August 7 2012 (Business line)

Right time to clear old wheatstocks

The Governments (GoI) initiative to bring down burgeoning wheat stocks in the central pool through exports, is in its first stage of implementation.Three tenders for the export of approximately 0.25 million tonnes of milling wheat- opened last week (August 3) by public sector undertakings, PEC/STC/MMTC - met with an excellent response.There was expression of open interest of 1.27 million tonnes from international buyers, with quotes around $300/ tonne (f.o.b) Rs 16,800 for 2012-13 crop, from the west coast of India. This price is on a par with Russian wheat.Significant volume of open interest indicates foreign buyers keenness to trade Indian wheat. Hopefully, tenders will be awarded soon. Additional bidding is also notified for approximately 0.14 million tonnes of milling wheat of 2012-13 crop from the east coast in the third week of August.However, the old crop has not been offered for evacuation. There is a problem here: Two or three years later, the CAG or Parliament committees may comment adversely on why GoI exported only good milling wheat of the latest crop, and wonder why the old crop stocks of 2008-09-10-11-12 were held back, or extended for local distribution in PDS. This old crop has greater chances of deteriorating vis--vis the newer lot. It would be a travesty of truth, if authorities were to claim that there was no decline in quality of the older cereals, stored unscientifically.Estimates of old crops with central pool vary between 12-14 million tonnes.

There is demand, despite the downturn T. E. RAJA SIMHAN

I do not think the industry is going to be constrained by demand. Customers expectations are going up. We are, in fact, adding processes. Som Mittal, President, Nasscom, has a tough job on hand. He needs to promote the interests of the information technology industry in the backdrop of global economic uncertainty, high US visa rejection and increasing pressure on quarterly numbers. However, he is confident that the industry, with its strong fundamentals, will be able to weather the current economic turmoil. At the Nasscom HR Summit held in Chennai recently, Mittal spoke to Business

Line on issues concerning the industry. Today, there are companies growing
faster than that. Some have given a lower guidance, but we feel that one quarter is a dot and two quarters is a straight line. We need at least three quarters to arrive at a trend. We can review the numbers in October, by which time the trend from three quarters will be available. We have resolved the visa issue with Australia, the UK and Switzerland. When there is a downturn and there is local unemployment, visas become an issue. We have been successful in conveying the message that we are a part of the solution and not the problem. Today, globally, there is a shortage of STEM (science, technology, engineering and mathematics) people.Given the economic uncertainty, the visa issue will certainly be an area that we need to continue to work on. The rejection rates and the interpretation of laws are as much applicable to American companies that use the same model as Indian companies. Recently, on the visa rejection issue, 70 American companies sent a letter to the American President, and they were not IT companies, but majors such as Ford and Caterpillar.