September 6, 2007

India to buy wheat from Canada, Europe

India will import the bulk of 795,000 tonnes of wheat from Canada and Europe as bad weather threatens to shrink the Australian crop, trade officials said on Wednesday (September 5).

The Indian government on September 3 decided to purchase 740,000 tonnes of wheat from Glencore International of Switzerland and 50,000 tonnes from German firm Toepfer International. Singapore-based Starcom will provide 5,000 tonnes. A Toepfer official based in Mumbai said Toepfer will supply 50,000 tonnes of Canadian wheat and Glencore will provide both Canadian and European wheat.

India, the world's second-biggest wheat producer, imported 5.5 million tonnes of wheat in 2006, the first overseas purchases in six years, with most of the grain coming from Australia. The Toepfer official said he was expecting Australia to produce 25 million tonnes this year but drought has significantly cut production forecasts by 15 to 16 million tonnes.

Forecasts of a poor Australian crop have pushed prices up at the Chicago Board of Trade (CBOT) and in Europe, he said. CBOT December wheat rose 30 cents in electronic trading to an all-time high of $8.35-½ a bushel, while European milling wheat futures soared more than 5 percent to a record 300 euros a tonne for the benchmark November contract.

A government official said India would float more wheat import tenders despite high global prices. But opposition parties have criticised the government for its decision to import when world prices are scaling new peaks.