March 23, 2006

Australia's AWB expects increased wheat demand from India

India will need to import more wheat in 2006 to make up for an expected downturn in domestic production, Australian wheat exporter AWB Ltd said Thursday (Mar 23).

Wheat production in India in 2006 could fall to 70 million tonnes, if local reports are to be believed, down from an original forecast of 75 million tonnes, and down from a current official projection of 73 million tonnes, Michael Vaughan, AWB's manager in Australia's New South Wales state said.

The fall in production from the crop due to be harvested April through June reflects the impact of a heat wave in February, he said.

"This will lead to further imports in 2006, which will be a positive development for the market," Vaughan said in a regular weekly column in The Land farm newspaper.

In February, the Indian government approved the import of 500,000 tonnes of wheat from AWB at a price of around USUS$179/tonne including carriage and freight, marking the first time in six years India has imported wheat.

The wheat was expected to start arriving in India late march.

AWB has almost 18 million tonnes of wheat to export from a bumper Australian crop harvested mostly in November and December.