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Consumers are in trouble as wheat prices have rapidly gone up in the country, with insiders saying that is more than rice prices.
Rice is the staple food grain of the majority in Bangladesh. However, because flatbread is less expensive than rice, it is popular among rural and the low-income bracket.
Wheat, the country’s second most important food crop, is mostly met by imports from the global market.
Wheat was once imported from Russia, Ukraine, India, Canada, Argentina, and Australia.
Even before the Russia-Ukraine conflict, India had become dependent on wheat imports.
While Russia launched a war on Ukraine in February of this year, the food crisis began owing to challenges in global supply chains.
Meanwhile, Bangladesh has been contending with a rise in global price levels from a shortage of wheat from Russia and Ukraine.
Attempting to import wheat from India at a higher price, has not been successful as expected.
As a result, the price of wheat is now breaking all previous records.
In the country’s largest consumer products wholesale market in Khatunganj that wheat prices have jumped at the wholesale level within a week.
Wheat prices climbed on concerns that Russia’s war with Ukraine will worsen in recent days.
At the moment, the price of Indian wheat has risen by Tk1,700 per maund (37.32kg.)
Even a week earlier, it ranged between Tk1,520 and Tk1,530 per month.
On the other hand, Canadian wheat traded higher from Tk2,100 to Tk2,300.
Following the sharp rise in wheat prices in the wholesale market, almost all flour mills have raised the price of wheat flour (atta) and all purpose flour (maida) in retail markets.
Demand
Meanwhile, businesses say that Indian or Eastern European wheat is mostly used in the country for flour processing, as it structurally strong.
Due to a shortage of European wheat linked to the Russia-Ukraine war, the majority of the flour is manufactured from Indian and homegrown wheat.
On the other hand, soft Canadian or Australian wheat is utilized to manufacture flour.
That is one-tenth of domestic demand.
Due to a shortage of wheat in India, the price of this grain has risen the highest in the country.
As a result, the price of flour has risen at a significantly faster rate than the national average.
They believe that the price of flour is higher than the cost of rice, causing a major dilemma for the low-income.
East Delta University vice-chancellor and economist Prof Muhammad Sikandar Khan said that flour is an essential commodity for the poor.
“Their daily need for carbohydrates can be met with flatbreads made of flour. But as the price of flour is rising faster than the price of coarse rice, the cost of living for the average person will skyrocket,” he added.
Although rice prices have risen, they have not yet reached abnormally high levels, as 90% of it is produced in the nation.
However, because the price of flour is higher than the price of coarse rice, it would threaten the food security of the country’s underprivileged people.
He thinks the government should prioritize this issue.
Rates
According to the TCB’s daily market rate statistics for October 10, the price of flour has increased by an unusual amount within a month.
The price of loose atta has risen by more than Tk8 per kg to Tk55-Tk56, while the price of packaged atta has risen by more than Tk4 to Tk60.
The price of loose maida has stayed nearly constant at Tk60-61, while the price of packaged maida has risen by Tk5-6 per kg.
Although coarse rice may be purchased in the open market for Tk55-56 per kg, flour must be purchased for Tk58-60 per kg.
The owners of flour mills are also concerned that the price of flour may increase further in the future.
According to experts, India’s wheat issue is mostly the result of the Russia-Ukraine war.
The two nations provide for 28% of global wheat production.
Bangladesh has not imported a substantial volume of wheat from Russia-Ukraine in recent years, but the global market’s dependence on India has expanded due to the war situation.
As a result, India’s own reserves began to fall.
Also, in order to secure its own food security, India began gradually reducing wheat exports.
Food production was disrupted in India’s wheat producing regions in March and April.
As a result, the average wheat production in India has decreased from 111.43 tonnes to 106.41 tonnes.
Despite the crisis, India exported 1.4 million tons of wheat to the global market in April.
However, because of the ongoing Russia-Ukraine war, the Indian government is considering export limitations due to excess demand.
Supply chain woes
Transportation facilities, according to traders in the country, are one of the reasons for the country’s recent dependency on wheat imports from India.
Bangladesh has access to transportation to import wheat from India.
In other words, this dependency arose as a result of the ability to import quickly and cheaply.
At the moment, different countries around the world offer wheat export at comparatively low prices, but owing to shipping costs and time requirements, Bangladesh is more interested in purchasing from nearby countries such as India.
As Indian companies’ participation in Bangladesh’s import auctions has dropped, the government is being forced to acquire wheat at higher costs from corporate entities in other countries, including Singapore.
Traders feel that this has fueled the country’s wheat market even more.
When asked, Md Nurul Alam, importer and owner of A Zaman & Brothers at Khatunganj wholesale market, and director of the Chittagong Metropolitan Chamber of Commerce, said that India has become a supply country for wheat shipments to Bangladesh.
The import of Indian wheat was profitable due to the quality and price of wheat, particularly for manufacturing flour.
However, the Indian government’s policies in recent months have caused numerous crises in wheat exports for suppliers, he also said.
As a result, the uncertainty surrounding Bangladesh’s wheat market remains amid the current circumstances.
In the current situation, he believes that controlling the flour market is impossible without supply of Indian wheat.
Meanwhile, traders claimed that the prospect has arisen due to bearish market conditions following the recent Russia-Ukraine grain agreement.
However, as the dollar’s value rises, traders are concerned about privately imported consumer goods, including wheat. No company wants their money to be wasted.
They feel that transitioning from the current situation is impossible without the government regulating the rate of the dollar or restoring regular food supply ratios.
(DT)
