India may buy around 370,000 tonnes of wheat

Updated on May 28, 2007 05:16 PM IST
India is likely to buy around 370,000 tonne at about $263.50 per tonne, trade and government sources said on Monday.
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Reuters | ByBiman Mukherji and Mayank Bhardwaj, New Delhi

India, which last month floated a tender to import one million tonne of wheat, is likely to buy around 370,000 tonnes at about $263.50 per tonne, trade and government sources said on Monday.

Global trading firms Toepfer and Glencore — the two lowest bidders — will clinch the contracts, they said, adding that most of the grain would be delivered at the western port of Mundra.

India, the world's second-largest producer of wheat, received seven bids in the tender but at prices that were about 20 percent higher than last year.

Bidders, which included Cargill, quoted prices at between $265.50 and $296 per tonne. India had paid an average $230 per tonne for imports in 2006, when it was forced to tap global markets for 5.5 million tonnes.

"The two lowest bidders have cut their bid prices by about $2 a tonne," an official of an international grains trading firm said.

Both Toepfer of Germany and and Glencore of Switzerland were likely to supply equal quantities totalling 370,000 tonnes, the official said.

"We are not in a hurry as the government has sufficient stocks of wheat. We will buy only limited quantity from the lowest bidder," a government official said.

India's wheat buffer stocks were at 5 million tonnes on April 1 against a government norm of 4 million tonnes.

"The government may decide to issue another import tender only in July and August when wheat from countries like Canada reach international markets," the government official said.

India is likely to produce 73.7 million tonnes wheat in 2007, up from 69.48 million tonnes in 2006.

The country needs 12 million tonnes wheat annually to run a public distribution system and welfare schemes for the poor.

India, grows only one wheat crop a year, mainly in the northern states of Punjab, Haryana, and Uttar Pradesh and central state of Madhya Pradesh.

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