More than half of the wheat India agreed to buy after a recent tender will come from Canada, with other cargoes expected from Europe, the chief of India's top grain buying body said on Thursday.
"I have closed the first deal and we will not be rushing to float the next tender," Arvind Pandalai, chairman and managing director of the State Trade Corp told Reuters on the sidelines of a regional wheat buyers conference in Bali.
The corporation earlier this week decided to import 511,000 tonnes of wheat at $317-$330 per tonne from three global firms. It had sought a million tonnes of the grain but trimmed purchases due to high bid prices. Traders said there was no pressure to import now as domestic supplies were adequate. The government could have got a better deal if it had waited for the Australian crop to arrive in October-November, they added.
"The domestic supply situation is very comfortable now," Pandalai said. "We have enough wheat to meet our domestic needs. Imports are mainly for building buffer stocks." India, which needs 12 million tonnes of wheat annually to feed the poor through welfare programmes and keep a lid on prices, has bought around 11 million tonnes of new season wheat from local farmers.
"Domestic prices are still below international prices. So where is the reason to panic?" Pandalai said. "We can afford to wait at least until November when the Australian crop is in and world prices ease a bit."
But with international prices showing no signs of easing, India is likely to issue further tenders before too long, traders said, as it feels it needs to buy at least 3 million tonnes to supplement this year's harvest. Wheat prices touched 11-year highs on the Chicago Board of Trade in June and traders expect little respite as world supplies are seen falling to a 30-year low due to erratic weather in the United States and drought in Russia and Ukraine.
The US on Wednesday criticised India's wheat import regulations as "unrealistic" after strict controls on weed presence, fumigation and inspection barred purchases of US grain in the latest tender.
Grain analysts said this had pushed up the prices at which India contracted to buy wheat. "We will be very happy to buy from them (the US) in future tenders if they meet our specifications," Pandalai said in Bali.