March 10, 2006

India to purchase wheat from AWB

AWB, Australia's wheat exporter, said Tuesday it would be supplying 500,000 tonnes of wheat to India's first purchase in six years.

The sale comes as Australia looks to sell its second-largest wheat crop on record.

India, the world's second-biggest wheat grower, said last month that it would buy 500,000 tonnes of wheat to fight rising prices and increase stockpiles, after having said that it might have lower than expected harvests because of dry weather in the main growing areas.

The country had forecasted production of 73.06 million tonnes of wheat in the harvest from March to April, Agriculture Secretary Radha Singh said last month, below the 76 million tonnes forecast in December. India produced 72 million tonnes of wheat last year.

AWB's offer to supply wheat at US$185 a tonne was accepted by the Indian government.

Wheat for delivery in May traded at US$3.8 a bushel, or about US$140 a tonne, in after hours trading on the Chicago Board of Trade.

Prices have risen 22 percent in the past three months amid concerns that dry weather would curb production in the United States, the largest exporter.