Bangladesh seeks assured supplies of five food commodities from India
Bangladesh has sought assured annual supplies of five food commodities, including rice and wheat, from India to tackle fluctuations in market prices and shortages, people familiar with the matter said.
The two countries have held discussions on this issue and Dhaka has asked New Delhi to sign a memorandum of understanding on fixed quotas for these commodities, including onions, ginger and garlic, the people said on condition of anonymity.
However, the two sides have not yet been able to reach common ground in view of sensitivities linked to the export of such commodities, said the people aware of discussions held so far.
India banned wheat exports in May 2022 and exports of non-basmati rice in July 2023 to cater to domestic requirements. The government banned the export of onions for about four months last December. However, India has supplied rice, wheat and onions to countries in the neighbourhood, such as Afghanistan, Bangladesh, Bhutan, Nepal and Sri Lanka, and key partners, such as the United Arab Emirates (UAE), Indonesia and Vietnam, on a case-to-case basis.
Ahead of the Islamic month of Ramzan, the government allowed the export of 50,000 tonnes of onions to Bangladesh and another 14,400 tonnes to the UAE in early March in response to requests through diplomatic channels. These were the first exports after the ban kicked in.
“While all the supplies have not yet reached Bangladesh through the National Cooperative Exports Ltd, the Indian government’s decision had the effect of immediately cooling prices in Bangladeshi markets, which had increased sharply since last year,” one of the people cited above said.
“The move to have fixed quotas for these five commodities is aimed at having some protection from export bans and ensuring uninterrupted and assured supplies every year,” the person added.
There was no official word from the Indian side on the request from Bangladesh, which figured in visiting Bangladesh foreign minister Hasan Mahmud’s meeting with commerce minister Piyush Goyal in New Delhi in January. Mahmud told reporters at the time he had sought additional supplies of sugar and onions in line with the Sheikh Hasina government’s focus on reducing the prices of essential commodities.
Bangladesh’s imports of rice from India increased from $9.7 billion in 2021-22 to $11.1 billion in 2022-23, while wheat imports were worth $2.1 billion in 2021-22 and $1.5 billion in 2022-23, according to official figures from the Indian side.
Imports of onions from India increased from $460.5 million in 2021-22 to $561.8 million in 2022-23, while imports of ginger fell from $93 million in 2021-22 to $35.9 million in 2022-23. Imports of garlic rose sharply from $2.9 million in 2021-22 to $11.3 million in 2022-23.
In 2019, India’s ban on onion exports due to soaring domestic prices had a major impact on Bangladesh. During a visit to India at the time, Bangladesh Prime Minister Sheikh Hasina jokingly told a business forum in New Delhi in the presence of Goyal that she had asked her cook to stop using onions. She also said India should alert Bangladesh in advance about such bans.
Bangladesh remains one of India’s most trusted partners in the neighbourhood and the two sides have focused on increasing connectivity for trade, energy supplies and tourism. Hasina’s victory in the general election in January has also given a boost to the burgeoning ties.
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