The Hindu Business Line : Bidders quote higher rates for STC wheat tender

Frenzied interest
No player offers to supply entire quantity
Aggregate quantity greater than tendered amount
All bids obey conditions stipulated in tender

New Delhi , Sept 5

As expected, prospective suppliers for State Trading Corporation of India's (STC) latest wheat import tender for 16.7 lakh tonnes (lt) have bid at rates much higher than in the previous four tenders.

Of the eight parties whose bids were opened by the STC on Tuesday, Glencore International AG of Switzerland offered to supply the highest quantity of 6.5 lt.

It also quoted the lowest rate of $223.75 per tonne cost & freight (c&f) for delivering 1.3 lt at Mundra port. For the remaining quantity, its highest bid was $250 a tonne, officials said.

Australia's monopoly wheat shipper, AWB Ltd, offered to supply 6.3 lt at between $225 (c&f Mundra) and $257 (New Mangalore).

The other major bidders were Toepfer International of Germany (5.4 lt at $227-267), Cargill of US (2.2 lt at $244-261) and the Adani Group's Singapore-based subsidiary, Adani Global Pte Ltd (2.82 lt at $239.51-251.11).

Others who bid for the tender are Concordia Agritrading Pte Ltd of Singapore (1.8 lt at $232-246), Louis Dreyfus of France (1.24 lt) and Agrico Trade & Finance SA of Switzerland (one lt). While Agrico's price bids ranged from $242.9 to $259.9, Louis Dreyfus quoted as high as $270 for 35,000 tonnes at Tuticorin.

Significantly, not a single player offered to supply the entire 16.7 lt for which STC had invited bids.

But the aggregate quantity offered by the eight bidders, at about 27.3 lt, works out higher than the tendered 16.7 lt.

Further, none of the bids deviate from the conditions stipulated in the tender, which means that they will not be rejected on technical grounds, officials said.

However, this does not still insure STC from having to contract imported wheat for the public distribution system at ever-increasing prices.

In its first tender floated on February 10, the parastatal contracted five lt of wheat at $178.75 c&f.

For the second tender on May 8, the price range for the total contracted quantity of eight lt was $187-199.20.

In the third and fourth tenders floated on June 8 and July 27, the price range rose further to $190-205 per tonne for 22 lt and $209.75-214.75 per tonne for 3.3 lt respectively.

In the latest tender, the lowest bid is $223.75, and that for only 1.3 lt.

The average contract price is likely to be well above $230, which would mark an increase of above $50 since February.

The difference would be greater if one discounts for quality between Australian white wheat supplied in the first tender and the less-preferred grain of Russian/Black Sea origin in the recent tenders.