The Hindu : National : High bids for import of wheat

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Thursday, Jul 05, 2007
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High bids for import of wheat

Gargi Parsai

NEW DELHI: The State Trading Corporation on Wednesday received bids in the price range of $ 318-360 a tonne for 10 lakh tonnes of wheat for the Public Distribution System.

The United States and the Australian Wheat Board did not participate. American wheat is out of the reckoning because it has not met India’s quality specifications. The bids are valid till July 10 and grain shipments must be made between August and November.

The price is much higher than $ 263-302 that was quoted when India sought tenders in May.

They were however cancelled.

At that time Swiss Glencore AG and American Cargill Inc. trading companies bid for about 3.06 lakh tonnes of wheat against 10 lakh tonnes India was seeking.

This time round besides Glencore and Cargill, Dutch Concordia Agritech and German Toepfer Company are the major companies which have bid for supplying wheat.

The lowest bid is said to be for $ 317 a tonne freight on board.

As for the cancellation of the import order in May, Food Ministry sources said had that wheat arrived, there would have been impact on domestic procurement which was under way.

The government was successful in procuring an additional 10 lakh tonnes by extending the procurement season till June 15 at the minimum support price of $210 a tonne.

This offset the 10 lakh tonnes it would have imported at an estimated price of $262 a tonne.

Wheat prices shot up after the United States Department of Agriculture gave a June 11 forecast of tightening of the wheat position because of lower production in Ukraine and Russia.

The estimates of Australian wheat will come later.

Even in May, when the government cancelled the tender for 10 lakh tonnes after the bids had been made, the global futures trend showed that wheat prices would “soften” between $ 180 and 192 a tonne.

That does not seem to be the situation now, sources admit.

It is likely that India will now go in for purchase of lower quantity in view of the high cost of imported wheat.

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