million tonnes of wheat a year, switched to cheaper Black Sea suppliers after India banned exports in 2007 amid a global shortage.
Domestic prices of the staples are easing due to plentiful stocks and after neighbouring India last month freed up exports of two million tonnes each of common rice and wheat, the bulk of which are expected to end up in Bangladesh.
However, traders are wary of Indian prices.
"We are incurring losses as prices have come down below import costs since India opened up last month," a trader in Dhaka said.