Tough conditions get in way of Indian wheat import
Wheat, which was sold at Tk900 per maund in March, is now being sold at Tk1,600 per maund
India has pledged to keep a window open for supplying wheat to its neighbour Bangladesh but on certain conditions that local importers deem very difficult to comply with.
Bangladeshi businesses say they will have to struggle a lot to import the grain on a government-to-government basis.
India has also decided to allow exports through its local businesses. The whole import process will be very time-consuming too – Bangladesh will place its demand, India will review it and give approval and then float a tender for exports, they point out.
Keep updated, follow The Business Standard's Google news channel
The setting of a bar on the export quota will make it tougher for Bangladesh, which is heavily dependent on Indian wheat, to find traders willing to export wheat to the former, they add.
Tariq Ahmed, director (operations) at TK Group of Industries, a leading consumer goods importer, told The Business Standard, "We procure wheat via international traders. Finding new suppliers will be difficult for us as India will allow only its citizens for exports."
"We will have to take part in government tenders too, which is a complex process," he added
The wheat imported has to be given to the government, he noted.
"So, we do not know yet whether the government will give us that wheat back or not. So, there is uncertainty over getting India's wheat," Tariq said.
He also noted that they are worried over not getting supplies of their previously-placed orders.
Heat waves hit wheat yields in India, the world's second-biggest producer of the grain, this year, thereby pushing up prices to new record highs.
In such a situation, India slapped a ban on wheat exports on 13 May to tame domestic inflation, raising concerns over global food security.
The export ban added fuel to the soaring food prices in Bangladesh's market as India turned out to be the largest wheat supplier amid the Russia-Ukraine war that has sent the grain price spiralling.
However, the Indian High Commission in Dhaka said Bangladesh as a neighbour would remain out of the purview of the ban.
But Tareq thinks striking a new deal and negotiation with the Indian government is very time-consuming.
"We do not know all the conditions yet. Our government should talk to the Indian authorities soon. It is necessary to keep wheat imports open to the private sector by easing conditions as much as possible."
As a global supplier, India exports 6.59 million tonnes of wheat to several countries, including Bangladesh, Indonesia, Philippines, UAE, Sri Lanka. Bangladesh alone imported 53% or 3.49 million tonnes of it.
Commerce Minister Tipu Munshi said there would be no problem in importing wheat from India.
"I have spoken to the [Indian] high commissioner, who also told a press conference that imports through the G2G process have not been banned. We can import as much as we need this way," he also said at a press briefing on 18 May.
Big importers in a neighbouring country can get permission if they want. There is no obstacle to 100% import. "So, India's ban will not affect us," he pointed out.
Indian wheat prices double in two months
Indian wheat prices have almost doubled in the last two months since 25 March owing to a crisis in the global market following the Russia-Ukraine conflict that put supplies from the region on hold.
Wheat, which was sold at Tk900 per maund in March, is now being sold at Tk1,600 per maund.
Entrepreneurs think that if prices of new wheat that will come under government management will actually go up further.
A senior official of Meghna Group told TBS that prices of Indian wheat have now crossed $400 per tonne from $200 per tonne. "We are not sure how much the price of wheat will go up even if the government can import wheat by going through various steps in the G2G system," he said.
Food Secretary Dr Mosammat Nazmanara Khanum said, "We used to get wheat from Russia, Ukraine and India at lower prices than in the United States, Canada and Australia. We are now trying to procure from India after the cut-off of supplies from Russia and Ukraine."
"We hope to get wheat from India as per its commitment. But we have to pay more because of its crisis globally," she added.
