US bids for India wheat tenders unlikely

The United States is unlikely to bid for Indian wheat import tenders, even after talks between the governments, because stringent quality requirements that blocked it from earlier tenders remain, a US industry group official said.
"Prospects for US participation in future Indian wheat tenders are dim," Steve Mercer, director of communications with the US Wheat Associates, told Reuters in an e-mail.
The main issue was the lack of progress on India's stance on weed seed requirements, he said. India imported 5.5 million tonnes of wheat last year, but the United States did not participate because of a number of issues relating to fumigation, inspection, sampling and weed presence in the cargo.
India announced a tender for 1 million tonnes of wheat on Tuesday, and said there were no changes to quality norms. "This issue has been considered for more than a year with the conclusion that the US cannot comply with India's requirements," Mercer said.
"It is not economically feasible to clean the volumes of wheat that India wants to buy for the prices that India wants to pay," he said. India requires a lower level of weed seeds than typically requested in international tenders.
India will end up paying a higher price if the United States does not participate as wheat of Australian, Pakistani and Ukraine origin is not available in market, said a senior analyst with IL&FS Investsmart India Ltd.
In May it appeared that India and the United States were moving closer to an agreement on wheat import standards after a visit by an Indian delegation, but US embassy sources in New Delhi said in early June substantial hurdles remained. India cancelled a tender to import 1 million tonnes of wheat in May due to high prices.
"India is likely to pay at least 7-8 percent more per tonne for the grain in its recent tender compared with the $263 it declined to pay in May," said Avinsh Raheja, assistant vice-president Commtrendz Risk Management Services Pvt Ltd Chicago Board of Trade (CBOT) wheat futures have soared to 11-year highs this month on, among other factors, cues from Indian export demand.