Seven global companies are in the fray for supplying over one million tonnes of wheat to India.

The State Trading Corporation of India had invited bids from global firms to supply over one million tonne of wheat.

The companies that have bid for the project include Cargill, Glencore International AG and Alfred E Toepfer International of Germany, Adani Global, Adani India on behalf of Archer Daniels Midlands of US, Rayas Trading and Concordia.

India is world's second-biggest wheat consumer. Worried over its failed procurement operations and anticipating a shortfall in production, the government decided to invite tenders for import of 1 million tones of wheat.

The bids quoted are in the range of $267-302 per tonne on cost & freight basis. Majority of the bidders quoted prices around $296 a tonne. STC had floated the tender on May 1 for import of one million tonne of wheat on government account.

STC officials said the bids would be finalised within the next 10 days.

According to the tender stipulations, wheat should be imported in May, June and July in staggered shipments through five entry ports, including Mundra, Kandla, Chennai, Vishakhapatnam or Kakinada and Tuticorin.

This would form part of the 3 million tonnes of wheat the government is planning to import this year to bolster its stocks.

The decision to go in for wheat imports for the second consecutive year is viewed as ringing in a regime of regular imports from now on in view of low yields in comparison with burgeoning demand from a growing population.

Global wheat prices are in tight market as uncertainty still prevails over Australia's output this year and Russian wheat is yet to come into the market. The prices in international market has risen by $20 per tonne over the last few days on news that India is likely to enter the market for big imports.

Import prices currently reign in the range of $225-240 a tonne cost and freight but it is expected that this can go up by 10-20%. With speculation over a significant shortfall in Australia's wheat production, world wheat prices are expected to be propelled higher in the global market.

For India, it would mean paying more for imported wheat through any route, futures using call options or through the spot market.

According to official estimates, India's wheat output this year will be 73.7 million tonnes against an estimated demand of about 60 million tonnes.

The government is importing wheat to build buffer stock for meeting any contingency.