Imported wheat arrival to be delayed, prices to go down

Owing to delay in the tendering process for the appointment of stevedoring clearance, handling and transport contractors at Chennai and Tuticorin ports, arrival of five lakh tonnes of imported wheat will begin only in the last week of April.

Tendering process closes on April 21 and 22.

After the Union government's decision to import wheat, State Trading Corporation had issued a tender for import of 5 lakh tonnes of wheat at 5 southern ports on February 9. This tender, awarded to AWB India last week, had envisaged that imported wheat would land between March and mid-May 2006, with at least 2.5-3 lakh tonnes coming in April.

Food Corporation of India's South Zone office has issued these two tenders on March 9. However, similar tenders for Kakinada, Vishakapatnam and Mangalore ports are yet to be issued.

"Unless the clearing agents and transport contractors are appointed by FCI, getting a vessel from Australia to Indian ports does not make sense. The vessel would then be parked at the port unnecessarily. Also, wheat is transported in bulk and thus, cannot be offloaded without the help of contractors," said an official of AWB India.

Market players suggest that if imports take place after the third week of April, it may pull down domestic wheat prices. Wheat arrivals are expected to be in full swing from the second week of April.

They, however, add that India 's requirement for wheat in the next marketing year starting April will remain unfulfilled with just 5 lakh tonnes of import.

"India may require to import about 5-6 lakh tonnes next year despite a crop of 73 million tonnes, as per the government estimates," said said Anirudh Agarwal of Agra Roller Flour Mills, one of country's largest millers holding a capacity of 10,000 silos. On Friday, spot wheat prices (ex-Delhi) were about Rs 880-900 per 100 kg. Prices are expected to hover about Rs 800 per 100 kg in the second week of April.

STC tender for import of 5 lakh tonnes of wheat has been awarded to AWB India last week at $ 179 a tonne.

The decision to import wheat was taken by the Union government to curb price rise.