Govt eyes bumper bidding for wheat stock in second round

Written by fe Bureau | New Delhi | Updated: Nov 30 2013, 09:31am hrs
After the encouraging response to the Food Corporation of Indias (FCI) wheat export stock in the first round of bids held earlier this month, the government is confident of bagging better prices in the next round scheduled for December. Bids for 2.7 lakh tonne of wheat exports in the second phase would be opened on December 12 and 16, respectively.

A food ministry official told FE that bids for wheat exports of 1.2 lakh tonne from Kandla (Gujarat), 35,000 tonne from Visakhapatnam (Andhra Pradesh) and 55,000 tonne from Pipavav (Gujarat) ports would be opened on December 12 and bids for 70,000 tonne of grain from Krishnapatnam (Andhra Pradesh) would be held by December 16.

The trading agencies PEC, STC and MMTC had invited bids for 3.4 lakh tonne of wheat to be exported from the Mudra, Kandla, Krishnapatnam and Kakinada ports in the first phase, for which the government got a price range of $280 to $290 a tonne, above the base price of $260 a tonne earlier this month.

We are confident of getting bids in excess of $280 a tonne in the second round of tender, the food ministry official said.

In October, the government had rejected bids received for exports of 1.5 lakh tonne of wheat as it was far below the then base price of $300 a tonne.

Subsequently, the government reduced the base price for exports to $260 a tonne.

FCI can export two million tonne (mt) of wheat till June 31, 2014, instead of March 31.

At the start of November, FCI had a wheat stock of 34 mt, far above the strategic reserve and buffer stocks norms. An agriculture ministry official said due to good rainfall, there is an expectation of a bumper crop in winter that will be harvested in April.

Last year, due to a global shortage, FCI had exported 4.5 mt of wheat and realised R7,000 crore at an average price of about $310 a tonne.

Our export realisation cant match last years level because of a sharp rise in global wheat output this year, a commerce ministry official said.

Major destinations for Indian wheat last fiscal were South Korea, Ethiopia, Bangladesh, Yemen, Thailand and Indonesia. More than one million tonne of wheat was exported to South Korea.

We need to liquidate wheat stocks through exports and through open market sale scheme for private traders and exports, for creating space for next years crop, a food ministry official said.