INDIA, the world's second-biggest wheat consumer, scrapped a tender to buy 350,000 tons of the grain after balking at higher prices amid expectations domestic production will be the highest in seven years.

"Prices are too high," India's Commerce Secretary G.K. Pillai said in a phone interview with Bloomberg News in New Delhi yesterday. "We will take a decision on importing more wheat after the next wheat crop."

The country should meet an output target of 75.5 million tons, the most since 2000, the farm ministry said on December 18.

India, importing wheat for a second year to boost state reserves, may wait a few months before issuing a new tender as it expects prices to fall. Wheat rose above US$10 a bushel in Chicago for the first time on December 17 after concerns dry weather in Argentina, the world's fourth-biggest exporter, will shrink global supplies.

"We may not import wheat as of now," Pillai said.

Government-owned State Trading Corp on December 17 got bids from Glencore International AG, Cargill Inc and Toepfer International to supply 330,000 tons, less than the 350,000 tons it had sought, at US$460 a ton to US$570 a ton, a government official said.

India paid an average US$396 a ton for 150,000 tons on December 7.

The country, the biggest wheat user after China, has imported 1.79 million tons since July, helping support the near doubling in prices this year on the Chicago Board of Trade.

The cancellation of the tender may lead to a decline in global prices of the commodity, said Kishore Narne, head of research at Anand Rathi Commodities in Mumbai.

"The scrapping of the tender should lead to a price correction of as much as 70 cents in the international market," Narne said. "But we believe India may have hedged their position in the international market."

India's farm minister Sharad Pawar said local supplies of the grain would determine the extent of imports.