High flour price weighs on Bangladeshi economy

Published 2023년 2월 16일

Tridge summary

Bangladesh is grappling with food inflation and insecurity due to higher global food prices, particularly wheat, leading to a decrease in imports by half in the first half of the 2022-23 marketing year. This is attributed to delays in opening letters of credit due to a lack of foreign currency reserves, as well as supply-chain disruptions and increased prices following the Russian invasion of Ukraine and India's wheat export ban. The government has revised its wheat import expectations from India, and there is hope for relaxation of the ban for Asian customers like Bangladesh. Domestic demand for wheat flour has significantly dropped, driving farmers to increase wheat planting for the first time in three years, with a forecasted production of 1.2Mt in April. However, wheat imports for Bangladesh have been reduced by 700,000t to 5.3Mt, and domestic consumption is projected to fall by over 1.5Mt.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Like many developing countries worldwide that rely on imports to meet domestic food requirements, Bangladesh is struggling in the higher global food price environment. It has led to rising domestic food inflation, increased food insecurity, raised social tensions and strained the government’s budget. Local merchants have dramatically slowed the pace of international purchases, with government data showing imports in the first six months of the 2022-23 marketing year stood at around 2.2 million tonnes (Mt), 50pc lower than the same period last year. While demand is indeed lower, the primary issue appears to be delays in the opening letters of credit arising from a lack of USdollar-denominated foreign currency reserves in Bangladesh. On August 31 last year, the Bangladeshi Government’s cabinet committee approved the importation of 500,000t of Russian wheat under a government-to-government agreement, with a five-month delivery window. By the end of December, around 400,000t, or 80pc ...

Source: UkrAgroConsult