April 27, 2010

India's wheat futures lower on projected supply surge

India's wheat futures were lower on Tuesday (Apr 27) on pressure from hopes of a good monsoon as well as higher inventories, but government procurement limited losses, according to analysts.

The monsoon is likely to be normal this year, allaying fears over an event crucial to the economic fate of the world's second-most populous nation, analysts said.

The country's state-run firms have so far procured 18.01 million tonnes of wheat in the 2009/10 marketing season that began in April, compared with 17.68 million tonnes a year ago, according to a government release.

Prices in the spot markets have risen about 7% since April, when procurement began.

India's wheat stocks on April 1 stood at 16.1 million tonnes against the target of 4 million tonnes, government sources said. India, the world's second-biggest wheat producer, expects a strong harvest this year, with output likely to exceed demand for the fourth consecutive year.

India is estimated to produce about 82 million tonnes of wheat in 2009/10.