Grain deal stalemate: Wheat importers exploring alternative sources

Wheat importers of Bangladesh are exploring alternative sources to ensure uninterrupted domestic supplies after Russia pulled out of a UN-brokered Black Sea grain deal that assured safe transport of Ukrainian wheat.

Importers say they are currently monitoring the situation, talking to suppliers of alternative sources and will decide on placing orders after a week.

"We have already started looking for alternative sources," Md Aminul Islam, managing director of Nabil Group, one of the traders importing some of the largest quantities.

"We are talking with suppliers of Bulgaria, Romania, Argentina and Brazil to ensure supplies," he said, adding that his firm would decide on placing orders after a week.

Importers say they are currently monitoring the situation, talking to suppliers of alternative sources and will decide on placing orders after a week.

Islam said most private importers have bought wheat from Russia and shipments from the country had stalled following an attack on the Crimean bridge.

"We are waiting. We imported from Bulgaria and Romania several months ago. However, prices of the grain in Romania are high. Prices of Russian wheat are the lowest now," he said.

"I hope the stalemate over the continuation of Black Sea grain deal will be resolved in a week," added Islam.

Last week, Russia halted the Black Sea grain deal that allowed Ukraine to export its grains safely through the sea. It complained that promises to free up its own shipments of food and fertilisers had not been kept, reports Reuters.

Importers called the development a matter of concern for Bangladesh as Russia and Ukraine meet 40 per cent of the country's demand for wheat.

Islam said Bangladesh has enough stocks to meet the requirement for a month. So, there should not be any impact on local market prices, he added. But if the stalemate continues, food prices will be affected globally, he said.

Abul Bashar Chowdhury, chairman of Chattogram-based BSM Group, said his firm was in regular talks with agents of Romania and Bulgaria amidst the uncertainties over the import of wheat from the Russia-Ukraine region.

Amidst the current situation, they are not making any offers for the last two days but they will do so next week, he said.

The Russia-Ukraine war has economically affected both countries and one of their main exports is wheat. They cannot retain stocks for very long, he added.

What matters is how long the current situation will continue. But a solution is bound to come about soon, said Chowdhury.

Anup Kumar Saha, executive director of Akij Insaf Group, said, "Russia is a big factor for the world market. It is not clear what the situation will turn out to be. So, we are worried about the current situation. We are working carefully."

Bangladesh's annual demand for wheat is 70 lakh to 75 lakh tonnes, some 85 per cent of which is met through imports.

Bangladesh's wheat imports fell for a third consecutive year in 2022-23, suffering falling consumption for high prices and banks' sluggishness in opening letters of credit amid a US dollar crisis.

Food ministry data showed wheat arrival declined 3.4 per cent year-on-year to 38.75 lakh tonnes in fiscal year 2022-23. It was 40.12 lakh tonnes in the previous year.

The import of fiscal year 2022-23 was the lowest in eight years.

From July 1 to July 19 of fiscal year 2023-24, the country imported 1,57,130 tonnes of wheat, according to food ministry documents.