The lowest offer in a Bangladesh tender to buy 50,000 tonnes of wheat that opened on Monday was $359.66 a tonne, including freight, insurance and other expenses, an official from the state grains buyer said. It was the third tender issued by the state grain purchasing authority since the current fiscal year started in July, as it tries to secure supplies of wheat amid rising concerns about crops being affected by adverse weather in leading exporters the United States, Russia and Australia.
A domestic firm made the lowest offer among three bidders in the tender, with the wheat to be shipped within 40 days of signing the deal. The offer will now be submitted to the cabinet purchase committee for approval. The government plans to import 800,000 tonnes of wheat in the year to June 2013, while private traders import 2.5 million to 3 million tonnes annually.
Monday's offer is higher than the lowest offers made in the previous two tenders. The government paid $352.95 a tonne and $344 a tonne to buy a total of 100,000 tonnes of wheat. Concerns about smaller-than-expected crops sparked a rally in wheat futures last week amid hopes that tightening supply would boost export demand for US offerings.
In late 2010, Bangladesh suffered badly, with a number of deals scrapped by the suppliers after a spike in global wheat prices following the Russian ban. However, the south Asian country's overall food supply is largely safe this time, with plenty of rice in stocks.
Wheat consumption is rising in Bangladesh in line with steady economic growth and changes in lifestyles, although rice remains the staple food for its 160 million people. Domestic wheat production, however, has stagnated at nearly 1 million tonnes in recent years.