Private players – led by wheat exporters such as ITC, Emmsons International and Cargill – stockists and millers have turned active buyers in Uttar Pradesh, covering their positions as arrivals gain momentum.
Trade sources estimate the total wheat arrivals in various UP markets between 8 and 10 lakh tonnes a day, half of which is being bought by the exporters at prices ranging between Rs 1,300 and Rs 1,451 a quintal.
Uttar Pradesh is the largest wheat producing State followed by Punjab and Haryana. The private trade is more active in the UP markets compared with other States, as the Government procurement is largely inactive.
Meanwhile, procurement by State agencies in Haryana and Punjab has also gained momentum.
In Punjab, procurement has touched 3.65 lakh tonnes.
Tenders floated
The Food Corporation of India on Tuesday floated tenders to empanel exporters for sale of wheat from the 2011-12 crop year at a floor price of Rs 1,484 a quintal, from the Central pool stocks from Punjab and Haryana.
The Government has decided to allow the private players to export about five million tonnes from the Central stocks.
The idea is to create storage space for fresh wheat that is arriving in the mandis of Punjab and Haryana.
This export is in addition to the 4.5 million tonne allowed to ship by the State-run agencies – STC, MMTC and PEC.
Meanwhile, exports from India by State-run agencies seem to have slowed down, as buyers are staying away from high-priced Government stocks.
Slack exports
While Indian wheat is priced at $310-315 a tonne, the ones originating from Black Sea are commanding a price of around $280 a tonne.
However, on Tuesday, State Trading Corporation received the highest bid of $302.48 from Peter Crèmer for 40,000 tonnes of the 70,000 tonnes offered by the State agency from the Chennai port.
“There were only three bidders for the STC tender on Tuesday against 10-11 bidders for such tenders about a month ago,” an analyst said. Such a trend reflects that buyers are staying away from the high-priced Indian wheat from Government stocks.
Floor price
Exporters have been demanding that the Government revise the floor price downward in tune with the global market. However, the Government is undecided on the reducing the floor price.
Wheat stocks with the Government stood at 24.2 million tonnes as on April 1, and by June 1, the stocks are expected to rise to 62 million tonnes.
Vishwanath.kulkarni@thehindu.co.in