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UPDATE 1-Bangladesh to import 200,000 T of wheat from Russia at $245/T
February 8, 2017 / 10:15 AM / 8 months ago

UPDATE 1-Bangladesh to import 200,000 T of wheat from Russia at $245/T

* State grains buyer to import 500,000 T wheat in year to June

* No plan to import rice despite a spike in prices of the staple (Add quotes, details)

By Ruma Paul

DHAKA, Feb 8 (Reuters) - Bangladesh will import 200,000 tonnes of wheat from Russia in a government-to-government deal, the head of the state grains buyer said on Wednesday, as South Asia’s top wheat buyer looks to build its reserves.

The first batch of 55,000 tonnes of wheat is arriving on Feb. 18, Badrul Hasan, the head of the Directorate General of Food, Bangladesh’s procurement agency, told Reuters.

Bangladesh will pay $245 a tonne, which includes cost, insurance and freight, and other port-related expenses.

The price for Russian wheat in the Black Sea region, from where Bangladesh imports wheat as supply from India dwindled, was $186 per tonne for the 12.5 percent protein variety for February supply, on a free-on-board (FOB) basis at the end of last week, according to agricultural consultancy IKAR.

The import price is slightly lower than the lowest offer of $248.26 a tonne that the state grains buyer received in a tender to buy 50,000 tonnes of wheat, which it later scrapped.

The deal comes about nine months after Bangladesh rejected three cargoes of Russian wheat, totalling 150,000 tonnes, over quality concerns.

A delegation from Russia’s grain-quality watchdog, part of the state Rosselkhoznadzor, subsequently visited Bangladesh and agreed to send copies of grain quality certificates from the Russian centre along with future supplies.

The new supply is made by a firm in which Russian government holds a stake, Russian agriculture ministry told Reuters. However, the deal is commercial and Russian state firms are not involved in the deal.

Bangladesh’s state grains buyer plans to import 500,000 tonnes wheat for the current financial year ending in June, but has no plan to import rice to curb the prices of the staple in the domestic markets, Hasan said.

“This is a win-win situation for both farmers and consumers,” he said.

A spike in rice prices in the domestic markets caused Bangladesh’s annual inflation rate to pick up again in January after a brief fall in the previous two months.

The world’s fourth-biggest producer of rice with around 35 million tonnes, Bangladesh consumes almost all of its production.

In 2015, Bangladesh rejected French wheat shipments after the state buyer faced severe criticism for importing wheat from Brazil that was later found to be of poor quality.

Apart from government purchases, private traders import about 4.5 million tonnes of wheat annually to meet growing demand, while the country’s output has stagnated at about 1 million tonnes. (Reporting by Ruma Paul; Additional reporting by Polina Devitt in Moscow; Editing by Christian Schmollinger and Amrutha Gayathri)

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