Russia cancels grain deal
Special Correspondent: Russia has withdrawn from the Black Sea grain export agreement. On Monday, Russia told the United Nations that it would not renew the agreement with Ukraine. Bangladesh’s food and fertilizer supply may be in great danger. Since the beginning of the Russia-Ukraine war, until the Black Sea Grain Agreement, the transit of goods through the Black Sea was halted. This creates a crisis in the import of food and fertilizer in Bangladesh. If the contract is not renewed, the importers fear that the same type of instability may occur again.
Importers say that due to non-renewal of this agreement, import of wheat, corn, soybean, barley, sunflower oil and fertilizers will be disrupted. The biggest problem will be wheat and fertilizer import. About 40 percent of the country’s wheat demand comes from Russia and Ukraine. A large part of the import of fertilizers depends on Russia, Ukraine and Belarus.
Immediately after the suspension of the contract on Monday (July 17), the price of wheat in the international market is said to have increased by $10 to $15 per ton. The price of wheat rose from $250 to $260-265 per ton within a day.
The Black Sea Grain Agreement was signed in July last year. So that Russia allows Ukraine to export food grains. The contract was to be renewed every two months. Its term expired last Monday, which has not been renewed. Russia claims that the conditions for extending the contract have not been met.
Abul Bashar Chowdhury, Chairman of BSM Group, one of the food grain importers of the country, told Daily Industry that this is undoubtedly bad news for us. Earlier due to the war wheat prices in the world market were $390 to $420, which after the agreement fell steadily and are now somewhat stable. At such time, the contract is canceled.
He said that the amount of wheat stocked by the traders of the country will last for two to three months. But if prices continue to rise in the global market, the global market situation may worsen in the coming days. Which will affect the country’s market.
Akiz Insaf Group Executive Director Anup Kumar Saha told Daily Industry that most of our wheat imports are from Black Sea countries. After that deal we got benefit. That didn’t last long.
In this regard, the product supply expert of the department of agricultural business and marketing of Sher-e-Bangla Agricultural University Rashidul Hasan told Daily Industry that the production of wheat, corn, barley, soybeans and sunflowers is not much in the country, so they are dependent on imports. That too from the Black Sea countries. As a result of cancellation of this agreement, the price of products will increase in the world market. Which will affect the country’s consumers.
He said the deal helped to bring down prices in the local market to some extent. But before this agreement, we have seen wheat and fertilizer prices becoming unstable. Even the price of bakery products increased due to wheat.
Meanwhile, in the financial year 2022-23, the import of wheat in the country has decreased for the third time in a row. This is due to the drop in buyers due to high prices as well as the dollar crisis and problems in opening and settling LCs. According to the data of the Ministry of Food, the import of wheat decreased by 3.4 percent to 38 lakh 75 thousand tons in the financial year 2022-23. Last year it was 40 lakh 12 thousand tons.
Officials of the Ministry of Agriculture said that the demand of MOP fertilizer in Bangladesh is about eight lakh tons every year. About 60 percent of which was imported from Russia, Ukraine and Belarus. After the United States and EU imposed sanctions on these two countries due to the war in Ukraine, Bangladesh started importing essential fertilizers from other countries including Canada. However, due to the import crisis, the government adjusted the price by increasing the price.
After this agreement, the import of fertilizers from Russia-Ukraine started again. However, there will be no problem in canceling this agreement, Deputy Head of Fertilizer Management and Monitoring (Agricultural Economist) of the Ministry of Agriculture Sheikh Badiul Alam said, there is no agreement to take MOP from Ukraine. An agreement has been made to buy 800,000 tons of fertilizer from Canada. As a result, there will be no shortage of this fertilizer in the current season.
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