Date:11/02/2006 URL: http://www.thehindubusinessline.com/2006/02/11/stories/2006021102361200.htm

Back STC floats tender to import 5 lakh t wheat

Our Bureau

Chennai , Feb. 10

THE State Trading Corporation (STC) on Friday floated a tender to purchase five lakh tonnes of wheat, following the Union Food Ministry's move to import the foodgrain to rein in rising prices.

The tender seeks crop of the current season (2005-06) from any origin for import in "loose bulk" form. The wheat would be off-loaded at Mangalore, Visakhapatnam, Kochi, Tuticorin and Chennai ports. (See table for break-up of imports)

The Union Government, while deciding to import wheat, said the consignments would arrive in the South mainly to serve Karnataka and Kerala.

No Kakinada: Though the Food Ministry had said wheat would be imported through Kakinada port also, the tender does not specify the port.

The wheat is to be imported for commercial transactions, though the Food Ministry will have the ultimate say on how the shipments would be utilised. The tender has sought for quotes in dollars cost and freight included and port-wide.

The shipments would have to arrive between March and mid-May, STC, an arm of the Commerce Ministry, said in the tender norms.

While STC guaranteed fully irrevocable, non-transferable letter of credit, it seeks an earnest money deposit equivalent to three per cent of the bid to be made by any seller.

Performance guarantee: Suppliers will also have to execute a performance guarantee bond equivalent to five per cent of the contract value.

The last date for the bids is February 20 and the offers would be valid for acceptance till March 1.

STC has sought wheat with 10 per cent protein content (on dry weight basis), while among other norms, the moisture content is 12 per cent and the total foreign matter, damaged, broken and shrivelled grains cannot exceed five per cent of the overall delivered quantity.

The Union Government decided to import wheat after a gap of six years as prices began to rise on shortage. While roller flourmills and other users complained of low stocks, the stocks in the Central pool declined to 47 lakh tonnes as on February 1. This is expected to further decline to 18 lakh tonnes. Stocks in the Central pool are used for supply through the public distribution system and food-for-work programmes of the Union Government. The Food Ministry has set a target to procure 162 lakh tonnes of wheat this season Wheat production this year is expected to rise to 75 million tonnes from 72 million tonnes last year. On Friday, wheat (dara) prices increased to Rs 970 a quintal from Rs 962.50 on Thursday. On February 2, when the Centre decided to resort to imports, the prices were Rs 957. On February 4, it touched Rs 985 before easing a bit.