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Wheat harvest in India, the second- biggest grower, may reach a record for a sixth straight year after farmers increased use of high-yielding seeds and winter rains boosted crop prospects, a state-run researcher said.
Production in the year ending June may exceed 94.9 million tonnes harvested a year earlier, Indu Sharma, director at the Directorate of Wheat Research, said in a phone interview yesterday. The agriculture ministry predicts the crop to drop to 92.3 million tonnes this year.
A bigger harvest may prompt India to increase exports as it runs out of space to store the grain, potentially reducing global food costs, which fell for a fifth month in February. The country has approved shipments of 9.5 million tonnes from state reserves since July as inventories expanded, according to the food ministry. Futures slumped to a nine-month low in Chicago early this month on signs that expanding supplies will outpace demand amid concern that global growth will falter.
"The government is sitting on a huge stockpile and if the harvest is going to be better it is natural for the government to go for more exports," said Prasoon Mathur, an analyst at Religare Commodities Ltd. "If huge quantity is exported some pressure on global prices may be seen."
The contract for May delivery fell 0.3 per cent to $7.105 a bushel in Chicago at 4:07 pm in Mumbai. Futures tumbled to $6.5975 on April 1, the lowest for a most-active contract since June 20. The contract for May delivery on the National Commodity & Derivatives Exchange Ltd. rose as much as 0.8 per cent to Rs 1,417 per 100 kg ($26) and was at Rs 1,412.
Rising inventories
State stockpiles expanded 27 per cent to 27.1 million tonnes at the start of last month. The government plans to boost purchases from farmers to 44 million tonnes in the marketing year that began April 1 from 38.1 million a year earlier, the food ministry said February 19.
Farmers have begun harvesting in Gujarat and Madhya Pradesh states and yields look better than a year earlier, said Veena Sharma, secretary of the Roller Flour Millers Federation of India. Crop arrivals will accelerate in about 10 days as rains in some areas have delayed harvest, she said.
"High-yielding varieties and timely sowing by farmers in high production areas will help a harvest better than last year," Sharma said. "Effective and timely rains in February were good for the crop. The temperatures have been conducive."
Wheat exports from India were 4.03 million tonnes between April 1, 2012 and February 22, according to the food ministry.
