Mumbai: Wheat growers in the US, the largest exporter of the grain, may resume shipments to India after 15 years, US Wheat Associates, a growers’ lobby said. This is likely to extend gains in global wheat prices.
Exports to India may begin after the two countries resolve differences over quality norms, Mark Samson, vice-president for South Asia at US Wheat Associates, said on 18 April.
Resumption of wheat supplies to India may boost shipments for companies, including Cargill Inc. and Archer Daniels Midland Co.
Cargill had to buy grain from other countries last year to supply India because the government barred cargoes with weed seeds, Samson said.
Wheat prices in Chicago reached a 10-year high partly as India resumed imports in February 2006 after a gap of six years.
“I hope there’s some agreement to test some cargoes and to use that as an opportunity to look at the export system of our country,” Samson said. “We can provide them wheat that actually meets their contract specifications.”
India, the world’s second-biggest wheat grower, may import four million tonnes (mt) of the grain this year, a third more than the 3mt Union agriculture minister Sharad Pawar has said the government may purchase, according to a Bloomberg News survey.
Incidentally, India last bought US wheat in the year ended May 1993.
India’s import requirements will depend on how much wheat the state-owned Food Corporation of India, the nation’s monopoly procurement body, buys from farmers, Samson said.
The government may buy 15.15mt from this year’s crop, harvesting for which began last month, compared with 9.23mt last year, Union minister of state for agriculture Akhilesh Prasad Singh said on 2 March.
The government has guaranteed farmers Rs850 for 100kg, which is less than the prevailing market price.
“Three million would be about what is required between now and the next crop,” Samson said. “That’s a very comfortable figure with everybody in the Indian government and the trade.”
India may buy wheat from the US, Canada, Europe and of Black Sea origin until December, Samson said. It could also import from neighbour Pakistan, depending on the size of the surplus there, he said.
The US is the largest exporter and third-largest producer of the grain, trailing China and India.