Govt cancels wheat tender, says prices too high

New Delhi, May 30 | Updated: May 31 2007, 05:30am hrs
The government on Wednesday cancelled the tender floated by the State Trading Corporation of India (STC) for import of one million tonne wheat and said the prices quoted by bidders were too high.

The government had earlier decided to import one million tonne wheat to build up its buffer stock and the STC floated a global tender on April 30, this year for import of the same quantity.

The bids which were opened on May 21 found seven suppliers in the fray Cargill, Glencore International AG and Alfred E Toepfer International of Germany, Adani Global, Adani India on behalf of Archer Daniels Midlands of US, Rayas Trading and Concordia.

The bidders agreed to supply over one million tonne wheat in total. They quoted prices in the range of $267-302 per tonne on cost & freight (C&F) basis. Majority of the bidders quoted prices around $296 a tonne.

The STC, after assessing the bids against quarantine norms, had recommended import of only 306,000 tonne wheat against a price of $ 263 a tonne, which included 180,000 tonne by Glencore and 106,000 tonne by Toepfer.

We had found only 306,000 tonne wheat suitable for imports, after assessing against quarantine norms and had recommended to the Union food ministry, said a senior official in the STC.

Union food ministry which placed the orders for imports through STC found the price quoted at $ 263 a tonne too high. The price quoted is too high. If we import at this price the economic cost would be much higher than that of wheat procured from the farmers in the country.

Already an interested party has filed a writ petition in the Supreme Court against the government for importing wheat last year at price higher than the minimum support price for wheat, said a senior official in the food ministry.

According to food ministry sources, government would wait for the global prices to soften before floating a fresh tender for import.

Governments procurement of wheat from farmers has proceeded well this year. Out of the total procurement target of 15.1 million tonne, 10.4 million tonne has been purchased from farmers as per data available till Tuesday.

Buoyed by the trend, the government has decided to extend the period for wheat procurement in Punjab and Haryana till June 15 and has offered a bonus of Rs 100 per tonne over and above the minimum support price.