India may sell wheat to Glencore

India plans to sell 98,000 tonnes of wheat to Glencore International for export, as the country, the world’s second-largest grower, seeks to cut record state inventories, said two government officials.

The cabinet is set to allow the State Trading Corp (STC) next week to sell 38,000 tonnes at $230 a tonne and 60,000 tonnes at $228 a tonne, said the officials, who declined to be identified because the plan is private. The price is less than the Rs 18,220 ($328) a tonne cost to the government of buying and storing the grain, they said.

India is seeking to cut reserves held by the state-owned Food Corporation of India (FCI) to create room for a sixth year of record harvests. Production will be 90.2 million tonnes in the year ending June 30, the Agriculture Ministry said. The country scrapped a four-year ban on exports by private traders in September.

“Global prices are expected to plunge with exports from India and commencement of Russia’s new crop from July,” said T P S Narang, an adviser at the New Delhi-based Emmsons International, a grain exporter.

Wheat for July delivery rose 0.8 per cent to $6.18 a bushel on the Chicago Board of Trade by 4:55 pm Mumbai time. Futures have fallen 16 per cent since September 8, when India ended the ban on shipments.

N C Joshi, a spokesman for the Food Ministry here, and Pravin Dongre, chief executive officer of Glencore Grain India Pvt, declined to comment.