The Hindu Business Line : Global wheat prices may come under pressure on STC move

Other factors
Rains have boosted the chances of a better crop in Australia and Europe.
Procurement for buffer stocks are likely to top 120 lakh tonnes.

Chennai May 30 Global wheat prices are likely to come under pressure, while domestic prices might rule stable following the State Trading Corporation's move to scrap the tender to import 10 lakh tonnes wheat.

The corporation had floated the tender on behalf of the Food Corporation of India (FCI) for buffer stocks.

"Internationally, wheat prices had increased because of the Indian tender. With STC scrapping the tender, it could lead to fall in prices," said Mr Si. Kannan, Associate Vice-President of Kotak Commodities Services Ltd.

"STC wheat import had been engaging the minds of traders in Chicago Board of Trade," he said.

The global wheat market could also come under pressure due to improvement in crop prospects across the world following good rains.

Rains beneficial

Rains have boosted changes of better wheat crop particularly in Australia and Europe. In Australia, wheat production could be a record 26.5 million tonnes for the coming season beginning on June 1. This is against the current season's poor crop of 10.5 million tonnes.

On Wednesday, wheat in the European market for delivery in November was quoted at $213.65 (Rs 8,650) a tonne.

However, Mr Atul Chaturvedi, President of Adani Exports' Agro Division, said global wheat market could continue to rule at current levels.

"The world wheat trade expects India to import three lakh tonnes. Therefore, there may not be any fall in prices," he said.

`Wrong time'

Adani was one of the firms that bid for supplying wheat to STC.

"It was the wrong time to invite bids for wheat import," Mr Chaturvedi said, referring to STC's move to scrap the tender in view of quote in excess of $265 (Rs 10,750) a tonne.

Prices in the domestic market are likely to be unaffected by the scrapping of the tender.

"I see no change in the domestic market situation," Mr Chaturvedi said.

But Mr Pramod Kumar, President, Karnataka Roller Flour Mills and Executive Director, Belgaum Flour Mills, said the domestic market could remain subdued in view of STC's move. He also said the scrapping of the tender was expected.

Prices stable

Wheat prices in the domestic market seem to have stabilised around Rs 900 a quintal and, on Wednesday, they were quoted at Rs 907-910 in New Delhi.

"Farmers are holding on to stocks. There is no problem of availability. If FCI can extend procurement for buffer stocks for some more time, it will get an additional 10 lakh tonnes," Mr Kumar said, adding that central procurement could easily top 120 lakh tonnes.

This is against the target of 150 lakh tonnes set by the Union Government.

`Under control'

" Procurement by the Central agencies has gathered pace since the second week of this month," he said. "The Government may have scrapped the tender as inflation rate is declining and it is confident of keeping it around RBI's target of 5 per cent," Mr Kannan said.

"Prices are more or less under control," he said.

More Stories on : Wheat | Exports & Imports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Wheat import tender scrapped

Global wheat prices may come under pressure on STC move

Monsoon waits for fresh southerly surge

Firm trend

Rubber Board invites bids for materials

Spot rubber rules steady

Low volume continues at Coonoor tea sales

NDDB to help promote dairy sector in Jharkhand

Pepper futures up a tad on buying support

YES Bank sets up $100-m fund for farm sector