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Govt goes on a wheat-buying binge to ensure adequate supply

Govt goes on a wheat-buying binge to ensure adequate supply
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First Published: Fri, Aug 24 2007. 01 08 AM IST
Updated: Fri, Aug 24 2007. 01 08 AM IST
New Delhi: India, the world’s second biggest wheat consumer after China, is seeking to buy an unspecified amount of the commodity to increase stockpiles and cool inflation. The world price of the grain has risen to a record in recent past.
The State Trading Corp. of India Ltd (STC), a New Delhi-based company dealing mainly in bulk international trade, will buy wheat in shipments of 25,000-75,000 tonnes each for delivery between October and December, the Union government agency said on its website. The tender for wheat closes on 29 August and STC will decide on how much to import by 3 September.
Indian wheat purchases may extend gains in Chicago prices of the grain. Unfavourable weather has damaged the crop among major producers, including Australia, Europe, Russia and Ukraine.
Global wheat inventories are expected to fall to 114.8 million tonnes by 31 May—the lowest in 26 years, according to the US department of agriculture. “We may see wheat futures go up further as buyers are rushing to secure more, and global supplies are very tight,” said Takaki Shigemoto, an analyst at commodity broker Okachi & Co. Ltd, by phone from Tokyo.
Overseas orders for US wheat supplies are up 86% since 1 June compared with a year earlier, US department of agriculture data shows.
The Taiwan Flour Millers Association, which represents 34 grain users, has issued a tender to import 92,000 tonnes of US wheat after it failed to buy grain on 21 August.
Japan’s ministry of agriculture, forestry and fisheries said it bought 30,000 tonnes of Canadian durum wheat on Thursday under the so-called simultaneous buy-and-sell system. Grain-growing regions in Australia, the world’s third- largest wheat and canola (rapeseed) exporter, may have warmer than average temperatures in spring and that would adversely affect the yields.
“Indian imports will fuel the wheat market globally,” Pramod Kumar, executive director of Sunil Agro Foods Ltd, said by phone from Bangalore. “There’s a shortage of the grain worldwide.”
STC bought 511,000 tonnes of wheat from US-based Cargill Inc., Germany-based Toepfer International and Pakistan-based Riaz Trading Co. Pvt. Ltd for a record $317-$330 (Rs12,807-13,332 then) a tonne on 10 July to ensure sufficient supplies and curb inflation.
India may receive wheat offers of $375-400 per tonne in the new tender, Sunil Agro’s Kumar said.
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First Published: Fri, Aug 24 2007. 01 08 AM IST