New Delhi: India has agreed to extend a 15-year credit-line to Sri Lanka for export of three-lakh ton wheat annually, but Colombo has put a condition that the grains be routed through five multinational companies (MNCs).

It is also insisting on changes in terms of credit.

An agreement was reached for export of three lakh ton of wheat in 2001, but the line of credit has been firmed up this month when a Sri Lankan delegation visited India. The wheat will be sold at Rs 4,250 per ton, fixed by Food Corporation of India (FCI) for exports, but handling charges will be added.

"India will extend 15 year credit facility to Sri Lanka for wheat export and wants Nafed to be the nodal agency. But the sole miller there, Prima, wants five MNCs to be part of the deal," official sources said.

They said that Singapore based Prima which has a monopoly over milling wheat in Lanka wants Concordia, Cargill, Louis Dreyfus, Mitsubishi and Agricorp to be designated as agents for selling the wheat to the island besides Nafed.

Sri Lanka also wants changes in the terms of credit, deviating from the accepted norms including credit for the Free on Board (FoB) value of the entire quantity instead of the usual practice of 90 per cent.

Normally the credit line is for three years, but India in this particular case has agreed to a 15-year period.

Further they want the delivery should be on Cost, Insurance and Freight basis and not FoB so that onus of making shipping and delivery arrangements is also on the exporter.

In case delivery is not made according to a predetermined schedule, corresponding deductions can be made from the dues of the buyer, is their contention.

PTI