November 22, 2005

India might not need to import wheat

India's largest grain procurement agency, Food Corp., said the country did not need to import wheat due to adequate stocks and stable prices.

Traders have been expecting India to import wheat for the first time in six years as grain agencies were making lower procurements. The country has been a wheat exporter in recent years.

Food Corp.'s chairman, V.K. Malhotra, said that as of Nov 18, government agencies had 8.1 million tonnes of wheat and 11.6 million tonnes of rice. If 1.5 million tonnes of wheat were consumed each month, India would be left with "at least 1 million tonnes in April."

In 2006, India was expected to achieve a good wheat harvest due to lots of soil moisture, following widespread monsoon rains in September this year.

Wheat is sown during November and December each year in India, and harvesting begins in April in Punjab and Haryana states. Both northern states are main wheat growing regions.

Meanwhile, Food Corp. hoped to buy about 19 million tonnes of wheat in 2006, up from about 15 million tonnes it bought this year.

Each month, the agency supplies about three million tonnes of grains to needy states. It also buys about a quarter of India's total wheat production.

India's farm ministry has forecast 2005 wheat production at 72.1 million tonnes, almost the same as the 2004 output but lower than initial estimates of 75 million tonnes. This was because untimely rains and hailstorms had caused some crop damage.

Meanwhile, Malhotra said wheat prices were stable and prices of wheat products such as bread and biscuits "have also not gone up."