May 4, 2022

 

Heat wave threatens India's wheat production and exports

 

 

Wheat production in India is expected to decline in 2022 after five years straight of record harvests, due to temperatures sharply rising in mid-March slashing crop yields, Reuters reported.

 

The drop in output could affect wheat exports from the world's second-biggest producer of the grain. India shipped a record 7.85 million tonnes in the fiscal year to March, 275% higher compared to the previous year thanks to soaring worldwide wheat prices.

 

Traders and government officials saw an opportunity to ship 12 million tonnes in the current 2022-23 fiscal year, as they projected another record crop production.

 

The government said in mid-February, before the sharp rise in temperatures, that they expected to harvest 111.32 million tonnes of wheat, an all-time high compared to 2021's 109.59 million tonnes.

 

An official note seen by Reuters showed the government could slash output estimates to 105 million tonnes this year.

 

Data from the India Meteorological Department showed the country will have its warmest March in 122 years, at 33.1°C, nearly 1.86°C above normal.

 

Rajesh Paharia Jain, a New Delhi-based trader, said after the heat wave, India may only export around 10 million tonnes of wheat. 

 

Other traders said there could be a 10% decline in production because of the warm weather.

 

The India head of global trading firm, who declined to be named, said production could be 10% down to around 100 million tonnes this year, adding that the government may limit exports if output drops lower.

 

Before global wheat prices soared to record highs, exports were unattractive as prices paid by the state-run Food Corporation of India (FCI) to farmers were higher. But now private traders are purchasing wheat from farmers for export.

 

Official data showed FCI bought 31% lower wheat this year compared to 2021, suggesting that there are more wheat sales to private traders for export and a drop in crop production.

 

-      Reuters

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