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Mamuni Das

Traders warn that the moment India enters the international market as a buyer, prices would further escalate by $10-15 a tonne.

New Delhi , June 14

WITH imports unviable and domestic market prices firming up, the Government has its task cut out in maintaining food security.

In the domestic market, wheat prices have already firmed up touching Rs 7,550-7,570 a tonne.

In the international market, Australian prime wheat (APW) is ruling high at about $140 (Rs 6,090 at Rs 43.5 per dollar) per tonne at f.o.b. basis now.

On a c.i.f. basis, adding freight charges of about $40 (Rs 1,740) per tonne, APW lands at Indian ports on an average price of $180 (Rs 7,830) per tonne. At 50 per cent duty levels, the duty element is at $90 (Rs 3,915), taking the price to $270 (Rs 11,745) per tonne. The port handling charges (unloading, bagging, etc) are at about Rs 500-600 per tonne in Southern ports, thus increasing the price to Rs 12,245-12,345.

In the western ports like Kandla, handling charges hover at a relatively lower Rs 400 thus taking the price for importers at ports to Rs 12,145 per tonne of wheat. "Transporting wheat to flour mills, would have its own costs," said a trader.

French wheat is priced at about $130-135 per tonne f.o.b., with $40 as freight charge the landing price touches about $175 per tonne. With duty of $87.5, the importers would have to pay $262.5 (Rs 11,419). This excludes the port handling charges of Rs 400-600.

Importing wheat from Ukraine, Kazakhstan and Russia, the quality of which would be relatively inferior, would cost in the $140-145 range at c.i.f. basis, with the current f.o.b. prices hovering around $110-120 per tonne. With duties, the price shoots up to $210-217.5 (Rs 9,135-9,461). The handling charges further increase the price by Rs 400-600 depending on the port used for landing.

Wheat from Argentina, which is closest to Indian wheat and blends easily, would cost about $125-130 on f.o.b., but the freight charges of $60 per tonne take the price up to $185-190 at c.i.f. With duties, prices would touch at least $277.5 (Rs 12,071).

Moreover, traders warn that the moment India enters the international market as a buyer, prices would further escalate by $10-15 a tonne.

Incidentally, from about November 2000, India has exported about 17.83 million tonnes of wheat from the central pool at low prices ranging from $90 to $110. Wheat exports from the central pool were at 14.69 lakh tonnes (lt) in 2000-01, 27.36 lt in 2001-02, 55.28 lt in 2002-03, 72.2 lt in 2003-04 and 8.76 lt in 2004-05.

Ironically, when India was an exporter, wheat prices plummeted to low levels and now that it may need to import, it would have to do so at much higher levels, point out sources.

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