ITC Group sold a shipment of Indian wheat rejected by Turkey to a Swiss trader
A consignment of wheat from India rejected by Turkey two days ago for phytosanitary reasons was not sold directly to Ankara and was shipped through a Swiss-based trading house, officials said. reported today from official sources.
“The Center has been notified of the rejection. We learn that the shipment concerns ITC Group, which did not sell directly to anyone in Turkey. The consignment was sold FOB, expectation basis and final quality, by an expert buyer in India for an importer based in Switzerland,” said an official, who did not wish to be identified as he is not authorized to speak. to the media.
ITC has not received any information or details about the rejection of shipments from its buyer, they said. The ITC did not respond to requests for comment on the issue by Activity area.
According to reports, Turkey rejected 56,877 tons of durum wheat because the shipment was detected as a carrier of rubella by the Turkish Ministry of Agriculture and Forestry. The shipments had taken place before India imposed a ban on wheat exports from May 13.
The consignment is now directed to the port of Kandla in Gujarat from where it was loaded. The wheat possibly comes from Madhya Pradesh, which grows the specialized grain used for making pasta and macaroni.
An exporter stated that if the shipment had been sold on a FOB (free on board) basis, expectation and quality means that a third party, primarily an international expert, will inspect the shipment and decide on the tonnage and quality.
“Probably the contract was signed based on the agreement that the price would be based on customs clearance at the port of discharge,” said the exporter, who did not wish to be identified.
A business analyst wondered how rubella disease suddenly emerged. The analyst, who did not wish to be identified, suspected that it could be a “political” decision given that Turkey has been hostile to India since the moment India removed the Article 370 which grants special status to Kashmir.
However, the exporter said the presence of an antimicrobial element could have been found in the shipment and could be a bit of a concern. “Turkey is short of wheat and the rejection may not be for political reasons,” he said.
Options for the seller
The fact that the cargo returns to Kandla indicates a serious quality problem. “Usually when one country refuses, exporters try to sell it in another country. In this case, if Turkey had rejected the shipment, the exporter could have tried to sell it to Egypt, which is further away. But that is not happening,” he said.
The exporter also pointed out that India has since banned wheat exports after shipment, another indicator that the phytosanitary problem could be serious.
India banned wheat exports from May 13 after a heatwave that swept the country affected wheat production and the Food Corporation of India (FCI) was unable to procure sufficient grain for supply through ration stores. Indeed, free market prices were above the minimum support price of ₹2,015 per quintal given huge export demand.
Decline in production, purchases
Wheat production this year is estimated to be 106 million tonnes (mt) lower than initial projections of a record 111.32 mt. The FCI bought only 18.75 tons of wheat as of May 30 against 43.44 tons last year. On May 1, the parastatal agency had 30.34 tons of wheat stocks against 52.57 tons a year ago.
India exported a record over 7.5 tonnes of wheat last financial year and this year it was aiming to top it before hot weather and bad buying derailed its plans. India is not a major exporter, but the Russian-Ukrainian war has led to supply shortages and soaring prices, which has created demand for its wheat.
Russia and Ukraine represent 30% of the world market and the geopolitical crisis has affected supplies from both countries.
Chicago Board of Trade benchmark wheat futures currently sit at $10.937 a bushel ($401.87 a tonne), a three-week low. In the domestic market, the weighted average modal price (rate at which most trade takes place) in various agricultural terminal markets was ₹2,066 per cwt.
June 01, 2022