The Hindu Business Line : US to hold talks on norms for wheat imports

A US trade official will hold talks with the Agriculture Ministry's Plant Protection and Quarantine (PPQ) on contract specifications for import of wheat.

Mr Mark Samson, Vice-President, South Asia, US Wheat Associates, will meet the PPQ department officials here tomorrow.

Mr Samson is here in connection with the international seminar on wheat and wheat products — Emerging Trends & Opportunities.

"The US trade official will basically hold talks to find out how we can meet the required regime and certification process," sources told Business Line.

When contacted, Mr Samson said the talks were being held so that the United States could get a clear picture on India's requirements.

`Ease tender norms'

"We feel the tender contract specifications should be less onerous and difficult. In our opinion, India could have save money through a better tender process," he said.

As a result of the rigid tender, India had to pay a premium of $20 a tonne for the wheat it was procuring from Australian's monopoly wheat export body, AWB Ltd, Mr Samson said.

Even in countries such as Japan, which was conscious of quality, paid a premium of $1-2 only. "As far as the US wheat is concerned, we felt the tender specification on zero tolerance of exotic weeds and orgids were unnecessary," he said.

"Even if we had won the contract, it would have been difficult to meet the contract specification. In fact, get a certification on zero exotic weeds is nearly impossible," he said.

"We feel that in the name of sanitary and phyto-sanitary conditions, certain suppliers were isolated. The tender should be fair and even to everyone," Mr Samson said.

As a result, the US wheat was quoted at $35 over the price bid by AWB.

"Basically, it was a risk premium since the consignment had to be delivered in small vessels, the delivery period was short and problems were anticipated in port discharge. There was also this risk that the wheat may be rejected," Mr Samson said.

AWB pricing

Last week, the Union Government awarded the tender to import five lakh tonnes of wheat duty-free to AWB. The Union Minister of State for Food, Mr Akhilesh Prasad Singh, told the Rajya Sabha on Monday that the wheat was being bought at $178.75 a tonne. This is lower than what AWB had quoted as a valid offer till February 23. It had said after that, the price would be $185.5 a tonne.

However, sources said AWB was asked to extend the $179 offer till February 28 first and then again till March 1. The contract specifications, too, have undergone changes with now the maximum trash permitted in the consignment is one per cent.

Since the Central Vigilance Commission has laid down rules of engaging sellers for talks to further bring down the prices, STC, which is buying on behalf of the Centre, gained a further 25 cents a tonne.

According to trade sources, on f.o.b terms, the offer price works out to $145 a tonne. This, according to them, is higher that $130 a tonne f.o.b paid by Egypt for 1.8 lakh tonnes of wheat on February 10.

Sources said Indian purchase included unloading charges and gunny bags. This would mean the effective price of the wheat was $174 a tonne.

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