May 30, 2007
India likely to award wheat import contracts from Toepfer, Glencore
India is seen to purchase around 300,000 tonnes of wheat to Toepfer and Glencore in five panamax vessels, a senior official at a trading firm said on Tuesday.
The volume will likely to remain as high prices quoted in a tender floated last month for one million tonnes, according to an Indian government official.
The grain should arrive by mid-August at Mundra as the western Indian port can accommodate large vessels, the official at the trading firm said.
The official, who did not what to be identified, said India is looking to buy two panamax vessels of wheat from Toepfer and three from Glencore.
Panamax vessels normally carry about 55,000 tonnes of wheat which is priced at around US$263 per tonne, 14 percent higher compared to what India has purchased in its 5.5 million tonnes imported in 2006.
Government-run State Trading Corporation (STC) last week received seven bids in the tender at between US$265.50 and US$296 per tonne-about a fifth more than what India paid last year. The official said STC will likely make its purchase at around 300,000 tonnes.
The official also added the government might call for more tenders to build a strong buffer to supplement requirements for the country's granaries.
The government official said India aims to buy 11 million tonnes wheat from domestic farmers against 9.2 million tonnes purchased last year. Authorities were interested in purchasing 15 million tonnes earlier but pulled back as farmers stockpiled grain in anticipation of higher prices.
India needs 12 million tonnes wheat annually to run its public distribution system for the poor.
The country grows only one wheat crop in a year, mainly in northern states of Punjab, Haryana, and Uttar Pradesh and central state of Madhya Pradesh.
Sowing starts in winter months of November and December and harvest begins in late March and early April. India is likely to produce 73.7 million tonnes wheat in 2007, against 69.48 million tonnes last year.
