05-Oct-2013
India's state trading companies received a poor response to their tenders to export wheat, raising doubts over the success of New Delhi's plan to ship out two million metric tons of wheat to help reduce the pressure on overflowing state granaries and raise $600 million for the government.
Three trading companies in mid-September floated tenders for the immediate shipment of 160,000 tons of wheat from the two million tons India's government wants to export.
They received nine bids. The highest bid at $267 a ton was way short of the government's minimum export target price of $300, according to company executives Friday.
The bids were on expected lines as prices have come down in the international market because of abundant supplies from major wheat-producing regions. Wheat comparable to the Indian variety, from Eastern Europe countries such as Russia and Ukraine, is available 20% cheaper than India's minimum export price, a New Delhi-based trader said.
"This kind of price bids were hardly a surprise. We expect this round to be canceled," said a Mumbai-based trader with an international commodity trading firm, which was among the bidders.
India had set the minimum export price a year-and-half ago.
It is likely to decide on future minimum price for exports based on the response to this tender offer, an official at state-run grain-procurement agency Food Corporation of India said.
India had emerged as one of the biggest wheat exporters over the past year-and-a-half following a global shortage. During this period, it sold 4.2 million tons of the grain at an average price of $311 a ton, about $10 above the cost it incurred for procuring it from farmers.
The strong run that India has enjoyed is beginning to wear thin. World wheat production in 2013-14 is projected at a record 708.9 million tons, according to a report from the U.S. Department of Agriculture.
Source:- online.wsj.com
No comments:
Post a Comment