Wheat tad lower on bumper crop, stocks.

MUMBAI: Wheat futures were a tad lower on Thursday afternoon weighed down by government's plans not to ban wheat imports despite a bumper harvest and ample stocks, but exports through diplomatic channels limited losses, analysts said.

The August wheat contract on the National Commodity and Derivatives Exchange (NCDEX) was down 0.21 per cent at Rs 1,232 per 100 kg at 12:38 pm.

The government has no immediate plans to ban imports of wheat by private millers, junior farm minister K V Thomas told parliament on Tuesday.

Despite an abundance of the grain government allows duty-free import of the commodity to help consumers in southern states of India, where importing is a cheaper option than buying from northern Indian markets.

Food Corp of India had stocks of 33.58 million tonnes of wheat as on July 1, against buffer norms of 17.1 million tonnes, government data showed.

India holds surplus stocks of wheat and rice, but it has severely curtailed grain exports in recent years to ensure steady domestic supplies. The country, however, allows exports through the diplomatic route.

"Recently we are exporting to Bangladesh...significant more orders can be expected from neighbouring countries," said an analyst with Agriwatch Research.

India's LMJ international made the lowest offer at $285 a tonne including cost & freight in a Bangladesh tender to import 50,000 tonnes of wheat that opened on Wednesday, a food official said.

Bangladesh, the world's fifth-biggest wheat importer, is expected to buy more than 3 million tonnes of the grain this year against 2.2 million tonnes in the previous year.

India will sell 300,000 tonnes of wheat and rice through diplomatic channels to Bangladesh and Nepal, Sharad Pawar said last week, as a revival in monsoon rains has boosted crop prospects.

The US Department of Agriculture estimated India's wheat output at 80.7 million tonnes, in a report released on Tuesday. While the government estimated it at 80.71 million tonnes, a record harvest.

Source : economictimes.indiatimes.com