India closes biggest wheat import deals in a decade

500,000 tons of Australian wheat set for delivery, and another 500,000 could come from France, Russia

Indian flour millers and global trading companies have closed deals to import 500,000 tons of Australian wheat since March, according to a report. This is the biggest amount in more than a decade, despite surplus stocks in India.

Millers first placed the orders in India’s southern ports over concerns that February and March rains could cut wheat output, especially the high-protein varieties used to make pizzas and pasta. Attractive prices — $255 to $275 per ton — then prompted Cargill, Louis Dreyfus and Glencore to follow.

Indian traders and millers could import another 500,000 tons from France and Russia, pushing up benchmark prices that have risen recently on concerns over crop quality in the U.S. On a free-on-board basis, French and Russian wheat is priced between $185 and $190 per ton.

High-protein wheat in India costs more than $300 per ton, and imports could slow if prices drop below $285.

India, the world’s second-largest producer and consumer of wheat, has large stockpiles of the grain after eight consecutive years of bumper harvests. This year’s wheat output for India is estimated at about 90 million tons, which is 5 percent lower than in 2014, but still exceeding domestic demand of 72 million tons.