December 19, 2024

Rising winter temperatures in India may impact wheat yields

The IMD stated that both minimum and maximum temperatures across the country are likely to remain above normal from December to February, with a lower incidence of "cold wave days" expected.

Winter-sown crops, such as wheat, rapeseed, and chickpeas, are typically planted between October and December. These crops require cooler weather during their growth and maturity stages to achieve optimal yields.

Concerns are growing that reduced production could compel India, the world's second-largest wheat producer after China, to import the staple crop. Such a move would be aimed at ensuring affordable supplies for the country's population of 1.4 billion people. Additionally, India may need to increase imports of pulses and edible oils to meet domestic demand.

Despite record-high wheat prices, the Indian government has so far resisted calls for imports, preferring to avoid upsetting local farmers. However, the importance of temperature as a determining factor for wheat yields has become increasingly apparent in recent years.

A trader based in Mumbai with a global trade house noted that unseasonably warm weather significantly impacted India's wheat output in 2022 and 2023, resulting in a sharp depletion of state reserves.

Last week, wheat prices in Delhi reached a record INR 32,000 (US$376.24) per metric tonne, compared to INR 25,000 (US$293.94) in April. These prices are significantly higher than the government-set minimum support price of INR 22,750 (US$267.48) for the previous season's crop.

To address rising prices and improve supplies, India plans to sell 2.5 million metric tonnes of wheat from its state reserves. This initiative aims to provide relief to bulk consumers, including flour millers and biscuit manufacturers.

-      Reuters