May 25, 2011

 

India's wheat production to exceed estimate of all-time high 

 

 

India, the world's second-largest wheat producer, seems set to surpass its all-time high production forecast and the government is thinking exports, with procurement going beyond or hitting targets from major areas, officials said on Tuesday (May 24).

 

The government had estimated the wheat harvest to be around 84.27 million tonnes for this crop year through June 30, but the final output is likely to cross that figure by around two million tonnes, with key states reporting higher output.

 

Moves to lift a ban on wheat and rice exports from the country are likely to gather pace because of the bumper crop, providing relief to tight global supplies. Industry and trade representatives are pressing for exports of at least a couple of million tonnes of wheat and a decision is expected by June after the end of procurement.

 

"The food department is discussing the issue of exports. They will have to see the requirement for different programmes and other issues. Hopefully, they will come up with some proposal soon," Farm Secretary P.K Basu said.

 

He said that most states are expecting output to be higher than estimates, but added that a final output estimate will be compiled only after all the data from different regions comes in.

 

"Overall production is high and the crop was very good. The output will be more than 84 million tonnes," said R.K. Gupta, head of the Wheat Quality programme at the state-run Directorate of Wheat Research based in the northern town of Karnal, without giving a final output estimate.

 

Output in the key northern grainbowl state of Punjab alone will exceed initial estimates by more than one million tonnes and will reach 16.34 million tonnes, Balwinder Singh Sandhu, the state's agriculture director, said.

 

The state had initially estimated it would produce 15.4 million tonnes.

 

"Punjab had a procurement target for government stocks of 11 million tonnes and we will hit that by Tuesday (May 24) evening itself," Sandhu said, adding that the final procurement from the state was likely to be between 11.1 million and 11.2 million tonnes.

 

India has set a record procurement target of 26 million tonnes for 2010-11 and has already bought around 25.04 million tonnes since purchases began on March 15.

 

Wheat is usually sown from October and harvested from mid-March. The government procured 22.51 million tonnes of wheat last year when it produced a bumper crop due to good rains.

 

The central state of Madhya Pradesh, another key growing region, said procurement in the state had already crossed the initial target of 3.5 million tonnes and reached 4.2 million tonnes.

 

"I think Madhya Pradesh will procure around 4.5 million tonnes this season," said D.N. Sharma, agriculture director of Madhya Pradesh.

 

Farm Secretary Basu said that prices are at a very reasonable level and may go down if supplies rise.

 

Traders said wheat prices in the Madhya Pradesh market had dropped below the federal government's state-fixed purchase price of INR1,170 (US$25.87) per 100 kilogrammes to around INR1,050 (US$23.21) per 100 kilogrammes, despite the record procurement because of a flood of arrivals.

 

The Madhya Pradesh state government had offered an additional INR100 (US$2.21) per 100 kilogrammes as a bonus to farmers. Wheat prices were steady elsewhere.