US may not bid for wheat tender

The US wheat suppliers may not bid for a tender by India seeking 1 million tonnes of the grain because the countries haven't resolved differences over import quality standards, a US growers' group said.

"Discussions are continuing but the potential for US exporters to participate in India's tender looks dim," Mark Samson, vice president for South Asia at the US Wheat Associates, said in an e-mail to Bloomberg.

A failure to resolve the differences may limit India's choice of suppliers at a time when global wheat prices have reached a record. Ukraine, the eighth-largest supplier, has curbed exports until September because of damage to crops and Pakistan said June 21 a ban on overseas shipments will stay until prices fall, worsening a global shortage.

"By excluding the US from its market, India decreases competition, which significantly raises the cost of imported wheat and translates into higher flour prices for Indian consumers," the US embassy said in a statement on June 7.

Prices on Thursday reached $6.4025, the highest ever for the most-active contract. India invited bids on June 26 for 1 million tonnes of the grain for delivery between August and November. Bidders have until July 4 to submit offers.

Food Secretary T Nanda Kumar said June 4 that the differences over quality norms were a "minor issue" and would be resolved soon. He was not available for a comment. US grain suppliers are reluctant to clean wheat of the weeds to meet Indian norms because of the costs, Samson said. Alternatives proposed by units of the US Agriculture Department were rejected by a team of Indian farm ministry officials last month, he said. "There has been no change in either country's position regarding the weed seed situation," he said.

India is buying wheat for a second year to build reserves and may import as much as 5 million tonnes this year, Agriculture Minister Sharad Pawar has said. Purchases totaled 6.5 million tonnes last year.

The US-based Cargill bought wheat from other countries last year to supply India after the South Asian nation barred cargoes with weed seeds, Samson said. The country may produce more than 73.7 million tonnes this year, according to the farm ministry. This may not be enough to cover demand, which a Bloomberg survey in April forecast would reach 75.5 million tonnes, as rising incomes stoke consumption of wheat products, including breakfast cereals and biscuits.