Russia is proposing to sell food products to Bangladesh for the fourth time this year, according to commerce ministry sources, in an effort to diversify its export market amid sanctions imposed by the West over its invasion of Ukraine.
In a letter sent to the commerce ministry on 19 October, the Russian Embassy to Bangladesh said that the Russian state-run company Prodintorg is interested in expanding its cooperation with Bangladesh by supplying red lentils, green lentils, sunflower oil, yellow peas and chickpeas on a government-to-government (G2G) basis.
The letter said that Prodintorg would like to supply these food commodities at "the best competitive and comprehensive prices".
The proposal comes at a time when Bangladesh is facing rising food prices due to the war in Ukraine and a scant dollar stock for food import. The country is a major importer of wheat and edible oil -- both of which have seen their prices soar since the beginning of the Russia-Ukraine war in February 2022.
A senior commerce ministry official told The Financial Express that they had received the proposal from the Russian state entity and were considering it after discussing it with other ministries and agencies.
However, the commerce ministry said it would need to take into account the sanctions imposed on Russia before making any decision.
Prodintorg has been supplying fertilisers and grains on a government-to-government (G2G) basis since 2013. It is the only Russian state-run company to supply agricultural products and fertilisers to Bangladesh on a G2G basis, according to the letter.
"Since the beginning of cooperation, the state agency has already supplied to Bangladesh more than 1.3 million tonnes of potash fertilisers and more than 1.5 million tonnes of milling wheat," the letter mentioned.
The commerce ministry official said they are trying to increase the supply of essential items in the local market as the commodity market is already overheated.
Edible oil, sugar, lentils, etc are already pricier in the kitchen markets, hitting consumers hard. The state-run Trading Corporation of Bangladesh currently procures different essential items from local and foreign sources for selling to 10 million low-income people.
"The commerce ministry is examining the matter and is considering discussing with stakeholders, including other concerned ministries, Bangladesh Bank and relevant state agencies, to review the proposal," the official said.
Apart from the sanctions, the absence of direct banking transactions between Dhaka and Moscow could also pose a challenge to any trade deal between the two countries, the official added.
The Russian-Ukrainian war has dealt a severe blow to global food security through its impacts on wheat, oil and fertiliser exports, thus contributing to the skyrocketing inflation of all essential items.
The United States and the European Union imposed multiple sanctions, including a SWIFT ban, against Russia following its invasion of Ukraine, almost cutting Russia off from the rest of the world.
Dhaka has already proposed to the Eurasian Economic Commission (EEC) to conduct a joint feasibility study on a free trade agreement (FTA) between Bangladesh and the EAEU, but there has been no response yet from the commission.
The EAEU bloc comprises five member countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. The EEC is the executive body of the EAEU.
In June, the government signed a procurement contract with a Russian state-owned corporation to import 180,000 tonnes of fertilisers despite sanctions against Russia.
Currently, Bangladesh is trying to get its annual food quota imported from neighbouring India to keep its market stable.
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