Business Daily from THE HINDU group of publications
Friday, Aug 24, 2007
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Business Daily from THE HINDU group of publications Friday, Aug 24, 2007 ePaper |
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Agri-Biz & Commodities
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Wheat Industry & Economy - Exports & Imports STC issues new wheat import tender
Our Bureau New Delhi, Aug 23 The State Trading Corporation of India (STC) on Thursday floated a tender to import an unspecified quantity of wheat on Government account to be delivered between October and December. Global prices
The move comes at a time when global prices have surged to all-time-highs, raising the possibility of the Centre shelling out well over $400 a tonne in the event of imports being contracted at current rates. STC’s latest tender, unlike previous ones that were for specified quantities, seeks bidders to offer the “maximum quantity of wheat” on a port-wise basis for each of the three months. Further, the shipments can be in both bulk vessel loads as well as in containerised cargo. The parcel size has been set at 25,000-75,000 tonnes for Mundra and at 25,000-50,000 tonnes for the other seven designated ports of Kakinada, Kandla, Mumbai, Chennai, Visakhapatnam, Tuticorin and Kochi. Closing date
The tender closes on August 29, with the offers being valid till September 9. The timing of the latest tender is significant, considering that the benchmark December wheat futures contract at the Chicago Board of Trade (CBOT) is currently quoting at a record $7.43 a bushel or $273 a tonne (one bushel equals 27.216 kg). Likewise, November milling wheat at the Euronext.liffe exchange has crossed 235 euros or $317 a tonne. Even the less-preferred wheat of Russian origin is hovering at well over $300 a tonne free-on-board (f.o.b.), while the rates are $285-290 for Canada. To put these prices in perspective, it may be noted that when STC’s last import tender was issued on June 26, CBOT rates were ruling at $6 a bushel ($220 a tonne), while Russian wheat was being offered for $235 a tonne (f.o.b.). In other words, world prices have shot up by $50-65 a tonne since the last tender. Freight costs
On top of these, the freight costs from Russia and France work out to $60-65 a tonne, and $80 from the US. Hauling Canadian wheat will cost $80-85 a tonne in Panamax vessels and up to $100 a tonne in smaller Handymax ships. “If you add all other costs (including risk premium on STC/Government tenders, arising from demurrage costs and other charges that are not compensated), the landed cost of imported wheat this time will be $400 plus or Rs 16,000 a tonne at port,” said Mr S. Pramod Kumar, Executive Director of the Bangalore-based Sunil Agro Foods Ltd. Domestic prices
This would be way above the average price of $325.59 a tonne contracted in the last tender and even more compared to the earlier ones. Domestic prices, on the other hand, are ruling much lower, with wheat dara in Delhi quoting at Rs 10,060-10,080. Mills in the South are also able to source wheat at Rs 12,000-12,300 a tonne in their godowns.
Related Stories: STC floats tender to import 10 l tonnes wheat Global wheat prices may come under pressure on STC move STC floats wheat import tender for 10 lakh tonnes STC wheat import tender: Bidders quote $267-302/t More Stories on : Wheat | Exports & Imports
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