India to float global tenders for wheat exports soon

State-run trading firms such as MMTC, STC and PEC are expected to soon start floating tenders for export of about 1.5 lakh tonnes of wheat stored by the Food Corporation of India.

The move, coming at a time when global prices of wheat are at a low, is aimed at testing the market for the proposed sale of 2 million tonnes of wheat by FCI in the current financial year.

The government had fixed a floor price of $300 per tonne against the prevailing global prices that are 30 per cent below for wheat of comparable quality from countries such as Ukraine and Russia.

Milling variety wheat of Black Sea origin is quoting at $240 a tonne free-on-board while wheat for feed purpose is quoting at $230 a tonne.

The cabinet committee on economic affairs (CCEA) had, last month, cleared export of two million tonnes of wheat from the central pool.

Wheat stored in FCI godowns in Kakinada, Mundra and Kandla ports will be shipped out by March 2014, official sources said.

The three state-run agencies are expected to float multiple tenders for 50,000 tonnes of wheat each, most probably this week.

The central foodgrain stocks currently stands at 58.93 million tonnes, with wheat stocks making up 38.3 million tonnes and rice 20.57 million tonnes.

This is more than twice the requirement for buffer and strategic reserves.

Total wheat exports from the country in the current fiscal, including shipments by private players, are estimated to be around two million tonnes.

During 2012-13, wheat exports from FCI godowns had totalled 4.24 million tonnes with average price realisation of $311.38 per tonne.

Wheat exports from the country have slowed down in recent months, as buyers mainly from the Far-East, have switched to cheaper grain from Black Sea ports.

Wheat exports would also help FCI create space for the coming kharif rice procurement and save on storage and handling costs of about Rs25 crore per one lakh tonnes of wheat.