KARACHI, Aug 2: The Trading Corporation of Pakistan has rejected all bids in an import tender for 500,000 tons of wheat because bidders had placed conditions on the supply of the grain, a senior official said on Monday.

TCP chairman Masood Alam Rizvi said the bids were rejected because sellers had place conditions on "specification and inspection and arbitration" for the supply of wheat. "We have told them that Pakistan will not agree to any conditions," he said.

Mr Rizvi said the TCP planned to issue a new tender for the same amount possibly by Tuesday, which would close on August 7. In the current tender, US supplier Cargill was the lowest bidder, at $206 per ton, but Mr Rizvi said it had not fulfilled key tender conditions, without elaborating.

Pakistan's wheat harvest for this marketing year ending March 2005 has concluded, with production falling to 19.7 million tons, below a targeted 20 million tons, forcing the country to make plans to import one million tons of wheat. Wheat is planted in October and harvested in April.

The TCP chief said the plan to issue a new tender for 500,000 tons was likely to be delayed because the corporation needed to finalize the first tender. Wheat prices rose at the start of the season as production fell below target last year, leading to lower stocks.

The rejection of Australian wheat in a tender earlier this year due to quality concerns further exacerbated the supply situation, traders said. The Pakistani company supplying the Australian wheat has launched a legal bid to seek damages from the government for rejecting the wheat.

The US Department of Agriculture said in its last estimate that Pakistan's wheat production might decline to 19 million tons and the country might need to import 1.5 million tons to maintain higher stocks. -Dow Jones Newswires