Volatility in Australian wheat pauses imports
Fear of hike in import duty also impact forward bookings
The price volatility of imported Australian wheat in the past few weeks has put a pause on forward booking contracts of wheat. The expected announcement of 10 per cent duty on wheat imports might further impact wheat imports, creating hurdles for flour millers consuming high-protein wheat.
South Indian millers who imported high-protein wheat are in a quandary, as prices have been going haywire and there was also a fear of imposition of import duty of 10 per cent on imported wheat.
Merchants and millers have contracted about 0.5 million tonnes (mt) of Australian wheat. Of this, about 0.30 mt had reached Indian shores and the balance would arrive this month. India had received about 0.138 mt during June and 0.16 mt during July.
Sounder Kannan, former president of Tamil Nadu Roller Flour Millers, said in the wake of uncertain imports, the millers might scout for good quality wheat in India.
The premium quality wheat that is grown in parts of Rajasthan, Gujarat and Madhya Pradesh got damaged due to unseasonal rains. This has triggered the demand for Australian wheat that was available at $255 per tonne in May this year. The prices in July touched a high of $290 a tonne eroding the price parity for Indian importers and in August, it again slipped to $265-270.
According to K Dattaraj, the only choice available to flour millers is to minimise the consumption of high quality wheat. “International markets are uncertain. So we cannot predict the wheat supply in next few months,” he added.
Prerna Desai, vice-president-research — Agri Value Chain, Edelweiss Integrated Commodity Management, said, “The demand-supply equation for premium wheat is tight and in the last about five years, this has been the most challenging years for the consumers of premium wheat. In the absence of an import parity, it is not viable to import wheat and the forecast for wheat import considering an import duty over and above the current price of wheat in international market is may remain subdued.”