This year, flour mills in south India are looking to Pakistan for wheat supply as domestic prices are not showing any sign of decline.
And Pakistani wheat is all set to make an entry into the country through Tuticorin port in Tamil Nadu by April 24.
According to mill owners in Tamil Nadu, about 200 containers (18 tonne each) totaling some 3,600 tonne of wheat are expected to reach the port.
Roller flour mills in south India are importing the consignment from Pakistan as they find it cheaper than buying it from the domestic market.
If indications in the market are anything to go by, about 14,500 tonne of wheat would be imported from Pakistan. The import price of Pakistani wheat is Rs 9,400 a tonne c&f.
All the consignments are set to come by container and shipments are expected to continue till May-end. Offers from Russia are at Rs 9,950 a tonne c&f ; but many expect the prices to decline by July when the new Russian harvest begins.
Millers said that it makes sense for them to buy from Pakistan since port-based mills can get the wheat at their gates for around Rs 10,700 a tonne. For mills away from the ports, the cost could be Rs 11,200.
On the other hand, given the minimum support price of Rs 850 a quintal for domestic wheat, it would cost the mills in south India Rs 11,500 at their gate.
Tamil Nadu Roller Flour Mills Association office-bearers said since the Centre had raised the minimum support price to Rs 850 a quintal, it was unlikely that the mills in the south would get domestic wheat at a lower price.
In New Delhi, wheat was quoted on Friday at Rs 960-962 a quintal, up Rs 2 from Thursday's close. Wheat prices, which looked like dropping last week, have looked up this week on slow arrivals and demand from flour mills.
Wheat arrivals are slow as farmers have resorted to manual harvest to take advantage of higher prices for straw. Manual harvest will help them to sell straw in the market, which now rules at Rs 5 a kg against Re 1 a kg last year.
This year, wheat production is expected to be 73.7 million tonne against 69.35 million tonne last year.
Pakistan, on the other hand, is expected to harvest a record 23 million tonne crop and it is projected to have four million tonne surplus for exports.