India, currently a big wheat seller in the global market, could gain from the firm trend in prices of the cereal, triggered by the concerns over severe cold snap affecting the US crop and large purchases made by African countries
State trading entities – MMTC, STC and PEC Ltd – have offered to sell a total of nearly 8.3 lakh tonnes of wheat. Tenders for the sales expected to be decided over the next 17 days.
“India should exploit the current situation to get the maximum price for its wheat. There is a case for upward revision of the floor price for exports,” said trade sources.
India had set minimum export price of $260 a tonne but has received higher quotes from global buyers for tenders floated recently. So far, about 9 lakh tonnes of wheat have been tendered for sale, but sales of about six lakh tones only have been finalised.
The Government has planned to export about 20 lakh tonnes to create storage space for the new crop expected to arrive in April. The country’s wheat stocks as on December 1 stood at 31 million tonnes, almost thrice the buffer and strategic reserves to be maintained statutorily.
The firm trend in global prices is also aided by the aggressive buying from African nations such as Egypt and Algeria last week. Egypt has bought 5.35 lakh tonnes from Ukraine, Russia and France at an average price of $317 a tonne.
Algeria has bought about 5 lakh tonnes, while Syria has bought about two lakh tonnes.
“Going by the recent market trends India should get better price for its wheat. The intrinsic value of the Indian wheat is $290-300 a tonne – a price at which India should be selling,” an analyst said.
Wheat futures, which rallied to a two week high on the Chicago Board of Trade on concerns of crops damage in the US winter crop, eased a bit on Tuesday on signs of slack demand.
Wheat acreage in the current rabi season has touched a record 302 lakh hectares, raising expectation of a bumper harvest of over 95 million tonnes. Prevailing cold conditions across the wheat growing regions of North India are seen aiding the crop.
Source:- thehindubusinessline.com
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