Agri Biz
Wheat flour costs bounce to record high
Consumers pay the highest ever prices to buy wheat flour as supply and private stocks of the grain slumped in the local market in the wake of a dip in imports since the starting of the Russia-Ukraine war.
Retail prices of wheat flour, which are consumed by many, hit Tk 50.10 per kg in Dhaka in September of the present year, the highest since July 2008, according to data from the Food and Agriculture Organization (FAO).
September’s price was 62pc higher than what it was in previous year.
On October 4, retailers sold slight wheat flour at Tk 54 to Tk 55 per kg in Dhaka, which was 10p higher than that a month ago and 62pc above the prices a year ago, shows market prices data compiled by the Trading Corporation of Bangladesh.
Importers and processors said the prices of wheat, used widely by biscuit and bakery makers, jumped driven by increased prices in the international market, rising cost of the USD and depleting stocks.
The situation turned worse after India, which became a major source of wheat for Bangladesh’s private sector in 2020, restricted the export of grain to contain prices in its local market in May 2022.
Bangladesh’s wheat imports fell to their lowest in six years in fiscal year 2021-22.
Public and private imports fell 25pc year-on-year to 40 lakh tonnes in fiscal year 2021-22, according to food ministry data.
And until August 25 of fiscal year 2022-23, which began from the first day of July, the total wheat import stood at 1.62 lakh tonnes, down 35pc from 2.48 lakh tonnes in the same period in the previous year.
“There is a poor supply of wheat in the market. But when we get supply, prices are high,” said Deluar Hossain, general secretary of the Ata (flour) and Maida Mill Owners Association in Naranyanganj, a hub for wheat flour.
Abul Bashar Chowdhury, chairman of Chattogram-based commodity importer BSM Group, said the arrival of wheat from India stopped after May.
Besides, prices went up globally after the ban by the neighboring country. This took place after imports from Ukraine and Russia stopped for war, he said.
Bangladesh depends on the import of over three-fourths of its annual requirement of wheat because of scanty domestic production.
“Stock of wheat, especially in the private sector, is now at a historically low level in the country,” he said, adding that wheat imported from Ukraine and Russia would arrive in Bangladesh by October 15.
“This will raise availability,” he said, adding that six to seven ships with around 5 lakh tonnes of wheat are on the way from the region.
Taslim Shahriar, senior assistant general manager of the Meghna Group of Industries, another importer and processor, said India, Russia, and Ukraine were the main sources of wheat having low protein content and comparatively lower prices than maida or premium quality flour that were used to make paratha.
He said Soft Red Winter (SRW) wheat used to make flour for ruti, is still dearer in the international market. “We are also facing problems in opening letters of credit for import commodities,” he said.
Adviser to the Ministries of Finance and Commerce, Dr. Salehuddin Ahmed, emphasized today that the prices of commodities are closely linked to production and supply, and assured that the government is fully aware of the necessary steps to control these prices.
“We are very conscious of issues related to trade and commerce. My colleague, Dr. Wahiduddin Mahmud, who oversees the Ministry of Planning, is also focused on these matters. We are accustomed to handling such challenges,” Dr. Salehuddin remarked in response to reporters’ questions at the Ministry of Finance in Bangladesh Secretariat.
Earlier in the day, Dr. Salehuddin met with Edimon Ginting, the Country Director of the Asian Development Bank (ADB), at his office in the Economic Relations Division (ERD).
He noted that the government is also attentive to the impacts of imported inflation, stressing that only essential goods should be imported. “We must ensure that the additional burden on the general population is minimized and work to further reduce existing pressures,” he added.
Dr. Salehuddin also mentioned that the central bank governor is well-informed about the causes of rising inflation, which is why strict market monitoring is in place.
Addressing another question, he mentioned that the Bangladesh Bank Governor is actively managing the issue of increasing foreign currency reserves, and this topic will be raised in the upcoming annual meetings of the World Bank and the IMF.
When asked about the outcomes of his meeting with the ADB, Dr. Salehuddin expressed that development partners, particularly the World Bank and ADB, remain positive about continuing their operations in Bangladesh. He noted that the ADB and other partners have assured him of their ongoing cooperation in the development sector.
He further highlighted that the development partners are eager to advance pipeline projects in alignment with the government’s priorities.
Regarding the possibility of delaying Bangladesh’s graduation from Least Developed Country (LDC) status beyond 2026, Dr. Salehuddin acknowledged the complexity of the issue, noting that it involves various conditions and the involvement of multiple agencies, including the Ministry of Finance, Ministry of Commerce, and the National Board of Revenue (NBR). He assured that the government is closely monitoring the developments.
When asked about the demands from government employees for ration provisions, Dr. Salehuddin stated that both public and private sector employees are equally important, emphasizing the government’s priority to ensure that everyone can lead a decent life. “We are committed to ensuring that everyone benefits equally,” he said.
On his new responsibilities with the Ministry of Commerce, Dr. Salehuddin underscored the importance of local and international trade as key pillars of the economy. He assured that the government would strive to create a business-friendly and corruption-free environment in all business operations.
Recognizing the significant role of trade, commerce, and the supply chain in curbing inflation, Dr. Salehuddin promised prompt government action to address these issues.
He also mentioned plans to meet with the Ministry of Commerce and its subordinate bodies to tackle pressing matters. “You can be assured that I will do my utmost and take necessary steps swiftly,” he concluded.
The prices of daily essentials will come down gradually, Finance and Planning Adviser Dr Salehuddin Ahmed said today (14 August).
“Common people will get relief to some extent. But it can’t be said that the prices will decrease overnight,” he told reporters at the conference room of the Finance Ministry.
Responding to a question about syndicate in the market, he said, “There is nothing that has not come to our notice, I have some ideas, the governor also knows about it.
“The secretaries here are also very experienced and I told them that you will tell me everything without fear.”
Asked if any step will be taken regarding corruption, he said, “There was no discussion on the issue today.”
Responding to another question he said, “Action against corruption is an ongoing process, some processes need to be followed to punish someone. Some measures and action have already been taken.”
Responding to a question about the specific instructions given today, the finance adviser said the Industries and Agriculture ministries will do whatever needs to be done in the field of production, such as fertiliser supply and market management.
Cyclone Remal has inflicted severe damage on crops across 45,590 hectares of land in the Khulna agricultural zone, causing losses worth Tk 180.24 crore, as reported by the Directorate of Agricultural Extension (DAE) in Khulna.
According to Mohon Kumar Ghosh, Additional Director of the DAE Khulna Zone, 44,148.95 hectares of farmland suffered partial damage, while 1,450.90 hectares were completely destroyed in the four affected districts: Khulna, Bagerhat, Satkhira, and Narail.
In Khulna district, Cyclone Remal affected 3,565.65 hectares of cropland belonging to 13,796 farmers, resulting in losses estimated at Tk 42.98 crore. Bagerhat district witnessed damage to 12,611.50 hectares of cropland from 39,465 farmers, with losses amounting to Tk 97.36 crore. In Satkhira, 659.7 hectares of cropland owned by 12,156 farmers were affected, incurring losses of Tk 24.42 crore. Narail saw damage to 28,763 hectares of cropland from 8,620 farmers, with estimated losses of Tk 15.47 crore.
Speaking to BSS, Mohon Kumar Ghosh highlighted the extensive damage caused by Cyclone Remal to the southern coastal areas, particularly croplands. The affected crops include jute, Aush seedbed, aush cultivated land, groundnut, chili, bona Aman, ginger, turmeric, summer melon, litchi, mango, papaya, betel nut, sugarcane, banana, winter maize, sesame, and various Kharif season vegetables such as tomato, mung bean, and banana.
Following directives from Prime Minister Sheikh Hasina, efforts are being made to support the affected farmers. “We are working tirelessly to help the helpless farmers recover their losses,” Ghosh said, adding that the government is providing incentives and regular counseling and supervision at the field level to aid recovery.
In the coming months, the affected farmers will continue to receive various forms of government support to mitigate the impact of Cyclone Remal.
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