India's wheat imports in the year to June 2017 have risen above 1 million tonnes with mills stepping up purchases from Ukraine as the cost of imported wheat falls below domestic prices.
India’s wheat imports in the year to June 2017 have risen above 1 million tonnes with mills stepping up purchases from Ukraine as the cost of imported wheat falls below domestic prices.
Traders have booked close to 150,000 of Ukrainian wheat since the beginning of last week for shipment mainly in October at about $192-$193 a tonne, including cost and freight, two trade sources said.
This includes purchases of 76,000 reported on Tuesday.
“Imported wheat is much cheaper even if you include duty and other costs,” said one New Delhi-based trader with an international trading company. “Earlier, southern Indian mills were shipping it but now traders are bringing in wheat through Mumbai and Visakhapatnam ports as well.”
Imported wheat from Ukraine will cost millers about 19,000 rupees ($285) a tonne after taking into account import tariff and inland transport to the processing plants. This compares with government’s sale price of around 21,000 rupees.
“We expect more deals as Indian mills are active now,” said one Singapore trader who is supplying wheat to Indian mills.
Since June, the country has purchased about 700,000 tonnes from Australia, and deals signed with Ukraine have reached close to 350,000 to 400,000 tonnes, traders said.
Wheat traders and industry representatives in India expect the country to step up international purchases significantly over the coming months.
Traders expect the country to buy close to 5 million tonnes in 2016/17.
Global wheat prices are hovering close to a 10-year low of $3.86-3/4 a bushel, set at August-end, and Indian purchases are expected to provide a floor under the market.