Bangladesh's businessmen have to pay extra to bring wheat from Canada as they need to get confirmation from a foreign bank to open letters of credit (LCs) at first to import the grain, according to a study.

LC confirmation from any bank should be good enough to make the transaction, suggested the study released last week.

The study report also suggested the Canadian exporters go for enough mandatory drying of wheat before loading it into the vessels as sometimes the imported Canadian grain dampens after arrival in Bangladesh.

The wheat might have dampened because of containing higher moisture in it, said the study conducted by the Canada Bangladesh Chamber of Commerce and Industry (CanCham).

Fumigation is mandatory for grain cargo in Bangladesh, but Canada does not do it. As a result, importers have to bear the cost and hassle of fumigation en route, according to the study.

The CanCham in collaboration with the Canadian High Commission in Bangladesh launched the new study on “Grain import in Bangladesh: Canadian grains perspective”.

Traders, importers, exporters, diplomats and trade body leaders attended the event at the Four Points by Sheraton Dhaka on August 3.

The chamber carried out the study as Canada is increasingly becoming a major supplier of grains for Bangladesh, especially for wheat thanks to changing dietary habit of people.

Wheat import from Canada jumped 31.71 percent to 15.49 lakh tonnes last year from 11.76 lakh tonnes in 2015, the study said.

The volume of imports tripled in five years from 1.8 million tonnes in 2012-13 to 5.4 million tonnes in 2016-17, according to Masud Rahman, president of the CanCham.

Local growers can supply 13.50 lakh tonnes of wheat a year.

The import of wheat is rising as consumers are cutting their overdependence on rice as their dietary habits have changed due to rapid urbanisation, the study said.

Many diabetic patients consume bread twice a day instead of rice as per the recommendations of the physicians.

The revolution of processed foods industries is also responsible for the rise in import of wheat. Many local industrial giants import wheat to make bread and other processed food items.

Canada is also becoming a major source for oil seeds, soybean oil, peas and lentils.

“With this growing market, we have witnessed the increase in bilateral merchandise trade between Canada and Bangladesh over the past few years, from under 600 million Canadian dollars in 2005 to about 2.4 billion Canadian dollars in 2016,” said Benoit-Pierre Laramee, Canadian high commissioner in Bangladesh.

Canada exported about Can$771 million merchandise items in 2016, of which 85 percent was agriculture items.

Agriculture in Canada is also a field where new technologies are adding value to existing crops and opening up new markets for products.

New technologies are helping increase yield and improve the temperature and drought resistance of agricultural crops and mitigate land-use changes, the envoy said.

“Bangladesh can certainly benefit from the Canadian advancement and also can learn from our vast experience,” Laramee said.

Bangladesh imports about $5.5 billion worth of agricultural food items a year, with Canada's share standing at 11 percent, he said.

Bangladesh has recently emerged as the fifth largest importer of wheat, said Rahman.

The Food and Agricultural Organisation estimated that Bangladesh's wheat import rose by 24 percent year-on-year in 2016-17.

Bangladesh imports wheat mainly from Canada, Australia, Argentina, Russia and Ukraine. Local production can meet only 20 percent of the annual requirement, Rahman said.