Wheat imports to cost more

To be 20 per cent higher; govt floats tender to import 1 million tonne.

The average wheat import price this year is likely to be 20 per cent higher at $250 a tonne compared with $206.38 in the previous year. The government, which had last year imported 5.5 million tonnes, floated a tender on Monday to import 1 million tonne.

Wheat at $240-250 a tonne is available only from Pakistan because of lower freights, while imports from Russia and Canada may cost over $260 a tonne, according to an industry source.

"Ultimately, the average landed cost would be well above $250 a tonne (around Rs 10,500), if the entire 1 million tonne is imported. Had the government asked for shipments after August, the prices would have been as low as $230-235 a tonne as Russian and Ukrainian wheat hit the market around that time," the source said.

"At the recent Food Corporation of India's (FCI) wheat purchase tender, one of the exporters reportedly quoted as high as $300 a tonne. Right now, only Pakistan can offer wheat to India at $240 a tonne.

However, the quantity may not be large. Imports from elsewhere may cost anything over $280 a tonne," said Atul Chaturvedi, president, agro division, Adani Exports.

"The companies that exported wheat to India last year were not paid demurrage. Such companies will try to adjust the demurrage in the fresh offers. This may also add to the offer price," said an executive of an international company that sold wheat to India last year.

This year, the FCI has so far procured 8 million tonnes compared with the last year's corresponding procurement of 8.8 million tonnes. The corporation had set a target of 15 million tonnes this year against 9.3 million tonnes last year.

However, industry watchers see the procurement to be in the range of 11-12 million tonnes.

This year, the FCI has so far procured 8 million tonnes compared with the last year's corresponding procurement of 8.8 million tonnes.

The corporation had set a target of 15 million tonnes this year against 9.3 million tonnes last year. However, industry watchers see the procurement to be in the range of 11-12 million tonnes. This implies that the government may end up importing 3-4 million tonnes to meet its public distribution system requirements.

State Trading Corporation had on Monday floated a tender for importing 1 million tonne of wheat. The tender will open on May 10 and offers should be valid till May 18. The tender seeks deliveries between May and July.