June 5, 2006

 

India to buy 800,000 tonnes wheat at US$187-199/tonne

 

 

State Trading Corp (STC) of India has finalised deals to import 800,000 tonnes wheat from two global companies at US$187-199.2 a tonne, cost and freight, a senior company official said Friday (Jun 2).

 

"We will buy 500,000 tonnes wheat from Australia's AWB at US$187/tonne and 300,000 tonnes from Swiss company, Agrico Trade and Finance at three prices between US$198.2 and US$199.2 a tonne," the STC official told Dow Jones Newswires.

 

He said the entire delivery by AWB will be at the western Indian port of Mundra.

 

It was earlier reported that STC is likely to garner only 800,000 tonnes wheat from a tender to buy 3.0 million tonnes.

 

"The likely volumes purchased have been clear for around five days now but negotiations lingered over prices, delivery schedules, port of deliveries and discharge rate at ports," the official said.

 

He said Agrico Trade and Finance will deliver wheat of Russian origin on India's east coast. It will sell three lots of 100,000 tonnes each at US$198.2/tonne, US$198.7/tonne and US$199.2/tonne respectively in three months to September.

 

AWB plans to sell wheat at a comparatively cheaper rate because it will make deliveries at Mundra in large panamax vessels of up to 70,000 tonnes in four months to October.

 

The discharge rate, or rate of unloading cargoes at Mundra port will be 10,000 tonnes a day.

 

The deal is conditional to all the tender specifications being met by the two companies, the official said.

 

From an earlier tender floated in February, STC purchased 500,000 tonnes wheat from AWB, of which around 92,000 tonnes have already been delivered.

 

Earlier in the day, Food Minister Sharad Pawar said India has purchased 1.2 million tonnes from the two tenders. The STC official said the actual purchase is slightly higher at 1.3 milliion tonnes.

He said an additional 2.3 million tonnes are proposed to be imported by STC on behalf of the government and a third tender will be floated shortly.

 

The approval of India's federal cabinet has been sought to relax quality specifications for the third tender in the wake of the poor response to the second, he said.