June 21, 2006

India gets 8 bidders for new wheat tender

India's decision to ease quality specifications in its second wheat import tender has drawn bidders offering total volumes exceeding the tendered 2.2 million tonnes.

After a disappointing response to previous tenders, New Delhi relaxed several quality criteria for wheat and received offers for about 3 million tonnes when the bids were opened on Tuesday (Jun 20).

Bid prices ranged between US$190 and US$237 per tonne, cost and freight, traders said.

India relaxed restrictions on moisture content, fumigation and fungi and pests after managing to secure only 800,000 tonnes of wheat from a 3-million-tonne tender in May.

International trading firms Glencore, Bunge, Cargill, Concordia, Toepfer, Noble Grains, Teutonne and ADM were among the bidders.

US wheat companies and Australia's AWB were notably absent from the list. AWB supplied the bulk of wheat in previous tender, thus leading to speculations that the bulk of the wheat offered would be of EU or Canadian origin.

AWB has been locked in negotiations with Indian officials after Indian complaints arose from pesticide content.

Traders say the higher prices offered may deter the government from buying the entire lot offered and would probably limit its purchase to 1.5 million tonnes.

The wheat imports would not curb domestic prices as they were meant to replenish government stocks.