May 5, 2004



Rains Dampen Indian Wheat Export Prospects


Some key growing regions in India have been hit by unseasonal rains. Indian wheat quality could be affected, which in turn, might dent the country's export prospects, traders and officials said on Monday.


However they said the size of the crop was unlikely to change from earlier estimates of 73 million tons, because harvests have been completed or are underway in most growing regions.


According to Jag Shoran, head of the state-run Directorate of Wheat Research, "The crop has suffered damage in areas where the harvest was still going on, and in markets where grains were lying in the open". 


India's wheat crop has been hit by unusually hot weather in March, and heavy rains in April this year.


India's production of wheat, grown in November-December and harvested in March-April, fell to 65.1 million tons in 2003 due to the worst drought in 15 years.


On the other hand, the area under wheat crop this year had risen to more than 27 million hectares (67 million acres) from 24 million last year, because of good monsoon rains and excellent weather during the sowing season.


Shoran said the grains lying in the open will become lustre-lost, but will still be fit for human consumption. Good sunshine is needed for three to four days in order to contain the damage.


The worst hit areas are India's largest wheat producing northern state of Uttar Pradesh and eastern Bihar, where wheat harvesting is done in May.


There was not much damage in Punjab and Haryana, states that produce surplus grains. "In Punjab and Haryana, there is no danger because most of the wheat has been sold and stored in silos," he said.


Traders said the country would still have surplus grains for exports because India consumes around 55 million tons annually. But selling lustre-lost wheat would be difficult.


"One cannot fetch the prevailing market price for poor quality grains, and the government will have to give a subsidy for exports -- which is unlikely," a leading Ahmedabad-based trader said.


India gave subsidies to export wheat and rice a few years ago. That was because stocks were growing and becoming unmanageable after successive bumper harvests.


The country stopped issuing grains to traders last August, after stocks fell due to robust exports and a drought in 2002.


"The Government is under no pressure to export, so they will not give any subsidy," a New Delhi-based exporter said.


On April 1, the country's wheat stocks stood at six million tons. This is in comparison with 15.6 million tons in April 2003, and 26 million tons in 2002.

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