India To Cut Floor Price For Private Wheat Exports

India is considering lowering the floor price for wheat sales to private traders for export from state warehouses, government sources said, to kick-start shipments by this route as global prices hover near nine-month lows and stocks pile up. One suggestion is to lower the price to 13,500 rupees ($246)a tonne from 14,800 rupees plus taxes, said one government source directly involved in the decision making process.

Two other sources confirmed the government was considering the move, which traders said could make prices competitive. The government last month offered private traders up to 5 million tonnes of wheat for export from government warehouses which are overflowing, but its floor price was seen as too steep by private traders.

"If India can supply wheat at around $270 to $280 a tonne on FoB levels it will be the most competitive origin," said a Singapore-based grains trader. "India will not only be able to regain its share of the feed market in south-east Asia but also get good business of the milling wheat market in the Middle East," the trader added.

New Delhi's offer to private traders came after it had already allowed 4.5 million tonnes of exports through tenders by its own trading companies. "STC didn't receive any bid as global prices have now come down and it appears that nobody wants to bid for costlier Indian wheat," said a trader who has been bidding in the tenders.

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