Wheat imports poised to rise in Bangladesh

26.10.2016

The import of wheat is likely to rise 5 per cent to 4.7 million tonnes by the end of the current fiscal year, spurred by higher demand in the bakery industry, according to the US Department of Agriculture (USDA).

The import forecast has been raised because new bakery products are expected to drive higher consumption, said USDA in its latest Grain and Feed Update on Bangladesh released last week.

Total import of the cereal rose 18 per cent year-on-year to 4.48 million tonnes in fiscal 2015-16, said USDA, citing customs data.

The US agency's prediction comes at a time when import of the grain is rising. In July to September, wheat imports rose 77 percent to nearly 12 lakh tonnes year-on-year, according to the food ministry's data.

However, rice imports slumped, depressed by a duty hike by the government at the beginning of the fiscal year.

Wheat and flour traders also linked rising imports to higher consumption of wheat flour by a section of low-income population in the wake of rising rice prices.

"We had good sales in the last three months. It seems that many people switched to flour as its price was lower than rice," said SK Wazed Ali, president of Narayanganj Flour Millers Cooperative Society.

In September, the USDA said the wholesale and retail prices for coarse rice in Dhaka and Gazipur were Tk 32.44 and Tk 34.67 a kilogram respectively. These prices were 17.45 percent and 10.66 percent higher than in the same period last year, it said.

Rice prices began rising in mid-2016, driven by a reduced supply in response to the government's purchase of the coarse category of the grain at Tk 32 a kilogram and a duty spike on imports.

For the same month, the wholesale and retail prices of wheat flour were estimated at Tk 21 and Tk 24 a kg, according to the US agency.

Wheat flour is approximately Tk 13.66 less expensive per kilogram than rice at the retail level, which, for some consumers, is enough to influence their buying decisions, said the USDA.

Golam Mustafa, manager of NC Trading, a wheattrading firm, said a large number of  people in rural and urban areas now eat home-made bread. Demand for fast food also rose over the years, he added.

Wheat imports hit the highest level in three decades last fiscal year, buoyed by reduced international prices and increased demand from food manufacturers. The private sector accounted for 90 percent of the imports, according to industry operators.

Over the last four years, local farmers have been growing wheat on more lands, raising total production to 1.3 million tonnes on average a year.

But local production could meet only a fourth of the annual demand, which according to USDA estimates, would be 6 million tonnes in the year 2016-17, up from 5.5 million tonnes in the previous year.

The US agency kept its forecast on wheat production this winter unchanged at 1.33 million tonnes.


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