India's projected healthy wheat crop in the marketing season beginning March and projections that the country, besides neighbour Pakistan, could emerge as potential exporters in an already well stocked global wheat market could keeps sustained pressure on prices.
Wheat output in the 2010-11 marketing season is pegged at 80 million tonnes, forcing the PMs Economic Advisory Council (PMEAC), in its report here Friday, to suggest that more wheat be pumped into the PDS and extensive welfare programmes to cut down rice consumption. Rice stocks are much lower in comparision to last year and, should the governments procurement target for rice fall below 27 million tonnes the PMEAC has suggested that rice imports be considered.
While the harvesting season for the winter-sown staple has already begun in Gujarat, it is set to begin next month in other staes including Maharashtra, MP and Rajasthan. Global wheat prices are likely to remain under pressure due to large stockpiles in major growing countries, trading executives and analysts said Friday.
Given the scenario, top world exporters of wheat including Russia, France, Ukraine and Canada are currently offering big rebates on older stocks in a market where prices have plummetted to record lows. Agencies have quoted traders to maintain that prices could dip further.
Some southern mills in India, taking advantage of the rock bottom prices, have resorted to importing cheap Australian prime wheat since landed prices are still cheaper than local wheat prices. Since October, mills in south India are understand to have purchased close to 100,000 tonnes of Australian wheat at $285/tonne (C&F). 60,000 tonnes have already been delivered at ports. But very little purchases have been made in February, it is understood.
According to reports, while Ukraine's feed wheat is now being offered at $125-$130/tonne for Asian destinations, FOB The worlds largest wheat importer, Egypt, bought Russian and French wheat this week at around $170/tonne, down from $186.5/tonne for Russian wheat in January. last month.
Reports are also that Russian wheat is being offered to Asian importers at only $160/tonne, FOB, in pirvate deals. However, wheat futures prices have yet to keep pace with fall in the spot market rates but commodity analysts expect them to.
Source : The Economic Times