• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Harish Damodaran

New Delhi June 13 International wheat prices hitting new highs could not have come at a worse time for the Centre, which is planning to float a fresh tender to import 20 lakh tonnes (lt) of wheat by the month-end.

On Tuesday, the July wheat contract at the Chicago Board of Trade (CBOT) scaled an 11-year-high of $ 5.76 per bushel or $ 211.65 per tonne (one bushel equals 27.215 kg). There is speculation even of prices crossing the $6 per bushel or $220-a-tonne mark in the near term. November futures at the Euronext.life exchange have similarly risen to an all-time record of 172.50 per tonne or $230 per tonne.

Since these prices are free on board and exclusive of freight costs ($65-70 from Europe and $70-75 from the US in Panamax vessels), the landed cost of imported wheat in India would now be $290-300 per tonne. This is above the $263 per tonne rate that the State Trading Corporation of India (STC) had negotiated for 3.06 lt out of a 10 lt tender it had floated last month - which the Centre rejected on grounds of being too high. It is also way above the average weighted price of $205.31 a tonne at which STC had contracted 55 lt last year.

The latest hardening of prices has been triggered by the US Department of Agriculture's (USDA) projections of global year-ending wheat stocks falling to a 30-year-low of 112.02 million tonnes in 2007-08. This, in turn, is a reflection of drought in Ukraine and an abnormally hot and dry spring in Russia. Both these Black Sea countries are key suppliers of low cost, red wheat. Moreover, there are even concerns over damage to the crop in the US caused by excess precipitation in many parts.

"We may have to pay much more than the quotes received in the last (scrapped) tender," a Food Ministry official admitted. The only consolation though is the strong rupee. Given that a dollar now fetches about Rs 41.9, against Rs 44.5 till late last year, buying at $290 a tonne is equivalent to contracting previously at about $273.

More Stories on : Wheat | Commodity Markets

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

Stories in this Section
NMCE stake: BSE submits proposal to FMC

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line