Russia’s decision to withdraw from a grain deal brokered by the United Nations and Turkey has raised concerns among importers and could lead to volatility in Bangladesh’s wheat market.
Russia and Ukraine supply 40% of the country’s wheat demand, making this development significant for Bangladesh.
According to Russia, the deal, which aimed to address a global food crisis by allowing Ukraine to export grain through the Black Sea, expired on Monday and will not be renewed.
The deal’s suspension has already resulted in a price increase of $10 to $15 per tonne of wheat in international markets.
However, due to the current wheat stocks held by traders in Bangladesh, the price is not expected to rise until October. Importers anticipate that the market condition will worsen in the coming days.
The impact of this decision is already being felt in the local market, with the price of wheat traded at the Khatunganj wholesale market increasing compared to the previous day.
Importers and processors in Bangladesh acknowledge that significant global events like the suspension of a grain deal can affect the market, causing fluctuations in supply, demand, and overall market dynamics.
Bangladesh has seen a decline in wheat imports for the past three years due to falling consumption and banks’ reluctance to open letters of credit amid a US dollar crisis.
The country’s wheat imports in FY23 were the lowest in eight years.
Importers and industry experts express concern over Russia’s decision to withdraw from the grain deal, particularly as wheat prices had recently decreased in both international and local markets.
Bangladesh heavily depends on the global market to meet its annual demand for wheat, with imports accounting for 85% of its needs.
The situation remains uncertain, and the market is expected to experience further challenges due to this development.