Bangladesh Approves $66.6M U.S. Wheat Purchase to Ease Trade Tensions

Bangladesh has approved the purchase of approximately 220,000 metric tons of wheat from the United States. This move is aimed at easing trade tensions with the U.S. and reducing the high import tariffs imposed by the Trump administration. The wheat will be procured through a government-to-government agreement at a price of $302.75 per metric ton, with a Singapore-based trading company handling the supply.

In early July, Bangladesh signed a memorandum of understanding (MoU) to import 700,000 metric tons of wheat annually from the U.S. over the next five years. Currently, Bangladesh heavily relies on the Black Sea region for wheat imports due to lower prices, while also importing smaller quantities of high-quality wheat from the U.S. and Canada for blending purposes.

However, a trade official based in Dhaka noted that the U.S. wheat will not replace imports from the Black Sea region. Historically, Bangladesh has imported low-priced wheat from the Black Sea for projects like "food for work." The newly imported U.S. high-protein wheat will enter the local market, competing directly with high-protein wheat from Canada, which is relied upon by private flour mills.

The price difference between U.S. wheat and Black Sea wheat is approximately $30 to $40 per metric ton. This premium is justified by the higher protein and gluten content in U.S. wheat, which are essential for producing high-quality flour. If quality is a priority, the price is considered reasonable.

On July 27, Bangladesh also placed an order for 25 aircraft from Boeing and increased imports of key U.S. goods to alleviate trade tensions. A Bangladeshi government delegation is currently in the U.S. for trade negotiations.