India sells only part of wheat export tender.

NEW DELHI, Aug 9 (Reuters) - India sold only 79 percent of government wheat stocks offered in a first round of tenders, trade sources said on Thursday, deciding against awarding one of the tenders after judging bids too low at a time that global prices are soaring.

India, the world's second-biggest wheat producer, aims to sell 2 million tonnes overseas from government warehouses to avoid rot as it sits on huge stockpiles of winter-sown wheat and rice from previous harvests.

It had set a base price of $228 per tonne, but with international prices hitting 17-month highs, bids for 190,000 tonnes came in nearer $300 per tonne. Bids for another 50,000 tonnes came in above the base price, but the state seller held back for higher prices.

Global grain market prices have been fanned by fears about supplies because of drought in the United States and in Russia, Ukraine and Kazakhstan, where harvests could drop nearly a third from last year.

State Trading Corp. sold 100,000 tonnes to the highest bidder - Germany's grain trading house Toepfer - at $302 a tonne FOB basis.

PEC Ltd sold 70,000 tonnes at $296.68 per tonne to the Singapore-based trading company Starcom, the highest bidder in its export tender that closed Aug. 3. It also sold 20,000 tonnes to Toepfer at the same price, even though it had bid at a lower price.

But MMTC Ltd, the third state-run company involved in the sale of wheat from government stocks, did not sell anything in the first round after bids came in lower. It reissued that tender for 30,000 tonnes and also issued one for 35,000 tonnes.

On Aug. 1, government stocks amounted to 47.5 million tonnes, much higher than a target of 17.1 million for the current quarter.

The government lifted its four-year ban on wheat exports in September, but private shipments from the South Asian nation have picked up only in recent weeks as the rally in global prices and a weaker rupee made its wheat competitive.

India itself faces a drought itself that could hit output of some summer-sown crops.

Wheat futures on the Chicago Board of Trade (CBOT) hit a 17-month high last month, fuelled by concerns about crops in the Black Sea region and a strengthening corn market. (Editing by Jo Winterbottom and Jane Baird).

Source : in.reuters.com