November 20, 2006

 

Australia's AWB delivers 500,000 tonnes wheat to India

 

 

Australia's AWB Ltd has completed deliveries under the first of three contracts to supply wheat to India's State Trading Corp (STC). this year, a government official said Friday (Nov 17).

 

AWB has delivered 500,000 tonnes under the first contract, the official said.

 

From seven global companies, STC has purchased a total of 5.5 million tonnes of wheat on behalf of India's federal government in 2006. AWB is the single largest supplier by volume at 1.595 million tonnes, or 29 percent of the total imports.

 

"Deliveries of the first contract are complete, of the second for another 500,000 tonnes are very close to completion, and shipments under the third for 595,000 tonnes are currently underway," the official said.

 

AWB officials couldn't be immediately reached for comment.

 

There has been speculation in trading circles that deliveries to India may get delayed due to tight international supplies. But the government official said none of the wheat suppliers to STC has defaulted so far and deliveries are on schedule.

 

Yields from the new Australian wheat crop are forecast to be well below average following a severe drought in many growing areas. Sharply limiting export availability, output is expected to fall to barely 9.5 million tonnes from 25 million tonnes in the last crop year ended March 31, 2006.

 

Australia's average annual domestic consumption of wheat is around 5.5 million tonnes.

 

"So far there aren't any supply concerns because AWB is supplying wheat to India from the previous crop and not from their ongoing harvest hit by drought," the Indian government official said.

 

He said part of AWB's supplies to India is of optional origin and that the company has also shipped in French wheat. AWB has a trading arm in Europe known as AWB (Geneva) SA.

 

Deliveries under the first contract with AWB to supply 500,000 tonnes based on a tender issued in February were delayed by a few months over quality-related issues. The matter was even taken up for discussion at diplomatic levels.

 

But the deal has now been executed, the Indian government official said.

 

India has emerged as one of the world's largest importers of wheat so far in 2006, with purchases of at least 6.5 million tonnes including 1.0 million tonnes by private flour, bread and biscuit manufacturers.

 

India was a net exporter of wheat between 2000 and 2005.