Can Wheat Doubly Benefit India?
India has had a healthy grain production for the last few years. As a step to show its influence, it has already committed to donate around 1.1 million tonnes of wheat to Afghanistan, where India is showing its influence in West Asia. On the other hand, India is already indulged in maritime surveillance activities in Gulf of Aden and Ethiopia has come up with the demand of four lakh metric tonnes of milled wheat tender open. Can India try its luck to build strategic relationships with agrarian superiority?
Sometimes, international strategic relations are at the core of trade. For instance, India had already sent its first lot of one lakh tonne wheat to Afghanistan, as a gesture of support and friendship towards a war-torn nation. India also has its strong presence in maritime surveillance in the Gulf of Aden, it has come up with the accomplishment of the first operational phase of Chabahar port in Iran. It is the same port used to send wheat consignments to Afghanistan.
With a long time maritime security record in the Gulf of Aden, India does have strong strategic terms with many of the nations who trade via the route of Aden’s gulf. This time in the late October Ethiopia, another poor nation had opened up a tender for 400,000 metric tonnes of milled wheat for its government’s bread subsidy program. A report from foreign agriculture service of US department of agriculture says, ‘In late October, Ethiopia announced another tender for 400,000 metric tons of milling wheat. An equal sized tender was issued earlier in the month. Bids are due by November 28 and delivery is expected early next year. Based on past experience, Post expects most of this wheat will be sourced from the Black Sea region’.
The original tender publication was for 200,000 metric tons of milling wheat, but this amount was subsequently increased to 400,000 metric tons. This new amount is evenly divided into four separate lots of 100,000 metric tons. Bids are due by November 28 and delivery is expected early next year. Like most GOE wheat purchases in the past, this wheat will likely be sourced from the Black Sea region since it is generally the least expensive on the international market. Now, with the better production of wheat and a friendly grant of more than 1.1 million tonnes of wheat to be given to Afghanistan, India may also position itself as a new star in Aden’s gulf with a relatively low offer price of wheat to Ethiopia. This may open up new doors of opportunity in the region where India is looking for options to show its role of emerging agrarian superpower.
The world wheat market:
According to local press reports, several offers are under consideration, with the offers ranging from a low of USD 278 to a high USD 302 per metric ton. Ethiopia had imported around 850,000 metric tons of wheat this year, based on Port of Djibouti shipping data. This amount includes at least 150,000 metric tons of U.S. wheat food aid, valued at nearly USD 28 million.
It is time for India to boost its strategic strength with the help of its superiority on the agrarian front. As Ethiopia is looking at black sea for a low price wheat purchase and India is capable to trade its wheat at low prices, will the government look for this opportunity?
