An Indian tender for the import of one million tonnes of wheat is unlikely to generate much market interest due to tight supplies, and purchases could be trimmed by high prices, trade sources told Reuters on Monday.
Most traders contacted said the State Trading Corp would probably buy much less than the tendered one million tonnes, with prices likely to range between $280 to $300 per tonne, nearly 25-30 percent higher than last year.
"I see only a lukewarm response to the tender. All the regions are expensive," said a New Delhi-based commodity trader. "It is the fag-end of the season everywhere." But he said the government would soon have to issue a second tender, with purchases from farmers expected to fall short of what was needed for a second year in a row.
"India will have to import, as the procurement from local farmers is quite low. They may have to import 3 to 5 million tonnes," the trader said.
An official involved in import negotiations said the tender, which opens for bidding at 1530 hours (1000 GMT) on Monday, would not be extended, and said it was to talk about the kind of response expected.
Others said it would make more sense to buy wheat overseas in a few months time, when supplies have improved. "India will not get bids for one million tonnes import as wheat from Europe will be ready only in June-July," said a trader with a Netherlands-based commodities firm. Nothing has really changed in terms and conditions of this tender from previous ones on fumigation and sampling, which could open up their participation," said another official with an international commodity trading firm.
Despite India scouring world markets from more than 5.5 million tonnes of wheat last year, the US did not supply any of the grain due to fumigation, inspection, and sampling problems. The Food Corp of India, which buys foodgrains on behalf of the government, has so far bought 7.85 million tonnes from domestic farmers.
Comments
Comments are closed.