Wheat output seen up; imports to come down

Harvest may rise to 75.5 mn tonnes, up from 74.89 mn tonnes.

The country, world's largest wheat consumer after China, may reap its biggest harvest in seven years after favourable weather and increased planting, easing pressure on the government to import the grain for strategic reserves.

The harvest from March to April may rise to as much as the government target of 75.5 million tonnes, up from 74.89 million tonnes last year, B Mishra, head of the Directorate of Wheat Research, a state body that develops high-yield seeds, said in an interview yesterday.

The bigger crop would reduce the need to buy wheat overseas at prices that have almost doubled in the past year, reaching a record $10.095 a bushel on December 17.

It may also take some pressure off global supplies, which the US government forecasts will drop to 110.9 million tonnes by May 31, the lowest in 30 years.

"Imports are going to fall definitely because of higher production,'' Vijay Iyengar, managing director of Agrocorp International, said in a phone interview from Singapore. "The government may buy some quantity for its buffer stock.''

The area under winter-sown wheat, used to make flat bread and biscuits for the population of 1.1 billion, was 5 per cent more than normal so far at 27.5 million hectares (68 million acres), Mishra said yesterday. Harvesting begins in March.

"The crop area has risen in the high-yielding states and the temperatures have been favourable so far for the crop,'' Mishra said by phone from the northern Indian city of Karnal. "That will boost overall wheat production in the country.''

The country's wheat production is forecast at 74.9 million tonnes in the year ending March 31, compared with record consumption of 75.9 million tonnes, according to a US Department of Agriculture report on January 11. Imports in the year to June 30 may fall to 2 million tonnes, less than a third of the previous year, it said.

"Night temperatures across the main areas in northern India were congenial and helped in the growth of the crop'' S S Singh, principal scientist at the Indian Agricultural Research Institute, said by phone from New Delhi. India's average temperatures in December at 17-18 degrees Celsius were better than the previous year.

The favourable weather must hold up for the next two-and-a-half months for the production target to be met, Wheat Research's Mishra said.

"I don't think there is any reason to be complacent because everything depends on the weather,'' said Avinash Raheja, senior vice president at Commtrendz Risk Management Services in Mumbai. "We need to watch the temperatures.''

State reserves
The country may still import wheat to boost its reserves, farm minister Sharad Pawar said last month. A ministerial panel will decide by January 18 if imports are required this year.

The government needs one million tonnes a month to distribute to the poor. Reserves at state warehouses totalled 9 million tonnes on November 23, Food Corporation of India said last month. Stockpiles may total 5.5 million tonnes by April 1, more than the 4 million tonnes needed for emergencies, because of recent imports, it said.

The government, which has imported 1.79 million tonnes since July, last month cancelled a tender after balking at high prices quoted by traders including Cargill.

Wheat for March delivery fell as much as 16 cents, or 1.7 per cent, to $9.01 a bushel in after-hours electronic trading on the Chicago Board of Trade. The commodity traded at $9.05 at 2:25 pm Singapore time.

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BUMPER CROP

The harvest from March to April may rise to as much as the government target of 75.5 million tonnes, up from 74.89 million tonnes last year

According to the US Government, global supplies will drop to 110.9 million tonnes by May 31

India's rabi acreage of wheat is likely to go up by 5 per cent to 27.5 million hectares

Imports in the year to June 30 may fall to 2 million tonnes, less than a third of the previous year