Home procurement of wheat fails

Public wheat procurement has mostly failed the target this year amid higher market prices, thereby putting the government in a tight spot to source the staple from a war-hit global market.

Import also dropped to a decade low of 4.0-million tonnes in the last fiscal year (FY22), causing a big hike in the prices of local wheat flour.

Every year, the government buys at least 0.1-million tonnes of wheat grain from the domestic source which is above 10-12 per cent of local harvest.

This time, only 20-tonne wheat could be bought when public warehouses have only 0.16-million tonnes of stocks, reports the Directorate General of Food (DGoF).

In the last three years, a DGoF official says, only 0.1 million to 0.103 million tonnes of wheat could be procured annually which were above the targets.

"Last year also, above 0.1-million tonnes were purchased at Tk 28 a kg," he adds.

Sourcing became tough at the same price this year amid high market prices as the Russia-Ukraine war began in February which almost stopped exports from the two key wheat-growing countries.

"We need 0.6-0.8 million tonnes of wheat for government distribution. Of them, nearly 90 per cent are being imported," DGoF director (procurement) Md Raihanul Kabir tells the FE.

"This year, we have also set a target to purchase 0.6-0.7 million tonnes from the international market."

Mr Kabir speaks of opening a tender on Thursday for buying 50,000 tonnes of wheat globally.

The directorate usually buys an amount of wheat from the local market to help farmers get a good price in order to encourage them in wheat cultivation.

Mr Kabir further says that falling global prices can help source the item in large volumes this FY.

Rafiqul Islam, a wheat farmer-cum-trader at Ranisankail in Thakurgaon, says when the government set the price at Tk 28 a kg, wheat was already at Tk 29-30 locally.

"Last year, I could supply 50 tonnes to public warehouses as it was a 20-per cent profit-making venture for me," he adds.

But, according to Mr Islam, it has not been possible to supply the item at such a poor rate this year.

Primary estimates of the Bangladesh Bureau of Statistics show wheat production was 1.1-million tonnes this year, a slight rise in output than last year's.

But import declined to only 4.0-million tonnes in the just ended FY22 amid persisting high global prices, according to food ministry data.

Wheat import was more than 5.4-million tonnes in FY21.

Wheat flour prices hit an all-time high during the May-June period this year in Bangladesh as maida (finer flour) hit Tk 72 and atta (coarse flour) Tk 56 a kg.

The current prices are 45-55 per cent higher than that of last year, according to the Trading Corporation of Bangladesh (TCB) and city groceries.

Global wheat prices hit a decade high of $448 (European) and $500 (North-American) a tonne on May 16, forcing private traders to squeeze imports, says value-chain expert Prof Golam Hafeez Kennedy.

Prices of the grain started to increase from the beginning of 2022 which was further fuelled up by the ongoing war, he adds.

Prof Kennedy further says that prices of all kinds of food items, made of flour, rose by Tk 30-55 per cent, battering the people on low incomes amid sky-rocketing prices of other essentials like rice, oil, pulses, sugar and fuel.

The government's Boro rice-paddy procurement also performs poorly this year as below 40 per cent of 1.9-million tonnes of target has been achieved so far, he cites.

"Asking rates of both rice and wheat should be reviewed… to fulfil the procurement target which is now mandatory to tackle any food crisis during this war-torn global commodity market," concludes Prof Kennedy.

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