A Dhaka official announced on Wednesday that the Bangladeshi government had approved the purchase of 220,000 metric tonnes of wheat from the United States in an effort to reduce the steep tariffs placed by the Trump Administration and ease U.S. Trade tensions.

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. The Singapore-based trading company will supply it.

In July, Bangladesh signed an agreement to import 700 000 tons of wheat per year from the United States for the next five-year period.

Bangladesh imports large quantities of lower-cost grain from the Black Sea Region, but also imports smaller volumes from other countries such as the United States and Canada to blend with the cheaper wheat.

A Dhaka-based broker said that U.S. Wheat won't be able to replace Black Sea imports.

He said that the government of Bangladesh used to import lower-cost grain from the Black Sea Region in order to run programs like "food-for-work".

The high-protein Canadian Wheat that private millers depend on will be directly competing with it when they bring in the U.S. wheat.

He said that there was a price difference of $30 to $40 between U.S. wheat and Black Sea Wheat, but this premium was for the gluten and protein which are essential ingredients in good flour.

The price is reasonable if you are looking for quality.

In an effort to ease trade tensions, Bangladesh ordered 25 Boeing aircraft on July 27 and increased imports of American goods.

Officials in Dhaka confirmed that a Bangladeshi government delegation was in the United States this week for trade negotiations. Ruma Paul, Michael Hogan and Naveen Thkral contributed additional reporting from Hamburg and Singapore. Editing was done by Ros Russell and Ema Sithole Matarise.

(source: Reuters)