Market Reports: India to consider allowing extra wheat exports on June 24, 2013
India could add another 2 million tonnes of wheat for export in a successful
tender scheme as private traders shun more expensive direct sales,
bringing the total offered to 6.5 million tonnes.
The decision, which could dampen global prices further and help the
world's second-biggest wheat producer cut swollen stocks, may come at a
cabinet meeting , Food Minister K.V. Thomas told Reuters on
India's wheat stocks, built up to back welfare programmes to give cheap
food to the poor, hit 44 million tonnes on June 1, about a quarter of global
totals. As the monsoon starts, these are more at risk to rain as well as
"We had allowed exports of 4.5 million tonnes and almost the entire
quantity has been shipped out, and now we are considering allowing
another 2 million tonnes with same floor price of $300 per tonne," Thomas
Three state-owned companies - PEC, State Trading Corp. and MMTC Ltd -
have sold the grain via tenders, with the last round offering a total 290,000
tonnes this week. They would also sell the extra 2 million tonnes.
India has offered another 5 million tonnes of wheat direct to private traders
but no deals have been done here because the floor price is considered
unattractive, given the extra transportation costs.
There are also quality constraints as India's wheat is used to make flat
breads, unlike the high-protein U.S. soft white wheat which Japan and
South Korea prefer. Most of India's wheat goes to Middle East and African
Extra supplies could nevertheless dampen global prices further. The
benchmark CBOT price continues to trade not far from 2013 lows even
though worries that wet weather would delay the U.S. winter harvest have
edged levels higher this week.
Chicago Board of Trade July wheat rose 0.66 percent to $6.85 a bushel by
0324 GMT, having closed little changed in the previous session.
The cabinet will also consider selling 10 million tonnes of wheat to
domestic bulk buyers and to states for distribution to the poor, Thomas
said. This would be priced at 15,000 rupees per tonne, down from $300 for
a previous sale of 6.5 million tonnes.
But Thomas dashed any hopes the export floor would be lowered. ………
"We have been successful in exporting about 4.5 million tonnes of wheat
despite the fact that our wheat is slightly expensive. This shows that our
wheat is gradually gaining acceptance globally," Thomas said.
"We have been able to convince foreign buyers that our wheat is fit for
human consumption," he added.
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