Andhra Pradesh southern state has cancelled bids made for two separate tenders by India's Adani Enterprises to supply imported coal as prices quoted were too expensive,  two state government officials said in a report.

A major government tender for imported coal has been cancelled for the first time in recent years due to excessive prices. There have been no previous reports on the cancellation. To solve a domestic shortage, India has requested utilities to increase coal imports. Imports, on the other hand, could exacerbate the financial troubles of state-owned, debt-ridden electricity distributors, which owe about USD15 billion to power generators.

According to the officials, Adani, India's largest coal dealer, proposed to deliver 500,000 tonnes of South African coal for 40,000 rupees (USD526.50) per tonne last month and another 750,000 tonnes at 17,480 rupees (USD 230.08) in January.

In the wake of an export embargo by Indonesia, benchmark South African coal prices FMFc1 began to soar in January, reaching a monthly high of USD 176.50 per tonne, before reaching a new high of USD 441.65 per tonne in March due to the Russia-Ukraine conflict.

“Both tenders were cancelled because the quoted prices were too expensive”, the officials said. Adani was the lone bidder for the 500,000-tonne tender, while Agarwal Coal, which also bid for the 750,000-tonne tender, quoted a higher price than Adani.

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