October 1, 2012
India to offer three million tonnes of wheat to Iran
India is ready to offer up to three million tonnes of wheat to Iran as the latter is affected by strong economic sanctions.
An Indian delegation will be visiting Iran next week and it is expected that Tehran will finally place an order for wheat.
The price at which India may be offering wheat to Iran is still not known; there are only indications that the government may be offering to sell it at US$300 a tonne, the price at which it has exported wheat from its reserves in recent times. India lifted a four-year ban on wheat exports in September last year, and allowed export of two million tonnes from government warehouses this July.
If wheat export to Iran finally materialises, it would happen at a time when a section within the country is advocating the need for curbs on stockpiling of food crops by traders, as drought in the US and a bad monsoon at home have raised the spectre of a possible wheat shortage.
However, some analysts feel India should latch on to the opportunity, as more Asian countries are likely to turn to India, the second largest wheat grower in the world, as the spread between Indian cereal and US corn has grown to US$60 a tonne. They feel the prospects of Iran accepting Indian wheat are bright this time around.
Government-owned warehouses had a wheat stock of 47.5 million tonnes as of August, which was more than three times the official target of 17.1 million tonnes for the September quarter. The stock is expected to remain high due to a late revival in monsoon, which has raised the prospect of another bumper wheat harvest next year.
Some experts feel higher exports would help the government bring down its stock, and at the same time take advantage of the high global grain prices.
Wheat prices fall in the Delhi market on the last trading day of last week on the back of a drop in buying queries.
At Shahajahanpur and Kota markets too, wheat prices eased by INR8 (US$0.15) and INR30 (US$0.57) a quintal, respectively. The Kota market received 394 tonnes of wheat in last week's last session (down by 42 tonnes from previous day's volume).
"Higher stocks in the market will keep wheat prices in check till sowing perspectives get confirmed," brokerag,e Emkay Commotrade, said in report.
