February 24, 2009
India wheat stocks overflowing on record purchases
India must empty its warehouses to make space for grain that will be bought from farmers starting April 1, after record purchases bloated granaries.
India has a storage problem this year, Agriculture Minister Sharad Pawar said.
Growing stockpiles may prompt the government to lift a three-year wheat export ban, which could weigh on CBOT prices that have declined over 50 percent in the past year.
Pawar on Friday (Feb 20) said the government will decide in the next 10 days whether to lift the export ban or not.
Warehouses held 18.2 million tonnes on January 1, more than the 8.2 million tonnes required to meet shortages, Junior Food Minister Akhilesh Prasad Singh said. India's central pool held 16.76 million tonnes of wheat on February 1.
The government had bought 22.68 million tonnes of wheat as of February 16. The government will also pay Rs1,080 for 100kg for new arrivals starting April 1, up from Rs1,000, to help increase farmers' income.
India's wheat production may total 77.8 million tonnes, compared with the initial September target of 78.5 million tonnes, the agriculture ministry said.
India harvested a record 78.6 million tonnes last year.
US$1 = Rs49.6522 (Feb 24)
