Mumbai: The trend of Indian flour millers contracting wheat from Pakistan, which is offering competitive rates, has left domestic traders unhappy and wondering what’s wrong with the rates and quality offered by them. Wheat from Pakistan would cost the south Indian mills Rs1,115-1,150 a quintal at the mill gate, while it would be around Rs1,080 a quintal if sourced from Uttar Pradesh, the traders said, adding that the cost could be less than Rs1,125 per quintal if wheat is transported from Haryana and Punjab.
Flour millers, who have contracted wheat from Pakistan, feel southern states have a price disadvantage over their northern millers because of the latter’s proximity to wheat producing states such as Punjab and Haryana, they said.
In the last couple of days, three traders have contracted around 35,000 tonnes of wheat from Pakistani suppliers, sources said, adding that the total wheat import contract from the neighbouring country could be about 46,000 tonnes.
Three Indian companies are said to have contracted wheat from Pakistan at a rate of $218-232 (Rs9,374-9,976) per tonne, market sources said. Traders said the Indian wheat was also preferable from Pakistan due to its better quality. According to commerce ministry officials, there would be no problems in import of wheat from Pakistan as India has provided the “most favoured nation status” to the neighbouring country.
The contract comes following estimates of a bumper wheat crop in Pakistan due to which Islamabad decided to lift the ban on exports of foodgrain in January 2007. The two-and-a-half-year ban on wheat imports was imposed by Islamabad in mid-2004.
India is also expected to register an increase of five million tonnes (mt) of wheat this year compared with last year, with the production during 2006-07 estimated to touch 73.7mt.
Purchases from Pakistan will be the first wheat import contract in the new rabi season from any country. The centre has asked State Trading Corporation to gear up for importing 3mt in case of requirement for PDS and other social welfare schemes this year. As for the pending wheat arrivals from contracts entered into by Indian private companies last fiscal, as much as two lakh tonnes of foodgrain is yet to be cleared from various ports.