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India begins wheat exports with sales to Bangladesh

India has begun wheat exports to reduce bulging stocks with the sale of 25,000 tonnes by state-run MMTC Ltd to neighbouring Bangladesh, officials said on Friday.

MMTC is expected to sign more sales contracts in the next few days, said a government official who declined to be identified.

"We have sold some rakes of Indian milling wheat to Bangladesh, about 25,000 tonnes," the official said.

He said the wheat was sold at $122 per tonne and deliveries will be done in November and December. He said MMTC had sold the wheat to private traders in Bangladesh.

The official said MMTC and other agencies were also in negotiations for wheat sales to Iraq. Initial demand from Iraq was for about 200,000 tonnes of wheat but it was expected to buy more, he said.

India's oil minister Ram Naik said in Bombay on Thursday that India will import crude oil from Iraq in exchange for wheat.

The imports would be under the United Nations' oil-for-food programme which allows Iraq to sell unlimited quantities of oil to buy food, medicine and other humanitarian needs, he said.

Food Minister Shanta Kumar had said on Wednesday that India's state-run companies were looking at possible buyers of wheat to cut excess stocks.

Seeking buyers

He said state-run MMTC Ltd, State Trading Corporation and Project and Equipment Corporation were seeking buyers.

The Indian cabinet last week approved a proposal for state agencies to export wheat and rice at subsidised prices to reduce stocks and cut storage costs.

India had foodgrains stocks of 40.06 million tonnes at the start of October, of which nearly 22 million tonnes were buffer stocks. Wheat accounted for 26.85 million tonnes of total grain stocks and rice 13.21 million.

Officials said the state agencies had been asked to explore exporting wheat at Rs 4,150 ($88.90) per tonne, the rate at which it is sold domestically to those below the poverty line.

Kumar said the rates were competitive in the global market.

The official said other expenses such as freight and moving of the wheat to railheads from warehouses and handling charges needed to be included in such sales.

Sale offers had also been made to about a dozen trading houses to meet requirements for Indian wheat in the Middle East, south-east Asia and Africa, he said.

"Negotiations are still on," he said.

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