May 23, 2006

 

India will not alter norms for Australian wheat imports

 

 

State Trading Corp of India (STC) would not make any concessions in its original contract specifications for the importation of 500,000 tonnes of wheat from Australia, STC's Managing Director Arvind Pandalai said Monday (May 22).

 

STC is importing wheat on behalf of India's federal government and in March this year it awarded a 500,000-tonne contract to Australia's AWB for delivery by mid-May.

 

No cargo has been delivered after two shipments totalling 92,000 tonnes landed in south Indian ports of Chennai and Tuticorin due to a delay over certification by Australian Quarantine and Inspection Service (AQIS) that the India-bound wheat meets all norms specified in the contract including complete absence of ergot fungi.

 

"There is no way we will change the terms of the contract, for us it is a closed issue now," Pandalai told reporters.

 

He said AWB will have to supply wheat in line with the specifications already made in the 500,000-tonne supply contract.

 

While in the earlier tender to import 500,000 tonnes wheat, it was mandatory that cargoes be completely free of ergot fungi, the condition was relaxed in the subsequent 3.0-million-tonne tender, allowing up to 0.01 percent of grain with ergot.

 

Pandalai said AWB still has time till the end of the month to fulfil the contract.

 

Asked about what action STC might take if the deadline expires without shipments being made, Pandalai said, "there are clauses in such international contracts like penalties".

 

Under the tender issued by STC in February to import 500,000 tonnes of wheat, once the bid is finalised, the supplier would have to submit a performance bank guarantee equivalent to 5 percent of the value of the contract, valid up to May 31, 2006.

 

Earlier this month, STC issued another tender to import 3.0 million tonnes wheat in which AWB has emerged as the single largest bidder in terms of volumes offered at 1.2 million tonnes.

 

"The technical evaluation of bids received in the 3.0-million-tonne tender is still going on, it's not complete and will take a few more days," Pandalai said.