The Hindu Business Line : STC floats tender to import 4 lakh t wheat

More to come
Tender to close on August 3. Seeks delivery during September-October. To be delivered at Chennai, Tuticorin, Visakhapatnam and Kochi.

Chennai , July 27

Catching the market by surprise, the Union Government on Thursday floated a tender to import four-lakh tonnes of wheat. The State Trading Corporation (STC) will buy it on behalf of the Centre.

The four-lt wheat is in addition to the 35-lakh tonnes of wheat contracted by STC on behalf of the Centre and the tender closes on August 3.

Rumours

"We are surprised with the tender. On Wednesday, there were rumours and on Thursday, STC comes out with the tender," sources in the milling industry said. "This could mean that the Centre expects more shortage in wheat," they said.

The tender had a marginal impact on wheat futures but the milling industry sources said the futures market was no more relevant to the stock situation.

Futures & spot

On the National Commodity and Derivatives Exchange Ltd , wheat for August delivery declined to Rs 844 a quintal from Rs 850. The fall in wheat for December delivery was even less with rates declining to Rs 936.40 from Rs 940.80. The December futures, which at one point of time were seen as the one holding direction for the market behaviour and ruled over Rs 1,000, have shown a declining trend since the Centre decided to import 30 lt of wheat during April-May.

Spot prices, on the other hand, have tended to rise since the beginning of the month. On Thursday, wheat dara was quoted at Rs 880.50 a quintal in New Delhi, up from Rs 862.50 at the beginning of this month. On Tuesday, however, the prices ruled at Rs 882.50.

Of the 35-lt contracted for export by STC earlier, only 92,000 tonnes have arrived. On Tuesday, the Centre said another 76,000 tonnes of wheat was expected to land in the country within a week from Australia, while two ships carrying 65,000 tonnes each were also on their way to Mundra port.

Relaxed norms

In the current tender, the quality specifications are the same the Centre fixed for import of 22 lakh tonnes last month. In that, the Centre bypassed the Plant Quarantine Order, raised the tolerance limits for various weeds, doing away with fumigation norms.

The current tender seeks delivery during September-October and of the total four lt, 1.25 lt each will have to be delivered at Chennai and Visakhapatnam respectively. The rest will have to be delivered at Kochi and Tuticorin (75,000 each). The STC has said it would have the privilege of raising or cutting the quantities to be delivered at the stipulated port at the time of finalisation of the contract. Prices will have to be quoted on c&f basis. According to milling industry sources, the Centre could have opted for two other things. One, allow imports by private parties at zero Customs duty and two, float a domestic tender.

Tender timing

The tender also comes in at a time when global wheat prices are hardening on hot weather and lower yields in Europe. The International Grains Council has projected global production to be 1.5 per cent lower than last month's 605 mt. Last year's production has been seen at 617 mt.

Domestic wheat production has also undergone drastic revision. Initially, the Agriculture Ministry estimated it at 75.5 mt before pruning it to 69.48 mt.

More Stories on : Wheat | Exports & Imports

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

Stories in this Section
Rumours create panic in commodity markets

Nabard: Cultivating the farm sector with credit

Govt hikes paddy MSP by Rs 10 a quintal

Branding: Buzzword for rice biz

STC floats tender to import 4 lakh t wheat

Rainfall deficit remains at 14 pc

New attempts

Arecanut growers seek regulatory mechanism

Spot rubber prices recover

12-week low volume at Coonoor tea sales

Bears pull down pepper futures

FMC warns open interest limit violators