Bangladesh will take advantage of a slump in global prices for wheat by speeding up imports to build state reserves, and soon plans to issue tenders for 100,000 tonnes of the grain, a top procurement official said on Monday.
Such imports are crucial for the South Asian nation to feed its poor and keep domestic prices stable at a time when political turmoil has hit supply chains and government reserves are at five-year lows.
“We are soon going to issue tenders to import 100,000 tonnes of wheat,” Mohammad Badrul Hassan, procurement director in the Directorate General of Food, told Reuters.
“The food scenario is not like that in 2008 when wheat and rice prices surged to record highs … We can import grain at reasonable prices.”
In 2008, like many countries Bangladesh suffered as record food prices led to huge cancellation of wheat import deals and sparked protests in a country where more than a third of population still lives on less than $2 a day.
Political unrest, accompanied by transportation blockades, over the last few months ahead of an election in January that was boycotted by the main opposition had crippled the country’s supply chain, sending annual inflation higher for the second month in a row in December.
Bangladesh’s state grains agency has so far in the financial year that began in July bought or agreed to buy 300,000 tonnes of wheat in tenders. It is also buying 200,000 tonnes of wheat in a government-to-government deal with Ukraine at $307 a tonne CIF liner out.
Glencore Xstrata in a tender that opened last week offered to sell 50,000 tonnes of wheat to Bangladesh for $303 a tonne CIF liner out, the lowest price offered to the country this fiscal year.
The state buyer imported around 350,00 tonnes of wheat in the previous financial year.
Chicago wheat futures, the global benchmark, are near 3-1/2 year low.
Rice is the staple food for Bangladesh’s 160 million people while wheat consumption is rising, with domestic production having stagnated at nearly 1 million tonnes.