Bangladesh to buy wheat from Ukraine

Bangladesh will import 100,000 tonnes of wheat from Ukraine at $320 a tonne, including CIF, in its first government-to-government wheat deal with Kiev, a top procurement official said on Thursday. "We have already signed the deal and shipment will start soon," Ahmed Hossain Khan, director general of the state grain buyer, told Reuters.
"Though the initial offer was $365 a tonne, in the final deal Ukraine agreed to give us at $320 a tonne," Khan said. The government paid $329.11 and $309.11 a tonne to buy a total 100,000 tonnes of wheat in two recent tenders. Ukraine's Farm Minister Mykola Prysyazhnyuk told reporters on Thursday the ex-Soviet republic would supply a total of 1.0 million tonnes of wheat to Bangladesh this season. "We have signed a deal on supplying 1.0 million tonnes of wheat to Bangladesh on CIF base" Prysyazhnyuk said.
Ukraine is a traditional supplier of wheat to Bangladesh and exported 287,023 tonnes of the commodity to this country in the 2010/11 season and 1.4 million in 2009/10. Ukraine has completed the 2011 wheat harvest threshing about 22.2 million tonnes of wheat in clean weight. The Farm Ministry has said milling wheat dominates the volume. Bangladesh needs to import 3.0 million-3.5 million tonnes of wheat a year to meet demand while domestic production has stagnated at nearly 1 million tonnes. Bangladeshi officials said it aimed to buy at least half its annual imports from neighbouring India, thanks to its competitive prices.
India this month freed up wheat exports for the first time since 2007, as unmanageable stock levels forced authorities to allow the exports of two million tonnes each of wheat and rice, although high domestic prices should cap exports. Last week traders in Bangladesh said they expected the bulk of India's planned wheat exports to end up in Bangladesh as the country shifts away from Black Sea supplies. The Indian move came against a backdrop of growing global supplies that are expected to squeeze prices. On Thursday, wheat futures fell 1 percent to $6.60 a bushel, the lowest since August 9, weighed down by a warning from the US Federal Reserve of significant risks to the economy.