Bangladesh turns to Russia to secure wheat after India bans export

After India banned wheat export to contain local prices, Bangladesh has been forced to turn to Russia to secure wheat supplies. The South Asian country is looking for a government-to-government.

India was Dhaka's biggest wheat supplier but the early onset of summer hurt the productivity of Indian farms. The government resorted to banning exports to avoid a price hike within the country. Dhaka imports around 7 million tonnes of wheat every year. In 2021, around two-thirds of the wheat supply came from India.

Bangladesh is to hold a virtual meeting with Russia on Thursday to finalise the deal. A supply contract with the biggest wheat exporter will help the south Asian nation to meet its needs below the elevated global prices, reported Reuters.

An official from Bangladesh said the country is seeking at least 200,000 tonnes of wheat from Russia. Dhaka had tried to secure wheat via international tenders but high prices proved to be an obstacle.

India was charging Bangladesh less than $400 per tonne of wheat. The wheat ban prompted other suppliers to quote more than $460. This caused local wheat prices in Bangladesh to rise. Inflation in the country was at an eight-year high in May and wheat stocks hit their lowest in three years at 166,000 tonnes, reported Reuters.

While Russia can supply wheat at a discounted rate, Western sanctions on Moscow will prove to be a problem for Dhaka. Issues related to payment will be discussed in the meeting. Dhaka is planning to buy a small amount of Russian wheat first and later increase the quantity if everything goes well.