Buoyed by the strong response to its attempt to sell wheat from state-run warehouses, the government is planning to launch a series of export tenders in January, February and March to sell a total of about two million tonnes (mt) in foreign markets.

Food ministry officials said the next tender, for the export of 210,000 tonnes, would be floated on December 12. The wheat would be exported from the Kandla, Visakhapatnam and Pipavav ports, through tenders floated by PEC and MMTC.

Earlier, the government had to reduce the base price for export from $300 a tonne to $260 a tonne, after its attempt to export 0.15 mt was cancelled, as the bids received were much lower than the base price.

On Tuesday, state-owned trading firms State Trading Corporation, MMTC and PEC received bids in the range of $284.7-289.9 a tonne for the export of 0.34 mt from Food Corporation of India (FCI) godowns. The highest quotations received by the three trading firms were higher than the government’s floor price of $260 a tonne for the export of FCI-procured wheat.

“We expect to get a good price in the coming months, too,” said a senior government official. “We were hoping to get a price of $270-275 a tonne, but the price quoted (about $290 a tonne) was unexpected, which showed Indian wheat had started commanding a premium in international markets.” He said the price received was even more than that quoted for Black Sea wheat, one of the most valuable wheat brands in the world.

“In the coming months too, the trend is expected to be maintained because according to information, the Australian wheat crop is not as good as expected. This will enable us to sell more in foreign markets,” he said. Exporting wheat was more profitable for the government than selling it domestically, as at an average price of $285 a tonne, the government was expected to earn about Rs 18,000 a tonne, while in India, it had to sell at Rs 16,000 a tonne, he added.

In 2012-13, the government had earned $1.4 billion by exporting 4.2 mt of wheat through public sector undertakings. Last financial year, Indian wheat had fetched an average price of $311.38 a tonne.

India is exporting wheat from state-run warehouses, as consecutive years of bumper harvests have filled these godowns to the brim. According to Food Corporation of India, wheat stocks in state godowns were estimated at 34 mt as on November 1, against the requirement of just 14 mt.

Source:- business-standard.com