The Hindu Business Line : Sunil Agro in talks with global cos to import wheat

Offers on hand
The company is getting offers of $190-195 per tonne for Black Sea wheat
It is also in talks with the AWB for importing 35,000 to 40,000 tonnes this year.

Bangalore , July 10

Bangalore-headquartered Sunil Agro Foods Ltd is in talks with a few international companies for procurement of wheat following the Government's decision to cut import duty from 50 per cent to 5 per cent.

The companies include Singapore-based Agrocorp and Concordia Agritrading of the Netherlands for Black Sea wheat (grown in the Black Sea region of Turkey, Ukraine and Russia).

"We have been getting offers of $190-195 per tonne for Black Sea wheat. Talks are also on with the Australian Wheat Board for import of Australian wheat. We should be importing 35,000 to 40,000 tonnes this year, if prices are okayed," says Mr Pramod Kumar, Executive Director, Sunil Agro Foods, which supplies wheat flour to companies such as ITC, Britannia, Nilgiris and Nestle for their units in the South.

The company is also planning to come out with its own wheat brand `Sunil - Chakki Fresh Atta' in about three months in Karnataka.

So, is import a feasible solution to tide over the crisis in the wheat market, which saw prices shooting up in the last few months?

"The Government's decision to cut import duty has, one, stabilised local prices and, two, fixed an upper limit of wheat prices; earlier, we were in a blind spot. In May-June, when wheat prices went up to Rs 10,800 per tonne, our revenue went down by 15-20 per cent. Now, it has stabilised at Rs 10,400. But whether imports will actually be beneficial, it is too close to call," says Mr Kumar. "Today there is a mismatch between international and local prices. For instance, Australian wheat costs Rs 700-800 per tonne more than Indian wheat. While Black Sea wheat prices are closer to local prices; but even they will have to be discounted by Rs 500-800 for them to be feasible. Either international prices have to come down or Indian prices have to go up. Also, the Government has to remove import duty if it is serious about stabilising the wheat market. Imports will then become more attractive."

Currently, Sunil Agro procures wheat from local trade in Punjab, Uttar Pradesh, Delhi, Rajasthan and Madhya Pradesh. The idea of India as a self-sufficient economy has been debunked with the wheat import duty cut, says Mr Kumar.

Production low

"Wheat production in the country is low. My estimate is that India produced about 68 million tonnes of wheat this year (2006-2007), while ideally we should have made 75 million tonnes. We are now importing everything from pulses, edible oil to sugar."

According to a Mumbai-based trader, imports will have to continue next year too going by the shortfall in wheat production.

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