Govt scraps wheat import tender

The government today asked the State Trading Corporation (STC) to scrap its wheat import tender owing to high prices.

STC had floated a tender earlier this month to import 350,000 tonnes of wheat. International suppliers like Cargill, Glencore and Toepfer together offered to sell 315,000 tonnes of wheat at a price ranging between $459 and $579 a tonne.

In rupee terms, the price worked out to Rs 18,360-23,160 a tonne as against the current domestic price of around Rs 10,000 a tonne.

"There has been no direction to finalise purchase under the current tender from the government," said an STC official. The bids made by these international companies expired on Saturday.

The agriculture ministry has estimated the 2007-08 wheat output, to be harvested in March-April next year at 75.5 million tonnes, up from 74.89 million tonnes produced in 2006-07. Currently, the central pool has wheat stock of 7.66 million tonnes, excluding the 492,500 tonne contracted for import and about to arrive.

"Estimating a monthly offtake of 1.2 million tonnes for the next three months, the government is expected to have a stock of over 4.5 million tonnes on April 1 next year, well above the buffer stock norm of 4 million tonnes," said a government official.

In the last one-month, MMTC and PEC, the two other trading corporations, had together bought 492,500 tonnes wheat for the government. MMTC bought 342,500 tonnes at an average price of $400.19 a tonne while PEC purchased 150,000 tonnes at an average rate of $396.9 a tonne.

In the current year, the government had decided to import 2.3 million tonnes wheat. Of this, contracts of 1.79 million tonnes have been made.

Wheat imports, at rates significantly higher than domestic rates, have been a controversial issue this year, with the parties supporting the Union Progressive Alliance government at the Centre as well as those in the Opposition strongly criticising costly imports.

The Central Vigilance Commission, a statutory vigilance institution, had in September examined wheat import documents.