May 25, 2005

India's wheat output forecasts lower

A lower than anticipated wheat output and a drop in procurement by local agencies are pushing up Indian wheat prices but the country has yet to decide if it will import grain this year to meet its needs.

Wheat production forecasts for this year has been narrowed to around 73 million tonnes, about a million tonnes lower than earlier estimates because of non seasonal rains and hailstorms during the flowering season in February and March.

D.P. Singh, chairman of the All India Grain Exporters Association says that wheat crop for the year may not even reach 70 million tonnes with the current levels of procurement and market arrivals of wheat.

Some traders say wheat will likely need to be imported for the southern states which do not produce much themselves. In the main wheat growing regions of the country like Punjab, Haryana and central Madhya Pradesh, harvesting is almost complete and grain arrivals are picking up in the market.

Procurement of wheat by state-run agencies is likely to be 16.5 to 17 million tonnes, lower than earlier estimates of 18 million tonnes because of a lower crop. State-run agencies procured 16.8 million tonnes of wheat in 2004.