India To Import Wheat

Flour millers in the south of India have agreed deals to import mostly Australian prime wheat at levels around USD270-300/tonne according to media reports. This will be the first time India has imported wheat since the 2006/07 season when 6.7 MMT was shipped into the country.

News stories suggest that around 10,000 MT of wheat has been bought in containers, but if the goods get through stringent Indian customs regulations OK, the it could open the door for larger scale bulk imports.

Local prices have risen above the equivalent of USD300/tonne in the north, and USD330-350/tonne in the south. Meanwhile millers are conscious that bulk imports could be made at significantly lower levels, especially in the south of the country.

In late October the government said it had finally agreed to set the minimum tender price for wheat from it's reserves at Rs 1,379.70 - Rs 1,728.23/100kg (USD292-USD365/tonne). The lower price is for wheat in the northern and western breadbasket, whilst the higher price is for wheat delivered to the south of the country.

Millers in the south are keen to 'test the water' with quality control officials via some small containerised imports, before considering some larger bulk purchases whilst global prices remain so heavily discounted.

Whilst Black Sea wheat is currently quoted around USD230-235 a tonne C&F into Asia, international shippers have been quoting around a USD25/tonne 'risk' premium for Indian destinations.

Due to the tight customs regulations, Black Sea origin wheat might still be seen as too risky an option, which may potentially open the door for some EU wheat.