MMTC Floats Tender To Import 3.5 Lakh Tonnes Wheat

Chennai: MMTC Ltd, an arm of the Union Commerce Ministry, on Monday issued a tender to import 3.5 lakh tonnes of wheat as part of the Centre’s effort to build buffer stocks. The Union Food and Agriculture Minister, Sharad Pawar, had indicated that the Centre would import another 10 lakh tonnes wheat shortly and this tender is seen as a follow-up of that statement.

Tender on web

In its tender notice on its Web site, MMTC invited bids for 3.5 lakh tonnes of wheat both in bulk and in containers. It has sought the bids on cost and freight basis for delivery before February 10 next. The ports of delivery given in schedule are Mundra, Kakinada, Kandla, Chennai, Visakhapatnam, Tuticorin, Kochi and Mumbai. The tender closes on November 19 and offers will be valid till November 24.

While MMTC had been asked to import 3.5 lakh tonnes, the rest of the intended quantity of wheat will be imported by State Trading Corporation and PEC Ltd, also arms of the Commerce Ministry. Official said the quantity of imports would depend on the offers made by the sellers.

The trade, however, slammed the move, saying it was “unwise and wrongly timed”. “The wheat tender has been floated at a time when Australia has reported a lower than estimated wheat crop,” traders said.

Australia scene

Australia, which initially expected a crop of 20 million tonnes, has pruned the estimates to 15 million tonnes due to drought wreaking havoc on the plants. “The crop could be lower than 12 million tonnes and on top of this, Australia has no wheat stocks to offer,” they said. The tender floated by MMTC also had an effect on the open market. In New Delhi, wheat prices were up Rs 10 a quintal to Rs 1,070-1,075 a quintal.

The Centre has already contracted 13 lakh tonnes of wheat for import with the last deal of over eight lakh tonnes being struck at $389.45 a tonne. It also led to a controversy and became a political issue with the Left parties and the BJP questioning the move on the grounds that imports would be at over Rs 17 a kg when farmers here were getting below Rs 10 a kg.

Going by the current prices in the global market, the quotes should be above $400 a tonne.

“Even at $400 a tonne, you are likely to get only wheat of Black Sea origin,” trade sources said.

Buffer stocks

Last year, 55 lakh tonnes of wheat were imported and a major portion of it is still lying in port warehouses, according to trade sources. Imports were resorted to last year as production dipped to below 69 million tonnes and buffer stocks were low. However, this year while buffer stocks are seen adequate at around to meet the demand for supply through ration shops, Pawar has justified the move saying it is for next year.

This year, wheat production is seen above 74 million tonnes, while farmers are also said to be holding significant quantity of the grain with them.

On top of this, wheat sowing during the current kharif season is likely to increase with the Centre raising the minimum support price to Rs 1,000 a quintal.