Date:18/05/2006 URL: http://www.thehindubusinessline.com/2006/05/18/stories/2006051804050900.htm

Back Wheat tender to open today

Harish Damodaran

STC announces further relaxation in quality testing norms

New Delhi , May 17

A day before bids are to be opened for its 30-lakh-tonne (lt) wheat import tender, State Trading Corporation (STC) has announced further relaxations in fumigation and quality testing norms.

In its original February 20 tender for five lt, STC had made it mandatory for wheat cargoes to be fumigated with methyl bromide at the port of loading. The provision was criticised by exporters, who cited restrictions on the use of methyl bromide on grounds of it being ozone-depleting.

OPTION

Following this, STC, in its 30-lt tender of May 8, gave exporters the option to spray aluminium phosphide (presumably a more environment-friendly substance) before export and spray methyl bromide during transit. However, in a corrigendum issued on Wednesday — just a day prior to the closing of the tender — a further relaxation has been granted.

In-transit fumigation can now be undertaken at "anchorage of the Indian discharge port," which means there is no need to spray even during transit.

SAMPLING PROCEDURES

Simultaneously, there has been an easing of sampling procedures for detection of quarantine pests and weeds. Earlier, it was prescribed that a sample of one-kg of wheat be drawn for every 20 tonnes loaded on to the vessel, with the entire quantity subject to inspection. This again was considered cumbersome, as it would have entailed thousands of samples being tested.

The latest corrigendum has accordingly provided that the exporting country adopt an `appropriate statistical sampling intensity' so as to yield a 95 per cent confidence level.

RELAXATIONS

The latest set of relaxations is over and above the easing of quality specifications in the May 8 tender. While the original February 20 tender had mandated the imported wheat to be free from moulds as well as two fungal pathogens (dwarf bunt and ergot), there is no mention of moulds in the present tender. Further, ergoty and dwarf bunted grains have been permitted by weight to the extent of 0.01 per cent and 0.005 per cent, respectively.

Whether after all these, the latest tender would have enough takers will be known on Thursday.

New norms

To what extent exporters use the `rigid' quality norms to bid up prices beyond prevailing global rates and how much the Government obliges in the face of possible Parliamentary opposition is being closely watched. In the previous tender, Australia's monopoly wheat export body, AWB Ltd, had bagged the contract at a landed price of $178.75 per tonne. Since then, world prices have risen by around $25, which means importing at well above $200 per tonne.

Meanwhile, it is learnt that the four lt of wheat that AWB Ltd is yet to deliver (out of the five lt contract) has got `stuck' mainly due to presence of ergot fungus. "While STC has now allowed up to 0.01 per cent ergot, this was not permitted last time. The Australians are wanting the new norm to apply retrospectively, which is not agreeable to the Indian side," sources said.