DHAKA: Disruptions in imports following Russia’s invasion of Ukraine have hiked up staple prices in Bangladesh, a top commerce ministry official said on Tuesday, amid growing concerns over food security.
Bangladesh largely depends on Russian and Ukrainian markets for the bulk of its annual wheat and oilseed imports.
Russia’s multipronged assault on Ukrainian territory, which began on Feb. 24, has been followed by a host of sanctions against Moscow, with major international companies pulling out of the market and some Russian banks banned from the Swift payment system that is key for money transactions worldwide.
The sanctions and the volatile situation in Eastern Europe have resulted in a sharp increase in prices for staples in the South Asian nation of 170 million people.
“Due to the Ukraine war, the prices of essentials were fluctuating in the international market,” Commerce Ministry Senior Secretary Tapan Kanti Ghosh told Arab News. “Large importers were hesitant to open new letters of credit for importing wheat and edible oil, which triggered a price hike in the market.”
The increasing prices have forced the government to launch on Sunday a special food subsidy program for some of its poorest citizens.
“Ten million people will be entitled to receive this food support,” Ghosh said, adding that the aid was aimed mostly at rural areas and will initially run for six weeks, until the end of the Muslim fasting month of Ramadan, which starts on April 1. But the program will be an additional burden for the country where COVID-19 disruptions over the past two years have pushed an estimated 26 percent of the population into poverty — a rise of over 5 percentage points since pre-pandemic times.
Dr. Ahsan H. Monsur, executive director of the Policy Research Institute of Bangladesh, told Arab News it will not be easy to keep the program running, as the government is already subsidizing the prices of energy and fertilizer, which increased during COVID-19 lockdowns.
“It will be a great achievement for the government if they can successfully disburse the food aid to 10 million people since it’s a huge number,” he said. “I think the total subsidy amount for this year may cross the figure of $1.1 billion.
“Due to COVID-19 issues, there was already a disruption in the global supply chain,” Monsur said, adding that the quality of life of Bangladeshis has already been “severely impacted.”
“The Ukraine war just added a blow to the existing situation.”