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Iraq rejects Indian wheat -- Consignments found to be of poor quality

G. Chandrashekhar

MUMBAI, April 27

IRAQ has rejected two consignments of wheat shipments from the country on grounds of bad quality. Trade circles have confirmed that about 23,500 tonnes of wheat shipped from Mumbai port per Al Hamid (8,400 tonnes) and from Kandla port per Kuan Yin (15,10 0 tonnes) last month were rejected by the Iraqi Government inspection agency.

On receipt of the news of rejection, another vessel named Alegre after completion of loading 23,000 tonnes of wheat from Mumbai has not set on sail. There is one more ship waiting at Kandla and has not commenced loading because of the quality fiasco.

Both the rejected shipments were through the Government parastatal State Trading Corporation of India (STC) and were the first consignments of Indian wheat to Iraq. The business materialised after a good deal of suspense and negotiations.

It is learnt that the ships were not allowed to discharge the cargo as the quality was found to be poor with unacceptable levels of live insects (weevils), insect bored grains and impurities including foreign matter. Survey and certification at the India n end was done by a private surveyor.

Trading houses observing the market reported that the rejected material which was originally priced at around $140 a tonne was diverted as distress sale to a Dubai-based buyer at a low price of $102 per tonne.

This is seen as a loss of face for India as an emerging wheat supplier and could well jeopardise further export efforts. In the process, it has also exposed the inspection and quality certification methods in the country.

Rejection of wheat consignments by Iraq has raised serious questions over the future of Indian wheat exports and the combined role of shippers, superintendents and Government agencies through which exports are routed. The possibility of the projected 5 l akh tonnes wheat sales to Iraq could well be threatened after this event, according to observers.

The Centre is keen to liquidate burgeoning wheat stocks partly through exports and has fixed a target of 50 lakh tonnes for the current year. However, the Government does not seem to be concerned about the need to properly service the export market.

Government agencies such as STC, MMTC and PEC (through which exports have to be mandatorily routed) will surely have to bear some responsibility for quality of supplies and fulfillment of contractual obligation.