The government will import 5.11 lakh tonne of wheat at prices ranging from $318 to $329 a tonne, paying at least $55 more a tonne than what April?s scrapped global tender had offered.
The Centre entrusted State Trading Corporation of India (STC) with this task on Tuesday.
Three global trading firms ?Alfred E Toepfer of Germany, Cargill of the US and Riaz Trading of Pakistan?would deliver the wheat at the Mundra port in Gujarat between September and October, STC officials said. Toepfer had offered to supply 2.5 lakh tonne, Cargill 1.75 lakh tonne and Riaz Trading 1.25 lakh tonnes at the time of bidding for an STC tender floated on behalf of the food ministry.
Apart from these three, four other global companies ? Glencore International AG of Germany, Concordia of the US, Louis Dreyfus of France and Agrilink Asia-Pacific of Singapore, had placed bids to supply a total of 9.2 lakh tonne of wheat in response to the 10-lakh-tonne tender.
This decision comes on the back of the Centre asking STC to cancel a previous tender to import 10 lakh tonne of wheat. This tender was floated in April with a negotiating price of $263, which was termed high by the Centre. The irony is, the present buffer stock situation has pushed India to pay at least $55 more for a tonne, as is evident from the current negotiating price in the second STC tender.
At the time of scrapping the previous tender, the food ministry had anticipated receiving cheaper bids, targeting as it were the EU, Australian and Black Sea region harvest. But, widening drought
in Russia and Ukraine, and an erratic weather in the US, jacked up global wheat prices to an 11-year high on the Chicago Board of Trade over the past one month, leading to increased spends on wheat imports by India.
India, which is importing wheat for the second year in a row despite being the world?s second-largest producer, consumes around 72 million tonne of the grain a year. It imported 5.5 million tonne of wheat in 2006 at an average price of $205 a tonne.
The country?s wheat production is estimated to touch 74 million tonne this year, higher than earlier estimates of 73.7 million tonne and the last year?s of 69.48 million tonne. The government, however, targets to import up to 5 million tonne this year to boost wheat?s buffer stock and meet the requirement for the public distribution system.
Despite the rise in prices, the government favours importing wheat to ensure adequate stocks. Against a target of 15 million tonne, FCI has so far been able to buy only about 11 million tonne. In April, FCI had a buffer stock of over 4 million tonne.