April 7, 2011

India seen to harvest record grains

India's forecast of record grain output in 2011 may prompt the government to allow wheat exports, Farm Minister Sharad Pawar said on Wednesday (April 6).

Junior Farm Minister Arun Yadav last month said the country may lift a four-year ban on the export of grains.

Pawar, a key member of a panel of ministers headed by Finance Minister Pranab Mukherjee on food, has favoured overseas sale of farm products like sugar to keep funds flowing to mills to ensure timely payments to cane growers.

India's wheat harvest is seen at 84.3 million tonnes in 2011, higher than the previous forecast of 81.5 million tonnes and last year's output of 80.8 million tonnes.

"The government of India has to take a serious thought on storage, allocation to states and exports," Pawar said, while releasing the latest food grain forecast for the current crop year to June.

India's food grain output is set to reach an all-time record of 235.88 million tonnes in 2010/11 helped by the highest-ever output of wheat and pulses, he said. The latest production forecast is 1.6% higher than the previous year's 232.07 million tonnes. India's crop year runs from July to June. Analysts said the higher grain output forecast would help the government to allow wheat exports at a time when the country's food inflation has eased.

"The record production is expected to expedite overseas sale of wheat," said Veeresh Hiremath, research head of Hyderabad-based Karvy Comtrade, a commodity brokerage.

Last week, a senior government adviser said the prospect of a good winter harvest was expected to cool food prices.

India's food inflation eased to 9.5% in the year to March 19, data released last Thursday (March 31) showed, from 10.05% in the preceding week.