Glencore makes lowest offer in tender to sell wheat to Bangladesh

Glencore International made the lowest offer of $279.75 a tonne in a tender to sell 50,000 tonnes of wheat to Bangladesh, an official from the state grains buyer said on Wednesday.

The only other participant in the tender, opened late on Tuesday, was Olam International, which offered $309 a tonne, including freight, insurance and other expenses.

wheatThis was the fourth international wheat purchase tender issued by the Directorate General of Food since the current financial year started in July.

The state grains buyer plans to import 900,000 tonnes of wheat in the year to June 2015.

The imports are crucial for the South Asian nation to feed its poor and keep domestic prices stable.

Glencore also made the lowest offer of $280.87 a tonne in another Bangladesh tender that opened late last month, the highest price in the tenders in the current fiscal year as uncertainty over Russian supply supports global wheat prices.

It also secured a tender to supply 50,000 tonnes of wheat to Bangladesh after submitting the lowest offer of $270 a tonne. The origin of the wheat will be Ukraine, another official from the state grains buyer told Reuters last month.

Olam International made the lowest offer of $268.47 a tonne in a tender that opened on Dec. 14.

The state grains buyer has also agreed to buy 250,000 tonnes of Ukrainian wheat at $297.50 a tonne including cost, freight, insurance and other port-related expenses in a government-to-government deal with Ukraine.

Apart from the government, private traders bring in 2.5 million to 3 million tonnes of wheat each year to help meet annual demand for more than 4 million tonnes. Bangladesh’s domestic production amounts to almost 1 million tonnes.

Bangladesh’s reserves of rice and wheat have risen to more than 1.2 million tonnes, from nearly 1 million tonnes a year earlier. While wheat consumption is rising, rice remains the staple food for Bangladesh’s 160 million people.

Plentiful rice stocks coupled with strong output have prompted the Bangladesh government to come up with an export pact with Sri Lanka, where prices of the grain have shot up after production dropped due to an 11-month drought, which experts consider to be the worst in its recent history.

Benchmark Chicago wheat rose on Wednesday, adding 2.2 percent in three consecutive sessions as bitter cold across the U.S. grain belt threatened the dormant winter crop.

– Reuters


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