Bangladesh to Buy Ukrainian Wheat If Russian Grain Unavailable

Bangladesh will accelerate its imports of wheat from Ukraine if Russian grain is unavailable because of Moscow's approval of new export curbs, Bangladesh's agriculture minister Abdur Razzak said on Thursday.

Russia, the world's largest wheat exporter, said on Tuesday it wanted to set a non-tariff limit of 20 million tons for grain exports in the first half of 2020. The plan from the Ministry of Agriculture has yet to be approved by the Government.

“This kind of restriction is unfortunate,” Razzak told Reuters.

Bangladesh is the third-largest buyer of Russian wheat after Turkey and Egypt and it imported 1.2 million tonnes in July-November 2019.

Russia, which competes with Ukraine to supply wheat to Africa, the Middle East, and Asia, is a member of the World Trade Organization (WTO).

According to WTO rules, countries should not impose export restrictions except for a short period of time to avert a vital shortage of food or other goods or to aid in the international marketing of a commodity, such as extending exports over time.

“We are not going to lodge an official complaint, rather we’ll shift to Ukraine to meet our demand,” Razzak said.

Russia’s agriculture ministry has said it does not want potentially favorable conditions for Russian grain exporters at the moment to lead to a shortage of grain in the domestic market in the first half of the year.

The ministry did not respond to a request for comment about how export restrictions would correlate with WTO rules.

The WTO declined to comment.

Export prices for Russian wheat are currently at their highest for the season and trade margins are thin.

One trader focused on Russian wheat said it would be better to have a formal quota mechanism than be subject to the kind of informal limits Russia imposed in 2015, as those curbs made it difficult for traders to meet their forward contracts.

“At least it is going to be official. And the game rules are going to be set,” the trader said.

Before the Russian Government resigned this week, the quota proposal was revealed. Where the new government is to be fully formed and how it will react to the planned export restrictions remains unclear.

Source: Reuters