STC seeks to buy 1.67 m tn of wheat

Mumbai, Aug 30 | Updated: Aug 31 2006, 05:30am hrs
India, the worlds second-biggest wheat consumer, invited bids for the purchase of 1.67 million metric tonne of the grain from overseas as domestic demand outpaces supply.

State Trading Corp (STC), a government-run company, will buy the grain, said an official involved in the tender process who didnt want to be identified. Suppliers have until September 5 to submit the bids, he added.

Wheat imports this year by India, also the worlds second-biggest wheat producer, may increase shipments by companies such as Cargill Inc, the worlds biggest agricultural company, and AWB Ltd, Australias monopoly wheat exporter. STC has already contracted for 3.83 million tonne of wheat imports this year.

India resumed wheat imports this year after a gap of six years. Imports may increase as rising incomes and higher economic growth in the worlds second-most populous country boost demand for biscuits, cakes and pastries, Vijay Iyengar, managing director of Singapore-based Agrocorp International Pte, said in e-mail on Tuesday.

An increase in wheat imports by India also means higher prices in countries such as the US, Russia and Canada.

Wheat futures on the Chicago Board of Trade have risen 18% since the beginning of the year. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date. Indias wheat production have reached 69.4 million tonne in the year ended June.

Bloomberg