Bangladesh News Desk: After oil and gas, wheat prices have been skyrocketing in the global markets as Russia’s assault on Ukraine has disrupted the supply of the grain through the key Black Sea region.
Wheat price increased for the fourth day in a row in the Chicago commodity market on Thursday, taking it to 14-year high, a development that will make Bangladesh concerned as it depends heavily on imports to meet up the growing demand of the grain.
The price rose 5.1 percent, at $11.13 a bushel, highest since March 2008 when it had hit $11.34 a bushel. Indeed, the wheat market has increased around 30 percent since Russia began invading Ukraine a week ago.
Why are prices hitting the roof?
Ukraine and Russia are major players in the global wheat supply as these two countries together account for more than 25 percent of the global trade in wheat. These two countries also supply around 20 percent of the global corn sales.
Prices of those staple crops are increasing on concerns of supply disruptions at a time when food prices in the international markets have already reached record highs.
Since Russia began invading Ukraine eight days ago, the latter’s ports and other export infrastructure got damaged a lot, while massive sanctions by US, UK and Europe have hit Russian supplies.
Even before Russia’s invasion of Ukraine, food inflation was already high, pinching global consumers, especially poorer nations. Erratic weather has made it difficult to grow crops, while a shortage of workers and skyrocketing shipping freight has scrambled supply chains.
Also, the global grain inventories are very tight and any lengthy disruptions to supplies from Ukraine and Russia has the potential to dismantle markets further.
Wheat consumption in Bangladesh:
Consistent economic growth and rising purchasing power have made Bangladeshi consumers more health conscious than before. Growing prevalence of diabetics and obesity are also forcing people to change their food habits in recent years.
As a result, Bangladesh’s wheat consumption doubled in six years. But local production did not increase, so import was the only solution to meet the rising demand for this staple grain.
According to the agriculture ministry, Bangladesh’s wheat consumption more than doubled to over 75 lakh tonnes between fiscal 2014-15 and 2019-20. Of the quantity, only 10-12 lakh tonnes are locally produced and remaining around 85 percent are imported.
Bangladesh imports wheat from countries, such as Russia, Ukraine, Canada, India, the US, Cyprus, Italy, Australia, Argentina, Estonia and Belgium. As the war between Russia and Ukraine is getting intensified, these countries have also become extra cautious about exporting the grain.
“There will be severe impacts on the Bangladesh market if the war is prolonged,” said Mostafa Kamal, chairman of Meghna Group of Industries, one of the largest players in the country’s flour market.
