Can Bangladesh crisis lead to short-term spikes in agri commodity prices?
India exported agricultural and allied commodities worth approximately $5,541.8 million to Bangladesh in FY22, marking a 94 per cent increase over the previous year, with major exports including cotton, wheat, non-basmati rice, and sugar. On the flipside, India imported agricultural commodities worth $558.12 million from the country, with key imports including spices, oil meals, jute and vegetable oils.
Bangladesh Crisis: Indo-Bangla trade came to a halt on Monday amid already heightened disruptions owing to violent protests in Bangladesh that led to the resignation of its President Sheikh Hasina. On Sunday, Bangladesh announced a three-day holiday that stalled trade activity amid already-impacted operations at Petrapole and Benapole ports. Additionally, major agricultural exports and imports between India and Bangladesh were impacted.
Lack of clearance from Bangladeshi customs halted movements at land ports, completely bringing to a halt some activity noticed in the morning, according to West Bengal Exporters Coordination Committee secretary Ujjal Saha.
India exported agricultural and allied commodities worth approximately $5,541.8 million to Bangladesh in FY22, marking a 94 per cent increase over the previous year, with major exports including cotton, wheat, non-basmati rice, and sugar. On the flipside, India imported agricultural commodities worth $558.12 million from the country, with key imports including spices, oil meals, jute and vegetable oils.
Experts are divided on the potential impact of the upheaval in Bangladesh on trade in India.
"The resignation of Prime Minister Sheikh Hasina and the ensuing political instability in Bangladesh have profound implications for Indo-Bangladesh trade, particularly in the agricultural sector. The suspension of trade activities and the potential for prolonged disruptions could lead to short-term price spikes for key agricultural commodities," said Ajay Kedia, MD at Kedia Commodities.
"As the situation unfolds, stakeholders in both countries will need to navigate the challenges posed by this unexpected political upheaval," said Kedia.
The Bangladesh situation is only likely to impact specific companies, said Madhavi Arora, Lead Economist, Emkay Global Financial Services.
Meanwhile, Bangladesh announced a three-day trade holiday on Sunday, excluding essential services.
With inputs from agencies
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.