MUMBAI, Jan 29 (Reuters) - Wheat futures in India, the world’s second-largest producer of the grain, fell on profit-taking on Tuesday but are likely to rise this week on strong demand from exporters amid limited supplies.
“Attractive overseas prices, surplus availability in the country and the government’s decision to allow unrestricted exports have boosted prospects of higher exports from India. And it is supporting the prices in local market,” said Prasoon Mathur, senior analyst with Religare Commodities.
The key February contract on India’s National Commodity and Derivatives Exchange (NCDEX) rose nearly 4 percent in the previous five trading sessions.
Demand for Indian wheat, particularly in Southeast Asian countries, is very strong due to concerns over dry weather in the United States and lower harvesting in Australia, both key suppliers of the grain, traders said.
At 0808 GMT the key March contract on CBOT was trading down 0.1 percent at $7.78-1/2 per bushel.
The most traded February contract on the NCDEX was trading 0.45 percent down at 1,560 rupees per 100 kg (around $7.6 per bushel).
Traders expect wheat prices to recover either later in the day or in the next session, and touch 1,600 rupees this week on aggressive buying by exporters.
Indian wheat is being offered at about $325-$330 per tonne CIF (cost, insurance and freight) in Southeast Asian countries, while Australian wheat is available for $350 per tonne.
Wheat shipments from India usually fetch lower prices due to concerns over pest infestation and bacterial infections.
Last week, the government-run trading firm State Trading Corp got the highest bid at $314.34 a tonne in its latest wheat export tender. ($1 = 53.9050 Indian rupees) (Reporting by Deepak Sharma; Editing by Jijo Jacob)