Govt plans more wheat export tenders to cash in on good price

Will likely sell a total of 2 million tonne of wheat in the overseas market

Buoyed by the strong response to its attempt to sell wheat from state-run warehouses, the government is planning to open a series of such export tenders in the months of January, February and March to sell a total of around 2 million tonne of wheat in the overseas market.

Tuesday, state-owned trading firms--State Trading Corporation(STC), Metals and Minerals Trading Corporation (MMTC) and PEC Ltd-- received bids in the range of $284.7-289.9 per tonne for shipment of 0.34 million tonne from the Food Corporation of India (FCI) godowns.

The highest quotations received by the three state trading firms were higher than the government's floor price of $260 per tonne for export of the FCI-procured wheat.

“In the subsequent tenders, the quantity offered will be more as we expect to get good price in coming months as well,” a senior government official said.

Government had to lower its base price for export of wheat from $300 per tonne to $260 per tonne after its attempt to export 0.15 million tonne of wheat was cancelled as the bids received were much lower than the base price.

“We were hoping to get a price of around $270-275 per tonne, but the price quoted (around $290 per tonne) is unexpected, which shows that Indian wheat has started commanding a premium in the international markets,” the official said.

He said the price received was even more than that quoted by Black Sea wheat, which is one of the most valuable wheat brands in the world market.

“In the coming months too, the trend is expected to be maintained because as per information the Australian wheat crop is not as good as expected, which will enable us to sell more in the overseas markets,” he added.

He said exporting wheat was more profitable for the government than selling it domestically as average global price of $285 per tonne will fetch Rs 18,000 for each tonne of wheat to the kitty, while the exchequer gets just Rs 16,000 per tonne in home market.

In 2012-13 fiscal, the government had earned $1.4 billion from export of 4.2 million tonne of wheat by PSUs. Indian wheat had fetched an average price of $311.38 per tonne last fiscal.

India is exporting wheat from state-run warehouses as consecutive years of bumper harvest have filled them to the brim.

According to FCI, wheat stocks in state godowns are estimated to be over 34 million tonne as on November 1 as against a requirement of just 14 million tonne.