News Desk: Bangladesh is trying to secure wheat supplies from Russia in a government-to-government deal after its biggest supplier India restricted exports of the grain last month to contain local prices, government and trade officials told Reuters on Wednesday.
The supply deal with Russia, the world's biggest wheat exporter, could help Dhaka in meeting its needs below the elevated global prices, industry officials said.
Bangladesh is holding a virtual meeting with Russia on Thursday to finalise the deal, said a senior official with Bangladesh's food ministry.
"We'll initially seek at least 200,000 tonnes of wheat from Russia," said the official, who declined to be named.
The Ministry of Food did not immediately respond to a request for comment.
Bangladesh imports around 7 million tonnes of wheat and last year more than-two thirds of that came from India.
After India's export ban, Bangladesh tried to secure supplies via international tenders but cancelled them because of high prices.
Bangladesh was paying less than $400 per tonne on the cost and freight basis for Indian wheat, but after the ban other suppliers started quoting above $460, which raised local prices in Bangladesh, said a Mumbai-based dealer with a global trading firm.
The Bangladesh government is struggling to contain soaring commodity prices, with inflation at an eight-year high in May, while the country's wheat stocks hit their lowest in three years at 166,000 tonnes.
"There are many countries who can supply wheat to Bangladesh, but the key issue is price. Russia can offer discounts over global prices," said a New Delhi-based dealer with a global trading firm.
But paying for Russian wheat would be a challenge for Dhaka given Western sanctions on Moscow.
"All the issues, including payment, will be discussed in the meeting. Let's see," the government official said.
Bangladesh would initially buy a small amount of Russian wheat and will increase buying if "all goes well on arranging shipments and payment's front," said the New-Delhi based dealer.