May 28, 2004

India Loses Grain Export Order To Australia

India has lost out to Australia for the supply of 100,000 tonnes of grain to West Asia, with cost coming into play as the deciding factor.

With the government unable to evolve a scheme for the reimbursement of World Trade Organization compatible expenses, it is expected that India will be unable to compete in tenders for another 200,000 tonnes to be floated in the next few weeks in Bahrain, Qatar, Oman and East Africa.

"In last 10 days we have been outbid in two tenders of 50,000 tonnes each floated in west Asia for import of wheat. Government must give concessions for export ... to ensure our presence in the market," said D P Singh, chairman of the All India Grain Exporters Association.

Emirates Flour Mills, Abu Dabhi and National Flour Mills Dubai had sought to buy 50,000 tonnes each. Australian wheat, at around US$191 a tonne, outpriced the Indian quotations in terms of cost, insurance and freight (CIF).

A number of Indian exporters seeking to sell to the mills quoted over $200 a tonne, thus losing out in the export market.

Singh, whose company Sara International is one of the bidders, said Indian wheat was outpriced by at least $15 a tonne vis-a-vis Australia in international trade.

He said it cost the exporters Rs 7,600 a tonne, for wheat delivered at Kandla port in the western state of Gujarat. This works out to be around $169 a tonne. After factoring in the handling and loading charges, the price comes to $182 a tonne. A margin of one dollar and $20 freight to West Asia leads to a price of $203 a tonne, for CIF.