Photo: Collected-
Md Mizanur Rahman Himadri-
Though prices of most commodities continue going down in the international market in the last month, consumers are not getting the benefit of this downward trends.
Prices of rice, wheat, soybean and palm oils, crude and refined sugar, wheat, chhola dropped on March 1, 2023 compared to prices of commodities one month back, according to Reuters.
Price of boiled rice stood at 478.00 US dollars per tonne on March 1, 2023 as against 514.00 US dollars showing 7.00 per cent drop. Price of wheat was trading at 341.72 US dollar per tonne on March 1, 2023 as against 368.17 US dollars one month back showing 7.19 per cent drop in the price.
The price of refined sugar was trading at 556.2 US dollars per tonne on March 1, 2023 as against 576.90 US dollar per tonne showing 3.59 per cent drop …. However, the per tonne sugar was 500.75 US dollars per tonne in the international market one year back…….
The price of crude soybean oil was 1136.27 US dollars per tonne on March 1, 2023 as against 1180.00 US dollars one month and 1427.00 US dollars one year back showing 3.71 per cent and 20.37 per cent drop respectively.
The price of crude palm oil was 985 US dollars per tonne on March 1, 2023 as against 990.00 US dollars per tonne one month back and 1462.00 US dollars 0.51 per cent drop one month and 32.63 per cent drop one year back in the international market
Though prices of some consumer goods dropped in the international markets year-on-year, poor monitoring by the stakeholders’ concerned, sharp downward adjustment of taka against the US dollars and non-availability of dollar in opening letter of credit stand in the way of giving benefit to Bangladeshi consumers, said economists, business leaders and policy-makers.
Though the prices of soybean and palm oils have dropped in recent times in the global market, consumers in Bangladesh are hardly getting the benefit of this downward trend prices as local currency taka lost substantially against US dollars in the last 4/5 months, according to economists, policy-makers and business leaders.
Besides , non-availability of US dollars in opening letter of credit (LC) also keep prices of commodities high in the local market, said a top leading importer while talking to this correspondent. Argentina has been the major supplier of soybean to Bangladesh.
Syed Mahbubur Rahman, Managing Director of Mutual Trust Bank, said commercial banks are experiencing shortage of US dollars in opening letter of credit…..
The per tone palm oil also was hovering at 960 US dollars as against 1462 US dollars one year back, showing 34.34 per cent price drop. Indonesia has been the major supplier of Palm oil to Bangladesh.
Meanwhile, Argentina will see cuts to its soybean production as drought concerns loom this season. The USDA in its latest forecast set soybean production at 36mt for 2022/23, 9.5mt below previous projections.
However, the USDA noted that there as still time for the second crop this year to do well. Some rain could help compensate for the losses in the first crop, says the USDA.
The Argentinian government in the meantime is pushing for more exports of meal and is expected to import 6mt extra soybeans from neighboring countries to make up for the domestic shortfall. They have also adjusted the export tax regime in favour of sbm over seed. The 2022/23 crush is projected at 36.5mt, 2.5mt lower than previous estimates. This would be the lowest crush since the drought in 2017/18.
In January 2023, S&P Global reported Argentinian sbm cash basis levels rising to record highs over weather related uncertainties. Analysts noted that record premiums for Argentina’s sbm was unusual as Brazil is used to trading higher.
Argentina is the number one exporter of sbm in the world. In 2019, it received a boost with China opening up imports from the country. Other major Asian buyers depending on Argentina are Vietnam, Indonesia and Malaysia.
Reuters adds: India is expected to harvest a bumper wheat crop in 2023 as high domestic prices and replenished soil moisture help farmers surpass last year’s planting, while an intense heat-wave cut output this year.
Higher wheat output could encourage India, the world’s second biggest producer of the grain, to consider lifting a May ban on exports of the staple and help ease concerns over persistently high retail inflation.
Although the wheat area has almost reached a plateau in India’s traditional grain belts in the northern states such as Punjab, Haryana and Uttar Pradesh, growers are planting the crop on some fallow land in the country’s west where farmers have traditionally grown pulse and oilseeds.
“Wheat prices are very attractive,” Nitin Gupta, vice president at Olam Agro India, told Reuters. “We can see a big jump in states like Gujarat and Rajasthan, where farmers could bring barren land under wheat.”
Domestic wheat prices have jumped 33% so far in 2022 to a record 29,000 rupees ($355.19) per tonne, far above the government-fixed buying price of 21,250 rupees.
The surge in wheat prices is despite the ban on exports of the grain, indicating a far bigger drop in this year’s output.
India, also the world’s second biggest consumer of wheat, banned exports of the staple after a sharp, sudden rise in temperatures clipped output even as exports picked up to meet the global shortfall triggered by Russia’s invasion of Ukraine.
India grows only one wheat crop in a year, with planting in October and November, and harvests from March.
Farmers have planted wheat on 15.3 million hectares since Oct. 1, when the current sowing season began, up nearly 11% from a year earlier, according to provisional data released by the Ministry of Agriculture & Farmers’ Welfare.
In Punjab and Haryana, India’s breadbasket states, a lot of farmers decided to bring forward their planting, believing the early-sown varieties would be ready for harvests before temperatures tend to go up in late March and early April, said Ramandeep Singh Mann, a farmer.
Higher temperatures shrivel the wheat crop.
“In Punjab, farmers have already planted wheat on 2.9 to 3.0 million hectares of its normal area of around 3.5 million hectares,” Mann said.
To cash in on higher prices, farmers are also opting for superior wheat varieties such as Lokwan and Sharbati, the premium grades that fetch higher returns.
“Wheat area has gone up, but the crop will require lower temperatures in the weeks to come, and then the weather needs to remain favourable in March and April when the crop ripens,” said Rajesh Paharia Jain, a New Delhi-based trader.
The price of rice in the international market has become volatile in the last year as price of the commodity has jumped some 20 per cent in one year Thailand is the major supplier of rice to Bangladesh. However , Myanmar and India are also sources of rice in case of Bangladesh. The per tonne boiled rice was hovering at 508.00 US dollars as against 429.00 US dollars one year back showing 18.41 per cent hike.
The price of per tone chhola, an essential commodity, was hovering at 666.20 US dollars in the international market as against 718.79 US dollars one year back, showing 7.32 per cent dop.
Meanwhile, the sugar price has increased in the local markets causing sufferings of consumers as the holy Ramadhan begins next month.
Reuters adds: India has produced a record over 5,000 Lakh Metric Tons (LMT) of sugarcane in the sugar season 2021-22. About 3,574 LMT of sugarcane was crushed to around 394 LMT of sugar. 36 LMT of sugar out of this was diverted to ethanol production and 359 LMT of sugar was produced by sugar mills. During 2021-22, the revenue of more than 20 thousand crore rupees was made by sugar mills from the sale of ethanol.
During the sugar season between October and September 2021-22, India has emerged as the world’s largest producer and consumer of sugar. It has also become the world’s second-largest exporter of sugar after Brazil.
Meanwhile, India is not looking at allowing more sugar exports, government and industry officials said recently, dampening speculation that the world’s biggest producer of the sweetener would permit a second tranche of overseas shipments.
India, the world’s biggest sugar exporter after Brazil, exported a record 11 million tonnes in the previous season to September 30, 2022.
But the government has allowed sugar mills to export only 6.1 million tonnes of the sweetener in the current season that began on October 1, 2022. Food price inflation was high at the start of the season, prompting curbs on exports.
But the authorities had said they could take a view on a second tranche of sugar exports after getting a clearer idea about local production.
Mills have already contracted to export about 5.6 million tonnes, and producers, traders and industry officials were expecting the government to allow an extra 2-4 million tonnes of overseas shipments.
But expectations of a drop in sugar output have dampened prospects of any additional exports during the current 2022-23 season, government and industry officials said.
Lower sugar exports from India could raise global prices and allow rivals Brazil and Thailand to increase their shipments.
“Sugarcane yields were far lower than last year. The production is not sufficient to permit additional exports,” said an official with direct knowledge of the matter. He did not wish to be named as he is not authorised to talk to the media.
Meanwhile, Bangladesh taka lost 25-30 per cent against the US dollar in the last 5/6 months that kept prices of consumers high in the local market. Price of 5 litre soybean oil is selling at taka 940-950 in the kitchen market. Freight cost hike also pushes the price of consumer goods in the market. However, according to an official of the Consumer Association of Bangladesh, strong monitoring by the government stakeholders can help reduce price of consumer goods in the market.
