An Indian exporter has quoted the lowest price in Bangladesh’s latest tender to import 50,000 tonnes of wheat. The bid is around seven dollars lower than the previous tender finalized last week.
The current tender, floated on March 30 and opened on Monday, saw the lowest bid from Indian firm Bagadia Brothers, offering the wheat at $ 399.19 a tonne, said Rajesh Paharia Jain, a Delhi-based exporter.
Swiss Singapore Overseas made the second-lowest bid at $ 399.69 a tonne and Intra Business Pte Ltd, Singapore, offered wheat at $ 409.38 a tonne.
In the previous tender that was bagged by Agrocorp Singapore, the lowest bid was $ 406.83 a tonne. Interestingly, Bagadia Brothers’ bid at $ 417.19 was the third-lowest offer last time. Swiss Singapore Overseas Enterprises Ltd, which again made the second-lowest bid, offered the grain at $ 414.98.
In another bid finalized in the March third week, Swiss Singapore Overseas made the lowest bid at $ 409.97 a ton covering cost, insurance and freight plus unloading costs. The next best bids were $ 424.77 and $ 442.38.
Though global trading firms are bagging the tenders, they are expected to source wheat from India. Indian wheat is priced at least $ 50 a ton lower than others
Bids are lower this time as the arrival of wheat – a key rabi crop – has begun and prices are expected to be under pressure. This is an advantage to India since crops from no other exporting country will hit the market at least until June.
Jain said the bid costs include cost, insurance, freight and unloading charges. The Bangladesh Government is expected to sign the deal, if all goes well, in a fortnight’s time.
Ample vessels available
The wheat consignment, expected to be shipped out of Kandla, Gujarat, will be delivered during the monsoon period.
The wheat will have to arrive in Bangladesh ports 40 days after the deal is signed.
Bangladesh plans to import one million tonnes (mt) of wheat over the next few months. “It will float tenders regularly,” said Jain.
“Availability of vessels from India will be ample,” he said.
Jain said India will have to consider becoming a force in wheat exports on a long-term basis rather than filling in the void due to the Russia-Ukraine conflict.
The conflict has resulted in supplies from both nations that make up nearly 30 per cent of the global export market being affected. “Our wheat is sold at 25 per cent discount. Therefore, India has to become a serious player in the global market, ”he said.
Exporters sign more deals
Indian wheat is likely to gain from Bangladesh’s demand at least this year. Dhaka had till now been buying the foodgrain from Russia, but the Ukraine war has disrupted its supplies.
Commerce, Industry, Food and Public Distribution Minister Piyush Goyal has said India will export at least 10 mt of wheat during the current fiscal. Last fiscal, a record 7.7 mt of wheat were shipped out with Bangladesh alone buying 3.5 mt.
Last week, Food Secretary Sudhanshu Pandey said exporters have signed deals to ship out 3.5 million tonnes of wheat by July. Jain said wheat shipments could top 4.5 mt by July 31.
Exporters, pointing to ports data, say India would have shipped out over 1 mt of wheat between March 1 and April 11 with importers being Yemen, South Korea, Qatar, Bangladesh, Sri Lanka, Oman, Vietnam, Thailand and the Philippines.
Bangla call for enlistment
The geopolitical crisis has resulted in wheat prices surging in the global market, helping Indian exports.
Wheat prices have gained about 25 per cent since the war broke out on February 24. Currently, the benchmark contract on the Chicago Board of Trade quoting at $ 10.70 a bushel ($ 393.11 a tonne).
According to the International Grains Council, Argentine wheat was quoted at $ 401 a tonne free-on-board during the weekend, while US Hard Red Winter and Soft Red Winter wheat ruled at $ 489 and $ 434, respectively. EU France Grade wheat ruled at $ 420 a tonne. Wheat prices are up over 70 per cent year-on-year.
Meanwhile, Bangladesh on Monday called for applications from exporters and importers for enlistment with its Directorate General of Foods for wheat and rice. This is in view of Dhaka wanting more participants in its tenders to buy wheat and rice from the global market, Jain said.
April 11, 2022