Australian wheat shipments to India, part of a 500,000 tonne contract, have been delayed over quality concerns, Indian officials and traders said on Friday.
"We've received two ships now. A third is expected on May 19 or 20. There's some delay in shipments," a leading food ministry official told Reuters, adding the State Trading Corporation had raised the issue with Australian company officials.
Australia's AWB Ltd won the wheat contract on the basis of a global tender that stipulated quality, delivery and other conditions.
"Yes, the shipment has been delayed," a senior official at the State Trading Corp, which floated the tender, told Reuters. He did not elaborate.
Media reports said some grain shipments meant for export to India might be diverted to other countries due to India's quality concerns. AWB officials were not immediately available for comment. Officials said two ships carrying about 91,000 tonnes of wheat had already been unloaded at southern Indian ports.
Trade officials said the delays could trigger domestic wheat price rises.
They said another Indian tender to import 3 million tonnes of wheat was unlikely to attract a large number of foreign bidders due to the tough entry criteria.
"The shortage in the market could become more pronounced. It will increase the prices," said D.P. Singh, president of the All India Grain Exporters Association.
The government has estimated wheat production at about 73 million tonnes this year, down from an earlier projection of 76 million, but traders say the output could be even lower.
Spot prices of wheat were at 940 rupees (21 dollars) per 100 kg in the central Indian city of Indore on Friday, up from 830 about a month ago.
However, a New Delhi-based analyst said the wheat shortage scare was overblown as the government had bought around 10 million tonnes from farmers for replenishing reserve stocks.
"This will be enough to tide over any shortage immediately. From July, import shipments would start coming in," he added.
India needs to maintain a large wheat stock to control prices, as the country produces only one crop a year.
Indian officials had initially claimed the first shipment of Australian wheat contained a high pesticide content, but subsequent tests revealed it was safe to eat.
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