Food inflation to increase as Russia withdraws from Black Sea Grain Deal
After Russia’s unilateral withdrawal from the Black Sea Grain Deal, the wheat market is going to be volatile again as signs of it have already become apparent. Internationally, the commodity has already seen a three per cent hike. According to reports, in Bangladesh also wheat price has seen a rise and this development is going to affect wheat flour at the retail market also.
One thing about wheat prices in Bangladesh must not be missed. Though internationally the wheat price at the pre-Ukraine-Russia war level or even at the pre-pandemic, in Bangladesh, not only the price of wheat remained the same, at Tk 58-60 per kg of loose flour for a long time, consumers saw an unprecedented rise in the price of most commodities. Only recently, the price of wheat flour came down by Tk 4-5 per kg as supply issues eased after India resumed exports through Hili land port in Dinajpur. Indian wheat is of low quality and Bangladesh traders are now able to buy this wheat at Tk 36-37 per kg. It was Tk 40-41 per kg last week. At the retail market loose wheat flour was selling at Tk 50-53 per kg.
At other times, this small reduction in price would have been a relief for the consumers, but since people now have little money this reduction means nothing to them. Still, prices of other commodities have risen greatly. There are at present no consumable items in the market whose prices have not risen, compared to their price in the international market.
Since the dollar crisis is persisting, it will have a significant impact on wheat price and very likely, the price of loose wheat flour may touch again Tk 60 per kg. India supplies the most wheat to Bangladesh. Until January of fiscal year 2021-22, India supplied 66 per cent of the wheat Bangladesh imported. Of the rest, 15 per cent were from Ukraine, 7 per cent from Russia, 6 per cent from Canada, and 5 per cent from Australia. Since there was an Indian embargo on wheat export, India did it to maintain supply of the food grains in its domestic market, and wheat prices remained high in Bangladesh.
Following the withdrawal of Russia from the Black Sea Grain Deal, if India slaps a ban on wheat export for its own food ‘security’, the wheat market in Bangladesh will surely go jittery. Bangladesh authorities must be prepared for the worst scenario to come in such a case and plan beforehand on how to tackle a crisis.
