The Food Corporation of India has found no takers for its initial tender to sell about one million tonnes of wheat to private players for exports as the price is high.

The Government had fixed a floor price of Rs 1,484 a quintal for offloading about five million tonnes of wheat from the 2011-12 crop from FCI warehouses in Punjab and Haryana, for which the first set of tenders were floated.

“There was no response to our tenders today. We plan to re-tender the same later this week,” FCI Chairman, Amar Singh, told Business Line.

The FCI had tendered 4.09 lakh tonnes (lt) of wheat from its godowns in Haryana and 5.4 lt from Punjab. Recently, the Government had approved exports of five million tonnes from the Central pool stocks by private exporters to make storage space for the new crop that’s being currently harvested.

Higher prices

However, exporters feel that shipments from the Government stocks were unviable at the price offered by FCI as the global prices have started softening. At current FCI’s price of Rs 14,840 a tonne, wheat for exports including the transportation and handling costs, would cost about $315 a tonne free-on-board, while the grain from Black Sea origin commands a lower price of around $280 .

Moreover, the availability of wheat at a lower price than the minimum support price (MSP) of Rs 1,350 in the mandis of the Uttar Pradesh has prompted the exporters to buy from the country’s largest wheat producing State.

In some of the mandis of Uttar Pradesh such as Baharaich and Haathras, wheat traded at around Rs 1,330- 1,340 a quintal, marginally lower than the minimum support price on Monday. Exporters, stockists and domestic millers have been actively buying from the UP mandis since the harvest has begun in the current season.

Exporters such as ITC, Emmsons International and Cargill among others have been actively buying from the UP market, where the Government’s procurement mechanism is relatively weak when compared to States such as Punjab and Haryana.

inventories

Though the private exporters have been demanding the Government to revise the floor price downwards in tune with the global market, the Centre is undecided on the issue. The re-tendering on Wednesday is expected to be on the same price of Rs 1,484 a quintal.

So far, the State trading agencies – STC, MMTC and PEC have totally exported about 3million tonnes of 4.5 million tonnes allowed from the Government stocks.

Wheat stocks with the Government stood at 24.2 mt as on April 1, and by June 1, the stocks are expected to rise to 62 mt as procurement is in full swing in Punjab and Haryana