September 19, 2011

  

India's wheat exports to go to Bangladesh

 

 

The majority of Indian two million tonnes of wheat exports are expected to hit Bangladesh, according to traders, as the latter moves away from Black sea supplies amid competitive grain prices from India.

 

Last week, India allowed unrestricted exports of two million tonnes each of wheat and common rice, as the unmanageable level of the country's stocks forced the authorities to allow overseas sales.

 

India's move to allow wheat exports comes at a time of growing global supplies which are expected to pressure prices.

 

US wheat prices <Wc1> have slid more than 6% so far this month, weighed down by expectations of higher world production. The USDA this week raised its forecast for world wheat stocks by 5.7 million tonnes to 194.6 million tonnes.

 

"Bangladesh will be a major buyer of Indian wheat. The entire two million tonnes could be bought by Bangladesh," a buyer said in Dhaka.

 

"All buyers here are seeking deals with India for wheat."

 

He said his firm would buy 300,000-400,000 tonnes of wheat from India over the next six months.

 

"We are getting offers from Indian suppliers at around US$290 per tonne including cost and freight via Chittagong port, compared with Black sea wheat at US$315 a tonne," he said.

 

In case where wheat is coming in by road and rail, Indian prices are even lower, at US$265-285 a tonne, he added.

 

After India lifted its ban on overseas sales, wheat prices in warehouse levels in Bangladesh dropped by BDT2,700 (US$36) per tonne.

 

New Delhi-based Emmsons International was supplying a total of 100,000 tonnes of wheat and 100,000 tonnes of parboiled rice from India as it secured government's tenders recently.

 

Bangladesh, which buys 3-3.5 million tonnes of wheat a year, switched to cheaper Black Sea suppliers after India banned exports in 2007 amid a global shortage.

 

Bangladeshi wheat imports are increasing due to rising demand while domestic production is stagnated at around one million tonnes.

 

Currently, wheat stocks at government inventories stand at nearly 262,000 tonnes, with around 400,000 tonnes in private stockpiles.

 

On Friday, December Chicago wheat rose 0.6% to US$7.00-1/4 a bushel, after dropping to US$6.86 on Thursday (Sep 15), the lowest since August 9.

 

Bangladesh also buys smaller quantities of high-quality Australian and Canadian cargoes for blending.

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