Wheat, maize exports to remain globally competitive till June: NCAER report

The overall food sector will continue to show year-on-year increase of 9.5 per cent in prices till February

Sanjeeb Mukherjee New Delhi
Last Updated : Feb 16 2013 | 10:20 PM IST
Amid rising foodgrains stocks, there is some good news, as a recent report has indicated that India’s wheat exports are expected to remain competitive at least till July 2013 giving the government a good opportunity to liquidate its grain inventories and create storage space.

Export of maize is also expected to remain competitive in world markets because of low global supplies, but poor domestic production might crimp any sharp surge in overseas sales.

According to the Quarterly Agriculture Outlook Report prepared by National Council of Applied Economic Research (NCAER) for the department of agriculture, the country’s competitiveness in international sugar market will be under pressure due to low global production, high domestic prices and increasing sugarcane prices.

India’s foodgrain stocks as on February 1, 2013 is estimated to be over 65 million tonnes, more than double the required quantity because of consecutive years of bumper wheat and rice harvest.

Experts believe that unless the government manages to quickly liquidate its inventories, foodgrains stocks might reach a whopping over 90 million tonnes by June 1, 2013 as wheat procurement for 2013-14 is expected to commence from April 1. “On a July-June basis, wheat exports could reach around 7 million tonnes,” the report said.

It, however, said that India’s rice exports are likely to tempered in 2013 because of low domestic exportable surplus and burgeoning stocks in Thailand, which could prompt Thailand to release supplies and promote exports to regain its lost spot as the world’s largest rice exporter. India dislodged Thailand as the world’s largest rice exporter in 2012 and shipped almost nine million tonnes of the cereal. (FOODGRAIN BASKET)

“Efforts  to achieve self-sufficiency in rice production through tariff and non-tariff barriers by major importing countries like Nigeria, Iran and Indonesia in the coming years could also negatively impact India’s rice exports,” the report said.

In other crops, the report prepared by NCAER under the government’s National Food Security Mission said that field pea (mutter) imports would be difficult for India because of increased demand from feed supplies in France, one of India’s major supplier.

Prices of chickpea (chana) are also expected to remains firm because of low carryover stocks.

On vegetable oil imports, the report said that exports will continue to rise as Malaysia and Indonesia will continue to push large quantities of palm oil into India to clear their stockpiles.

This could result in a dip in prices, but could be detrimental to Indian processing industry. Already, according to the latest data, from Solvent Exporters Association of India (SEA), India’s edible oil imports in January 2013 went up by a staggering 75 per cent to 1.15 million tons compared to last January.

“There is contrasting production performance between India and the world in wheat, rice and sugar (domestic production is more in wheat but less in rice and sugar as compared to world output in 2012-13) which would present policy challenges and opportunities for the government,” the report said.

On the price trend in domestic markets, the quarterly report said that overall food sector Wholesale Price Index-comprising non-processed and processed food items - will continue to show year on year increase of 9.5 per cent till February 2013. After which there could be some moderation.

It said that India’s foodgrains production in 2012-13 is expected to be around 245.5 million tonnes, as against last year record output of 257.4 million tonnes, a fall of 4.6 per cent.

“The production will fall as a result of decline in rice production from 104.3 million tonnes to 99 million tonnes, while coarse grains output is expected to fall from 42 million tonnes to 37 million tonnes,” the report said.

The government's official second advanced estimate for foodgrains production released earlier this month had pegged foodgrains production in 2013-14 to 250.14 million tonnes, down from last year’s production of 259.32 million tonnes.

On a commodity level, the report said the high rates seen in pulses and sugar is expected to continue in the coming months as well, but there might be some decline in the short-term. Potato prices are expected to be lower till April 2013, the report said.

“Production of selected vegetables and fruits crops, potato, onion and banana is expected to remain unchanged in 2012-13 crop year that started in July or increase marginally, while production of milk is expected to rise by 3.5 per cent to 131.18 million tonnes,” the report said.

It said though ample stocks of grains with the government and strong Rabi sowing provide a positive outlook for domestic supplies, but the price scenario remains an area of concern.

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First Published: Feb 16 2013 | 9:45 PM IST

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