Cashing on a sharp rally in international prices and signalling a big uptick in overseas sales, Indian traders sign contracts to export about 500,000 tonnes of wheat in recent days.
Last week, traders said they had received inquiries from buyers seeking alternatives to Black Sea cargoes as Russia’s invasion of Ukraine threatened supplies from two producers which together account for 30% of world wheat exports.
India which is the second biggest producer of the gain, is keen to capitalise on any export opportunity. A high domestic price guaranteed by the government tends to deter exports unless world prices are high.
“The surge in global prices has made it easier for Indian suppliers to meet the rising demand for wheat,” said one dealer at a global trading firm, declining to be named because of company policy.
India guarantees producers about $257 a tonne for domestic sales, while benchmark European wheat jumped above 400 euros ($435) on Monday and benchmark wheat prices in Chicago settled at their highest in 14 years.
India is set to export a record 7 million tonnes of wheat this year.
“The buyers, who are worried about supply disruptions from Ukraine and Russia, know that only India can be a big, steady supplier of wheat at this point of time, and that’s why they have turned to India,” the dealer said adding that the nation has sealed deals to export about 500,000 tonnes of wheat in recent days. The fact was confirmed by the two other traders.
“Most suppliers have signed these deals at around $340 a tonne free on board (FOB) to $350 a tonne,” said trader Rajesh Paharia Jain at Unicorp Pvt Ltd.
Traders earlier sold wheat at $305 to $310 a tonne FOB.
An Indian government official on anonymity said New Delhi was “supportive of wheat exports and will facilitate” shipments by private players.