DHAKA (Reuters) -Bangladesh's government has approved the purchase of about 220,000 metric tons of wheat from the United States as part of efforts to cool U.S. trade tensions and reduce steep import tariffs imposed by the Trump administration, a Dhaka official said on Wednesday.
Bangladesh has approved the purchase from the United States under a government-to-government deal at a price of $302.75 per ton, the food ministry official said. It will be supplied by a Singapore-based trading house.
Earlier
in July, Bangladesh signed a memorandum of understanding to import 700,000 tons of wheat annually from the United States over the next five years.
Bangladesh currently relies heavily on imports from the Black Sea region for lower-cost wheat, while importing smaller volumes of higher-grade grain from countries like the United States and Canada for blending purposes.
However, a Dhaka-based trader said U.S. wheat won’t replace imports from the Black Sea.
“Previously, the Bangladeshi government was importing lower-cost wheat from the Black Sea region to run programmes like food-for-work,” he said.
“But now that they’re bringing in U.S. high-protein wheat, it’ll eventually find its way into the local market and when it does, it will directly compete with the high-protein Canadian wheat that private millers rely on.”
There was about a $30 to $40 price difference between U.S. and Black Sea wheat, but "that premium is for the protein and gluten that’s essential in good flour”, he said.
“So the price makes sense if you want quality.”
On July 27, Bangladesh also ordered 25 aircraft from Boeing and ramped up imports of key American goods in an effort to defuse trade tensions.
A Bangladesh government delegation is in the United States for trade talks this week, officials in Dhaka said.
(Reporting by Ruma Paul; Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; Editing by Ros Russell and Emelia Sithole-Matarise)
