June 7, 2006

 

India's STC resolves wheat quality issue with AWB

 

 

State Trading Corp (STC) of India has resolved the quality issues over delayed wheat imports from Australia's AWB Ltd, a senior STC official said Tuesday (Jun 6).

 

The delayed shipments may resume shortly, the official said, but declined to give any timeframe for deliveries.

 

"The main issue has now been settled for the importation of 500,000 tonnes of wheat from AWB under the contract awarded in March," the official told Dow Jones Newswires.

 

"There are some minor hiccups, but we are hopeful they too will be ironed out and shipments will resume," the official said.

 

An AWB official when contacted declined to comment.

 

The official said the issue is mainly related to obtaining a certificate from Australian Quarantine and Inspection Service, or AQIS, that the India-bound wheat meets all the norms specified in the contract, including complete absence of ergot fungi.

 

"We cannot and we have not relaxed the norms, but we hope they will be able to meet the original specifications," said the official.

 

Once the cargoes arrive in India, they will pass through the routine quality inspections by port authorities.

 

STC is importing wheat on behalf of India's federal government. In March this year, STC awarded a 500,000-tonne contract to AWB for delivery in April and May.

 

Due to the delay, no cargo has been delivered after two shipments totalling around 92,000 tonnes landed in the south Indian ports of Chennai and Tuticorin.

 

The issue was also taken up at the government level when Australian High Commissioner to India, John McCarthy, discussed it with officials at India's federal food ministry.

 

The execution of the contract is running behind schedule.

 

All the consignments were to arrive at five south Indian ports--Mangalore, Chennai, Tuticorin, Visakhapatnam and Cochin--by mid-May.

 

Under the conditions of the tender, 250,000-300,000 tonnes of wheat is contracted to arrive by the end of April.

 

Earlier this week, Junior Minister for Food Akhilesh Prasad Singh said the remaining shipments are expected to arrive in four to five weeks.

 

Although under the tender to import 500,000 tonnes of wheat, it is mandatory that cargos be completely free of ergot fungi, the condition was relaxed in the subsequent 3-million-tonne tender, allowing up to 0.01 percent of grain with ergot fungi.

 

Under the second tender, AWB will supply another 500,000 tonnes for delivery by October to the western Indian port of Mundra. The deal has been contracted at US$187/tonne, on a cost-and-freight basis.