DHAKA: Bangladesh will import 100,000 tonnes of wheat from Russia in a government-to-government deal, officials at the state grains agency said on Thursday, as South Asia's top wheat buyer looks to boost its reserves.
Bangladesh will pay $267.30 a tonne, which includes cost, insurance and freight, and other port-related expenses, two officials with direct knowledge of the matter told Reuters.
The price for Russian wheat in the Black Sea region, from where Bangladesh imports wheat as supply from India dwindled, was $195 per tonne for the 12.5% protein variety for February supply, on a free-on-board (FOB) basis at the end of last week, according to agricultural consultancy IKAR.
The import price is slightly lower than the lowest offer of $267.98 a tonne that the state grains buyer received in its last tender to buy 50,000 tonnes of wheat.
Bangladesh has been among the largest buyers of Russian wheat in recent years. It purchased 1.9 million tonnes of Russian wheat over the July 2018-May 2019 period.
The first batch of wheat arrives in the first week of July, one of the officials of the state grains buyer said.
Bangladesh last imported 200,000 tonnes of wheat from Russia in an inter-state deal in 2017 after Dhaka rejected three cargoes of Russian wheat totalling 150,000 tonnes over quality concerns.
Apart from government purchases, private traders import about 5.5 million tonnes of wheat annually to meet growing demand, while the country's output has stagnated at about 1 million tonnes.
"The presence of the state in this latest deal indicates to me that Russia wants to keep a firm hold on the important Bangladeshi market," one European trader said.
The strong demand for wheat in Bangladesh reflects a shift in consumer preferences towards bread as well as increasing use of wheat as a substitute for more expensive rice by Bangladesh's growing population of 160 million, the United Nation's Food and Agriculture Organization (FAO) said.