Govt looks to sign deals with India, ROK for wheat purchase .

The government will sign a contract with an Indian company to import 50,000 tonnes of wheat this week, a food official said.

"We expect the contract to be signed this week with LMJ India," Director (Procurement) of the food department Badrul Hasan told the FE Sunday.

The government move to import wheat is the ongoing effort to deescalate prices of atta and flour at the retail level.

The prices of atta and flour have sharply risen at the local market following production fall in some major wheat producing countries like the United States of America (USA), Russia and Australia due mainly to recent drought and inclement weather.

Bangladesh is heavily dependent on import of wheat to fulfill its demand.

Per kg of loose atta was sold at Tk 32- 33 Sunday at the retail level in the city which was Tk 30-31 during Ramadan.

Packet atta containing two-kg of different brands such as ACI, Fresh, Pusti and Teer were sold between Tk 75- 76 on the day which were sold at Tk 68-70 during the month of fasting.

On the other hand two-kg packet flour was sold at Tk 95-96 Sunday which was between Tk 85- Tk 86 during Ramadan.

And to meet the increasing local demand, the government has given approval last week to import 50,000 tonnes of wheat. Each tonne of wheat is fixed at US $ 344.

The official said at present the country has 0.3 million tonnes of wheat at the public warehouses. And more 1,50,000 tonnes will arrive at the country's ports shortly.

He said that it would take two and half months to complete the delivery of 50,000 tonnes of wheat.

To meet the growing demand, the government has taken the decision of procuring some 0.8 million tonnes of wheat from abroad during the current 2012- 13 fiscal, a high official of food department said.

South Korea's Daewoo International has offered to sell 50,000 tonnes of wheat to Bangladesh at the rate of $352.95 a tonne, including freight charges, insurance and other expenses, as the company has emerged the lowest bidder in a tender invited in this connection, official sources have said.

"The ministry of food has taken the initiative to buy a substantial amount of wheat from international markets to enhance the food stock in the country," Abul Hasnat Chowdhury, senior official (import) of the Trading Corporation of Bangladesh (TCB), told the FE Sunday.

It is the second tender invited by the government in the current fiscal year, as it tries to secure the supplies of wheat amid rising concerns about crop losses s in key exporting nations, such as the United States, Australia and Russia, because of adverse weather conditions.

At least four bidders took part in the tender that was opened on Thursday last. The wheat would be shipped within 40 days of signing a deal to this effect, sources said.

The Daewoo offer will now be submitted to the cabinet purchase committee for its final approval.

According to the sources, the offer is higher by $8.95 a tonne than the lowest offer made in the previous tender for buying food. It was won by India's LMJ International.

The government has planned to import 0.8 million tonnes of wheat in the financial year to June 2013, while traders in the private sector import 2.5 million to 3 million tonnes.

The domestic production of wheat has stagnated at nearly 1.0 million tonnes this year.

In late 2010, Bangladesh had to suffer badly when a number of deals were scrapped by suppliers after a spike in global wheat prices following a Russian ban on exports.

Rice is the main staple for Bangladesh, home to 160 million people, but wheat consumption is also rising due to steady economic growth and the changing lifestyle.

Though the country's overall food supply is in a better position now for plentiful rice stocks the government has extended a ban on the export of most varieties of rice until June next.

Bangladesh, the world's fourth-biggest rice producer, banned overseas shipment of some common varieties in May 2008 following a spike in prices. It also banned all exports a year later. Later in April last, Bangladesh lifted the ban on aromatic rice export.

This year the country is heading for record rice production, more than 34 million tones, after two successive years of record output, according to sources.

In 2011 Bangladesh was the fourth-largest importer of rice in the world with the import volumes hitting 1.48 million tonnes, according to the U.S. Department of Agriculture, as dwindling stocks and rising prices led the government to import. But this year it is not expected to import rice, according to government officials.

The government has also taken steps to enhance its storage capacity for increasing the food stock and supply in the country. The storage capacity is likely to be raised from the existing 1.4 million tonnes to 3.0 million tonnes by 2021.

Source : thefinancialexpress-bd.com