Uncertainty over wheat export as output dips
NEW DELHI: There is confusion over India’s estimated wheat output this year after a severe heatwave in March cut yields of the main winter staple that the country was hoping to export in large quantities to fill a global shortage due to the Ukraine war.
There could be a potential tight domestic supply situation in a year of a global food crisis, analysts told HT.
Wheat prices have risen to record levels, rising an annual 6.95% in April, the highest in a decade, on the back of lower output and brisk buying by private traders at higher than the government’s minimum support price of ₹2,015 a quintal (100 kg) in anticipation of robust export demand.
An emerging issue, according to analysts, is whether India can afford to export wheat without restrictions, and if the country will witness a further spike in domestic food prices.
India exported a record 7.85 million tonnes in the financial year to March, up 275% from a year ago. A crimped output has now cast doubts over India’s wheat export potential.
Wheat production is expected to be 105 million tonne, 5.7% down from a record 111.32 million tonne forecast in February, according to the government’s revised estimates.
Yield drops have been large in some states, ranging between 15-20%, according to reports from farmers and traders, and India could end up with an even smaller wheat crop of about 90-95 million tonne.
The government expects its own purchases to drop to a 15-year low of 19.5 million tonne, down from a targeted 44 million tonne. The government needs 30.5 million tonne for subsidised food distribution to nearly 800 million Indians, other welfare schemes and the Pradhan Mantri Garib Kalyan Anna Yojana, the Covid-relief free foodgrain scheme in force till September 2022. “With opening stocks of 19 million tonne, and an expected procurement of 18 million tonne, the government will have 37.5 million tonne of wheat available for 2022-23,” said Ramandeep Singh Mann, a farm expert.
Government food schemes will require about 31.4 million tonne, according to Mann. “This is more than what the government will be holding this year,” he said. “Meeting this (government food schemes) will not be easy.”
This year would be a rare occasion when wheat procured by the government, estimated to be 18.5 million tonne, will be less than the opening balance stocks lying with the government, which is about 19 million tonne.
April consumer food inflation figures, to be released on May 12, is expected to rise. In fact, average monthly prices of nine of 22 food items tracked daily by the department of consumer affairs touched a record high in April.
“Nobody is sure about the actual size of wheat crop. Wheat output may be 90-95 million tonne,” said Rajinder Singh, a former agricultural extension officer from Haryana’s Karnal. “The government’s estimates are at best provisional at this stage.”