New Delhi: Bangladesh does not need Indian wheat as its granaries are full, its food minister Muhammad Abdur Razzaque said. This could disappoint India as it considers allowing exports after a bumper harvest and faces criticism for poor foodgrain management.
“At the moment, we have adequate stocks and we don’t have space,” Razzaque said from Dhaka over the telephone. “Immediately, we don’t want wheat.”
Bangladesh, South Asia’s biggest rice buyer, needs about 3 million tonnes (mt) of wheat every year to top a domestic production of 1 mt. An adequate buffer stock is crucial this year for Bangladesh’s food security due to high global prices and some scarcity.
India has restricted wheat exports since 2007, but it allowed some exports to Bangladesh through a diplomatic deal last year. With grain stocks much higher than buffer requirements and a wheat harvest estimated at a record 84.27 mt this year, India needs to export some grains urgently to make space for new stocks, as also to quell criticism as some of the old stocks rot.
Analysts say Bangladesh and Pakistan are important clients for India because India’s grade of wheat does not find many takers elsewhere.
On Monday, a meeting of a ministerial group is expected to decide on opening wheat exports, after several indications from agriculture minister Sharad Pawar since last month.
The meeting is likely to be inconclusive because India may want to wait till the end of May, when it finishes procuring wheat from farmers and also gets a clearer picture on rainfall, said Veeresh Hiremath, chief analyst with Karvy Comtrade Ltd, a commodities brokerage.
Razzaque said this season Bangladesh has already purchased wheat from Russia and Ukraine, and currently has a buffer stock of 600,000 tonnes. It is also looking to sign an agreement with Ukraine for a long-term purchase contract.
Razzaque said doing business with India was not easy.
“It is a very cumbersome process,” he said. “Last year India put a lot of conditions, and we accepted them all. It took a long time to negotiate the price.” Some of the shipments ended in litigation last year, Razzaque said, without elaborating.
That said, if India offers a suitable price for its wheat, Bangladesh may consider buying it, he added. “If they open it, and if they give us a competitive price, we could think about it,” he said without specifying his price expectation. Razzaque said Bangladesh would assess the size of its rice crop and also monitor the wheat harvest in Russia and then decide if it wants Indian wheat.
Wheat is being bought by the Indian government at the minimum support price of Rs 1,170 a quintal, and some traders say the flood of wheat after the March-April harvest could help push prices down prices in the open market after the government stops buying wheat this month.
Bangladesh may eventually buy some Indian wheat, but India may not be able to sell it below the minimum support price as it may face a lot of political opposition, said Hiremath.