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Indian firm eyes wheat markets in Iran, Iraq

India's leading wheat exporter, the Punjab State Cooperative Supply Marketing Federation (Markfed), plans to capitalise on a global supply squeeze to expand its markets in the Middle East, its head said on Tuesday.

S S Channi said the company was approaching buyers in Iran and Iraq, two of the region's biggest importers, with offers to supply wheat as per their quality specifications.

"Right now we are only selling one quality, Indian milling wheat, but we plan to produce and market hard varieties that fetch better prices," Channi, Markfed's managing director, told Reuters in a telephone interview from Chandigarh.

Iran plans to import 420,000 tonnes of wheat by March 2003 to cover half its expected shortfall for the year to March 2004, a well-placed government source said in Tehran on Tuesday.

It has been a major importer of wheat, mainly from Argentina, Canada and Australia.

Indian wheat exports have often suffered because of quality problems. Iraq last year rejected some consignments of Indian wheat because of quality concerns.

Channi said Markfed was setting up a laboratory to grade wheat. "Then we will be able to exactly say how much protein content our wheat contains," he said.

India, which entered the wheat export market two years ago, has been selling around 200,000 tonnes a month. It plans to export 15 million tonnes of grains, including rice, in 2002/03 (April-March) to cut its huge stock of 55.4 million tonnes as of September 1.

Markfed is expected to export 1.7 million tonnes of wheat in 2002/03 (April-March) compared with 800,000 tonnes a year ago.

Shrinking global supplies

Most of the sales have been of the lustre loss variety which is used in the feed industry or mixed with other varieties.

Indian wheat is mainly sold to the Philippines, Vietnam, Indonesia, South Korea and Africa.

Channi said wheat production in the United States, the world's largest exporter, was pegged much below last year's levels. A severe drought in Australia, another major shipper, is expected to cut its wheat output by more than half to around 10.13 million tonnes.

He said in contrast India was sitting on a wheat stockpile of 38 million tonnes. Markfed had signed agreements with major ports for storage of grain at warehouses on the eastern and western coasts to boost sales, Channi added.

"We will have 50,000 tonnes of wheat each at most of the major ports so that it can be quickly shipped out," he said.

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