Women labourers collect wheat at a warehouse on the outskirts of Amritsar in India.
Indian flour millers and the local units of global trading giants
have sewn up deals to import 500,000 tonnes of premium Australian wheat
since March, trade sources said, the biggest such purchases in over a
decade, despite surplus stocks at home.
Concerns that untimely rains in February and March would cut wheat
output, especially of high-protein varieties grown in central India,
first drove flour millers in the country's southern ports to place the
orders.
Attractive prices then prompted traders such as Cargill, Louis
Dreyfus and Glencore to follow, said three sources directly involved in
the deals.
The traders and millers could import another 500,000 tonnes from
France and Russia, where harvests are around the corner. The deals could
further push up benchmark prices that have jumped recently on concerns
about crop quality in the United States.
"There are strong chances French and Russian wheat will find their
way to India because of attractive prices and surplus stocks there, and
if the euro goes down, I expect more French wheat coming to India," said
one source.
Almost half of the already-contracted quantity, bought at $255 to
$275 per tonne, has reached India and the rest is scheduled for July
delivery, said the sources, who declined to be identified because of the
sensitivity of the subject.
Although rains and hailstorms wilted the wheat crop, India, the
world's second-biggest producer of the grain, has large stockpiles
accumulated after eight straight years of bumper harvests.
Industry and government officials estimate this year's wheat output
at about 90 million tonnes, nearly 5 percent lower than the 2014
harvest, but still exceeding domestic demand of about 72 million tonnes.
Since wheat is largely grown in India's central and northern plains,
flour millers from southern states, hemmed in by the Indian Ocean,
sometimes find it attractive to import high-protein grades from
Australia.
But this year's unusually large volumes have surprised some.
"Other than large amounts of wheat that we're importing, we see two
other significant changes," said one of the sources. "Perhaps for the
first time some imports are taking place in vessels and perhaps for the
first time millers will end up buying French and Russian wheat as well."
At about $185 to $190 a tonne free on board, French and Russian wheat is attractive for India, said another source.
High-protein wheat in India costs more than $300 a tonne and imports could ebb if prices fall to about $283, the sources said.
But Russian wheat may not meet India's quality requirements, despite
its higher protein content than French wheat, said Tajinder
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