Food grain import declines drastically in July March period

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Jasim Uddin Haroon
The country's food grain import during July-March period of the current fiscal has declined significantly, more than 48 per cent, according to the latest Bangladesh Bank statistics.
Traders and analysts said such big fall in import of rice and wheat was mainly because of good harvest of rice and wheat in the country.
But, they cautioned that the domestic food market might get destabilized unless the import is made in the next three months when availability of local food grains will start drying up.
According to official statement, importers settled letters of credit (L/Cs) worth US$ 713.08 million for overseas purchase of wheat and rice against the L/Cs opened worth US$ 1383.45 million during the July-March period.
Mr Bashar, chairman of BSM Group said the supply shortage will not affect the market for the time being. "It (low import) will however destabilize or create supply problem in the food grain market if the situation prevails for three more months."
Mr Bashar alleged that many importers are now procuring wheat from India through land port. But the quality of Indian wheat is of inferior quality.
This year Bangladesh's production of main cereal crops -- aus, aman and boro -- were better than that of the last year.
According to BBS (Bangladesh Bureau of Statistics), aus production this year was 2.3 million tonnnes, aman 12.79 milion tonnes and boro 18.67 million tonnes.
Wheat production also increased to 9.95 million tonnes this year against 9.72 million tonnes last year.
Abul Bashar Chowdhury, a leading food grain importer told the FE, "Wheat import plunged as the low-income group of people consume rice as price of the same is now cheaper than Atta."
Md Ali, chairman of leading food grain importing company Imam Group said that many traders incurred financial losses in 2009, 2010 and 2011 due to fluctuations in wheat prices in the international market.
"I think many remained reluctant to import of grains following huge financial losses suffered earlier. And this is one of the reasons behind the fall in import of grains," Md Ali added.
Tipu Sultan, director of leading wheat importing company Nurjahan told the FE, "It faced a trouble over import of 55,000 tonnes wheat from Canada."
Chairman and Managing Director of S Alam Group Md Saiful Alam said banks, especially the state-owned ones, are responsible for the situation as they refused to open L/Cs for food import.
"The banks were refusing to open LCs, showing the reason of scarcity of the US dollar in their stock. Some banks are suggesting that the importers should open LCs for comparatively smaller quantity to avert pressure on the greenback," Mr Alam alleged.
However, the Ministry of Food and Disaster Management in its recent letter sought the central bank's intervention to ease opening of L/Cs in banks for wheat import.
The request came following a drastic fall in wheat import in the country. Wheat import was only 0.786 million tonnes during July-February period of the current fiscal year (FY 2011-12) against the annual demand of 4 -5 million tones.