Despite record wheat crop, Indian will need imports

04.05.2017

Indian will see a record wheat harvest this year, thanks to good weather conditions and large sowings, US officials said, but rising production will not be enough to meet local demand.

The US Department of Agriculture's bureau in New Delhi raised its forecast for the 2017-18 wheat crop, citing "higher than earlier anticipated yields due to the favourable weather conditions during the late crop development".

Despite the massive crop, India is seen remaining a net-wheat importer, after stocks were sharply depleted in the preceding marketing year, and a long-term growth in consumption.

Yield hopes improve

The wheat crop is nearly completed in the country's breadbasket states of Punjab and Haryana, and across most of Uttar Pradesh.

As well as cool weather, with intermittent rainfall, the bureau noted reports of lower incidences of pests and disease.

And there have been no reports of crop damage from hail or rain in the main growing states.

As a result, the bureau lifted its forecast for the 2017-18 harvest by 1.5m tonnes, to 96.5m tonnes, which would be a rise of 9.5m tonnes year-on-year.

The International Grain Council last month forecast Indian wheat production at 95.5m tonnes.

Imports remain heavy

But despite the huge harvest, India will remain a net wheat importer, although the bureau trimmed its ideas for imports by 1.0m tonnes, to 4.0m tonnes, down 2.0m tonnes year-on-year.

Exports were seen flat year-on-year, at 400,000 tonnes.

In fact, even with the record production, local demand will outstrip supply by 3.3m tonnes, suggesting India's days as a wheat exporter are done, unless production can grow further.

The bureau noted that its import forecasts assumes that tariffs remain at their current 10% level.

"Media sources report that the government is concerned about imports of lower priced foreign wheat and are considering changes in the applied tariff," the bureau said.



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