April 27, 2004

 

 

India's 2004 Wheat Production Seen At 73 Million MT


India's 2004 wheat harvest has been revised down to 73 million metric tons due to yield reductions caused by unusually high temperatures during the crop maturation stage, according to information from the U.S. Department of Agriculture's Foreign Agricultural Service web site.
 
High Pre-harvest Temperatures Temper Production
 
India's 2004 wheat production, which is currently being harvested, is revised downward to 73 million tons from Post's February forecast of 76 million tons because of the high temperatures during March and April in major wheat growing regions. The unusually warm weather at the crop maturation stage has reportedly caused a reduction in potential yields, ranging from 3% in the major surplus regions of Punjab, Haryana, and western parts of Uttar Pradesh to 15% in Bihar and eastern parts of Uttar Pradesh, where wheat is typically planted late, the report said.
 
The early-planted wheat crop in central India, however, remains mostly unaffected. The temperature-induced early maturation of the crop advanced wheat harvesting by almost two weeks and is likely to affect grain quality.
 
Government Procurement Likely to be Lower
 
The decline in wheat production is likely to adversely affect government wheat procurement, despite an initial surge due to the early harvest. The government has reportedly procured around 7.6 million tons of wheat up to April 15, 2004, compared with 4 million tons procured during the corresponding period of last year.
 
However, total procurement during this marketing year (Apr-Mar) is likely to be only 17-18 million tons against the government's earlier expectation of over 20 million tons. With the private trade showing very little interest, the government is buying most of the wheat arriving in the grain markets (mandis) in northern India at the support price of rs. 6,300 ($143) per metric ton.
 
Stocks Decline Sharply
 
Government wheat stocks declined sharply to 8.6 million tons on March 1, 2004, from 18.6 million tons a year ago. Stocks on April 1, 2004, are likely to be around 6.5 million tons, which although above the government's required minimum buffer stock level of 4 million tons, is the lowest since 1998. Lower stocks, combined with likely lower than expected wheat procurement should discourage the government from allocating large quantities of wheat for exports at subsidized prices, although the government is reportedly considering providing an allegedly WTO compatible subsidy to exporters.
 
MY 2003/04 Exports Surge
 
Although the government discontinued making fresh allocations of wheat for exports in August 2003, it continued to allocate large quantities against earlier contracts. As a result, exports during MY 2003/04 (Apr-Mar) reached around 6.4 million metric tons (including land movement to Bangladesh), against Post's earlier estimate of 5 million tons. On a July-June basis, exports in 2003/04 are estimated at 5.5 million tons. However, exports are forecast to decline sharply in MY 2004/05 for reasons explained earlier, namely lower government stocks and likely below expected procurement, the report said. Post continues to forecast MY 2004/05 exports at 2 million tons.

 

 

Source: USDA

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