State trading entities – MMTC and PEC – have received improved response from global buyers for wheat tenders that were opened on Wednesday.

But the bids were lower than the ones fetched during December-January.

For the 80,000 tonnes offered from Kakinada port, MMTC has received highest bid of $281.05 a tonne, sources said.

This is higher than the floor price of $260 a tonne set by the Government.

MMTC has received a total of eight bids for the Kakinada tender and all the bids are higher than the floor price.

PEC has received the highest bid of $282.10 a tonne for the 70,000 tonnes of wheat offered from the Kandla Port on the West Coast.

The Government-owned agency received a total of nine bids for the latest tender all of which were higher than the floor price. The latest tenders were part of the Government’s plan to export two million tonnes of wheat from the Central pool stocks in the current financial year to make storage space for the new crop.

Black Sea crisis

Trade sources attributed the improved response to the volatile trend in global wheat prices following unrest in Ukraine and weather woes in the US.

Wheat shipments from the Black Sea region have slowed down considerably, following the Ukraine crisis.

Besides, the current not-so-favourable weather in India is also seen influencing the prices as the unseasonal rain in Punjab, Haryana and Uttar Pradesh are likely to delay the harvest.

However, the bids received are lower than Dubai-based Al Ghurair Group offer of $283.60 a tonne for 25,000 tonnes on January 10. Swiss firm Glencore had then offered $282.69 for 55,000 tonnes.

So far, the highest bid for export tenders has been $287.10 by Thailand-based Phoenix Commodities for the 35,000 tonnes of wheat offered by PEC Ltd from Vizag port.

Bids for export tenders have been higher than the floor price of $260 a tonne ever since the Centre cut it from the initial $300 on October 31.

Though the Government has projected a wheat crop size of 95.6 million tonnes(mt) this year, unseasonal rain accompanied by hailstorm across the key growing regions of Madhya Pradesh, Rajasthan, Maharashtra and Haryana in the recent days have impacted the standing crop and may affect the yields.

Crop loss

In Madhya Pradesh, where the crop was almost ready for harvest, hailstorm has shrunk the crop size by about 20 lakh tonnes, according to the State Government estimates.

The crop losses in the other States are yet to be quantified.

Wheat stocks in the Central pool stood at 24.2 mt as on February 1, more than twice the buffer and strategic reserve norm. Wheat exports in the current fiscal are estimated to touch about 5 mt from both the private and public stocks.

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