Bread and cookie makers in India, the second-biggest wheat producer, may stop buying from Australia and Ukraine as global prices surged to a 23-month high after a heat wave slashed the harvest in Russia.
Flour mills, which planned to import 300,000 tonnes in the year ending March 31, will source part their requirement from the local market, M K Dattaraj, former president of the Roller Flour Millers Federation of India, said in an interview.
Millers in southern states that rely on supplies from producing states in central and northern regions bought about 50,000 tonnes of Australian prime wheat in the three months ended June 30 through ports in Tuticorin and Kochi as the grain was $20 cheaper than the local equivalent, Dattaraj said. The same wheat is $50 more expensive now, making it unprofitable for Indian processors, he said.
“International prices have gone up so much, now there is no parity at all,” Dattaraj said today. “It’s not possible at all to import now.”
Wheat has advanced 34 per cent this year as a heat wave in Russia, dry weather in Kazakhstan, Ukraine and the European Union and flooding in Canada hurt crops. Russia banned grain exports from August 15 to the end of this year amid the most severe drought in at least 50 years.
Domestic boost
Increased purchases by flour mills in the local market may boost domestic prices. Wheat for August delivery has fallen 5 per cent from a six-month peak on June 12 on the National Commodity and Derivatives Exchange. India in June said it will sell 5 million tonnes in the open market to cool prices.
“If demand comes suddenly, traders may raise the price,” said R K Garg, president of Roller Flour Millers Federation of India. The price gain will be marginal as India has enough stocks, he said.
