February 16, 2010

India's 2009-10 wheat output to fall 7.5% on-year

India's wheat output is expected to drop marginally in the fiscal year ending March to 80.28 million tonnes, the federal Agriculture Ministry said Friday (Feb 12, 2010), contrary to its earlier expectation of a rise in the winter-sown grain.

India, the world's second-largest wheat producer, had a bumper harvest of 80.68 million tonnes in the year ended March 2009.

The federal government was hoping that late rains would help to exceed last year's output of the winter-sown grain by two million tonnes and offset some of the damage to summer sown crops from the worst drought in nearly four decades.

The total foodgrain output is likely to fall 7.5% on-year in the current fiscal year to 216.85 million tonnes, the food ministry's latest crop estimate said, signaling that there would be no relief from high food prices in Asia's third largest economy.

The dip in wheat output is expected despite a rise in the area under the wheat crop to 27.76 million hectares till Feb 4 from 27.58 million hectares a year earlier, government data showed. Wheat sowing usually starts in November and the crop is harvested from March.

"The soil moisture in the main wheat growing belt of north and northwest has been inadequate, which is likely to affect productivity," Ajeet Kumar, a Delhi-based analyst with SMC Global Securities, said. Rains have been lower in these parts compared with the rest of the country.

According to Kumar, India's winter-sown rice has gained from late rains. The government estimated that the winter-sown rice output would increase to 14.69 million tonnes from 14.27 million tonnes a year earlier.

The government revised upwards its earlier estimate of summer-sown rice harvest to 72.87 million tonnes from 71.65 tonnes. The total rice output for the year ending March 2010 is now expected at 87.56 million tonnes compared with 99.15 million tonnes a year earlier.

The second estimate showed a drop in oilseeds production to 26.32 million tonnes from 27.71 million tonnes a year earlier. Pulses output in 2009-10 is expected to rise marginally to 14.74 million tonnes from 14.57 million tonnes a year earlier.

"On the price front, (these) figures don't change the scenario. It is pretty much what it was," Jayant Mangalik of Religare Commodities said.

He said that the country was unlikely to import grains immediately, despite the drop in foodgrains output as government stocks are comfortable.