The Hindu Business Line : Cargill, Glencore bag MMTC wheat tender

While Cargill has been allotted 1.80 lakh tonnes (lt), Glencore will supply 1.62 lt. Glencore will ship the cargo in three vessels all of which are expected to unload at Kandla, while Cargill will bring in the cargo in four vessels of which 3 will discharge at Mundra and one in Kandla.

The average price for the entire import, both suppliers combined, works out to $400.6 a tonne. All arrivals will have to be completed by February 10, 2008. It is believed that loading will commence soon.

Australia production

A strange part of the MMTC tender is that AWB, which participated, had offered to supply not Australian wheat, but wheat from the Black Sea region.

Admittedly, Australia has suffered a setback to its wheat crop. Production declined from 25 million tonnes (mt) in 2005-06 to a new low of 9.9 mt the following year. However, this year (2007-08), there is slight bounce back in crop size to 13 mt.

Australian wheat exports are projected to be of the order of 8 mt this year, down from 11 mt last year. With 8 mt of export surplus, it is reasonable to expect that AWB should have offered Australian wheat to India (a modest quantity of 3.5 lt), but instead chose to offer material from the Black Sea region.

‘reserved’ tag

There is reason to believe that the supplier country is not too keen to offer its own wheat to India. Australian wheat is ‘reserved’ for AWB’s traditional markets such as Japan and is not intended for an occasional buyer like India, Business Line learnt through a highly reliable sources closely associated with the global wheat business.

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