May 7, 2007

 

India extends deadline for one million tonne wheat import tender

 

 

India extended on Saturday (May 5) the deadline for receiving sale offers under a tender to import up to 1 million tonnes wheat, to enable wider participation among suppliers and greater price competitiveness.

 

"Bids will now be received until around May 21 and offers should be valid till around May 30," a senior government official said.

 

He said instead of May-July, India now plans to seek wheat for shipment between June and Aug 15 to coincide with harvest in several countries in Europe and those near the Black Sea.

 

Earlier, the tender, issued on behalf of the government by State Trading Corp, was to close on May 10 and sale offers to be made by suppliers were to be valid until May 21.

 

"The import tender issued last week aimed to mainly put a psychological pressure on farmers not to hold back their wheat and sell stocks to the government at the earliest," the official said.

 

The market arrivals of locally harvested wheat did increase to a small extent after the import tender was issued, he said, and the government is keen to monitor the domestic situation till the end of the month before making any definite import commitments.

 

Wheat purchases in 2007 by India's federal government from farmers are estimated at 8.55 million tonnes as of Friday, down 5.1 percent from 9.01 million tonnes a year earlier.

 

"Wheat procurement for this year has today crossed 8.5 million tonnes and government is optimistic that total buys will eventually cross 10 million tonnes," said Junior Minister for Food Akhilesh Prasad Singh on Friday.

 

Singh said procurement of wheat from farmers is still continuing and the volume of imports in 2007 will eventually depend on local purchases.

 

The government official said it is also anticipated that extension of deadline for submitting offers for the tender may induce greater participation and ease the price quotes for wheat.

 

He said the lag in local purchases of wheat compared with last year has already begun to narrow.

 

In India, wheat imports depend on the size of the government's local wheat purchases from farmers. Last year, a shortfall in local procurement led to wheat imports of 5.5 million tonnes by the government.

 

The government purchases wheat from farmers at the set intervention price and sells it to consumers at subsidised rates.