(Updates prices in fifth paragraph.)
March 20 (Bloomberg) -- Bangladesh, South Asia’s biggest wheat importer, may boost purchases by 19 percent this year after prices fell to an eight-month low, according to the nation’s Directorate General of Food.
Overseas buying by state agencies, private traders and flour mills may climb to 2.1 million metric tons in the year ending June 30 from 1.77 million tons a year earlier, Badrul Hasan, director of procurement, said in a phone interview.
Futures in Chicago fell to the lowest level since June on March 6 on speculation that farmers from Australia to Europe to the U.S. will boost harvests as fields recover from drought and heat waves. Prices will probably drop 16 percent to $6 a bushel by the end of the year, according to the median of 16 analyst and trader estimates compiled by Bloomberg.
“Falling prices in the global markets may encourage traders to buy more from overseas in the coming months,” Abul Bashar Chowdhury, chairman of Chittagong-based BSM Group, said in a phone interview. “The cost will be comparatively low if we purchase wheat from India.”
Futures have fallen 23 percent since reaching a four-year high of $9.4725 in July. The contract for May delivery advanced 0.8 percent to $7.2775 on the Chicago Board of Trade by 3:34 p.m. in Singapore today. Prices fell to as low as $6.80 this month, the cheapest since June 22.
India, the world’s second-biggest wheat producer, authorized exports of 5 million tons from state reserves by private companies, Food Minister K.V. Thomas said March 7. That’s in addition to 4.5 million tons already approved for shipment by government-run companies since July, he said.
India will be a major source for imports by Bangladesh, Hasan said from Dhaka yesterday. India is selling wheat mostly to Southeast Asia, the Middle East and Africa at prices ranging from $305 to $315 a ton, displacing supplies from Ukraine and Australia, according to Veena Sharma, secretary of the Roller Flour Millers Federation of India.
“Bangladesh’s major sourcing countries will be India and Canada,” BSM’s Chowdhury said.
Imports fell 14 percent to 1.18 million tons between July 1 and March 7 from a year earlier, according to data from Bangladesh’s Food Planning and Monitoring Unit.
The Directorate General of Food yesterday sought tenders for imports of 50,000 tons of wheat, according to a statement on the agency’s website. Traders have until April 2 to submit bids, according to the agency.
--Editors: Thomas Kutty Abraham, James Poole