Bangladesh: Government buys costly US wheat before next tariff bargain

Ahead of next negotiation with the Trump administration on tariff reduction, the government approved procurement of 220,000 tonnes of wheat from the United States at a price much higher than international-market rates.

Following the all-clear, Agrocorp International Pte Ltd, an authorised supplier in US Wheat Associates, will deliver the grain to Bangladesh’s Directorate General of Food at a price of $302.75 per tonne.

Presently, wheat price in Russia and Ukraine — the main wheat-sourcing countries for Bangladesh — is around $235 per tonne while in Europe the rate is around $240 per tonne.

The Advisers’ Council Committee on Government Purchase in a meeting Wednesday with Finance Adviser Dr Salehuddin Ahmed in the chair gave the approval for the wheat buy-seen as part of a package of tradeoffs to narrow a trade gap and get the jacked-up additional US tariffs on Bangladeshi exports withdrawn.

The Trump administration slapped 35-percent reciprocal tariff on Bangladeshi goods, in addition to existing 15-percent duties, effective from August. “Buying wheat from the US will give us advantage in tariff negotiation though their price is high,” the finance adviser told newsmen after the meeting at Bangladesh secretariat.

About the price differentials, he said the quality of US wheat is comparatively better.

Mr Ahmed said the rationale behind buying wheat from the US is diversifying the sourcing. Because, he said, sometimes there is some uncertainty in the Russian bloc and Ukraine bloc due to tensions at the black sea.

“Our negotiation with the US is now underway to increase imports from there. This import will be helpful to us in negotiation,” he told the press.

As businesses, particularly apparel exporters, seemingly remain on tenterhooks about their trade fate in a matter of days now, the economic pointsman expressed a note of optimism that the US administration would lower the reciprocal tariffs to some extent.

He said the commerce adviser will go to the US with his team for the decisive round of tariff negotiations.

Regarding private sector’s plea to appoint a lobbyist to help lessen tariffs on the US market, Mr Ahmed says there is no issue of engaging lobbyist in this case.

Because, he says, usually lobbyist is appointed for a long-lasting negotiation. In this particular case, steps have to be taken as quick as possible. “The lobbyists won’t get access to that office, let alone holding negotiation.”

However, Mr Ahmed thinks US private-sector lobby is very important. Bangladeshi private sector can contact them for any assistance, he suggests.

He notes that Bangladesh has good image in the United States. “Recently we cleared dues of some American companies, like Excelerate Energy, Chevron, and MetLife. The US chamber has sent me a letter expressing positive approach to Bangladesh.”

The adviser informed newsmen that the meeting approved proposals to import fertiliser, liquefied natural gas, and lentils, among others.

Tags: price, United States, wheat, Bangladesh, tariff