Bangalore: Imports of wheat into India, the world’s second largest consumer of the grain, may climb 68% this year, supporting prices that are at a record.
Purchases may total 3 million tonnes (mt) in the year starting 1 April, Mark Samson, vice-president for South Asia at the US Wheat Associates, said on Thursday. The country bought 1.79mt last year.
India’s wheat output may decline by 1mt in the March-April harvest because of dry weather, the agriculture ministry said. The forecast comes as wheat, the best-performing commodity this year, climbed to a record on three US future exchanges on concern that supplies will fall short of demand.
“I will be surprised if India matches last year’s output as planting got delayed because of dry weather,” Samson said.
Wheat futures for March delivery on the Chicago Board of Trade rose from the daily limit of 30 cents (about Rs12), or 2.8%, to a record $10.93 a bushel in after hours trading in Sydney. Prices have advanced the limit for five sessions.
The commodity is heading for its biggest weekly gain in more than 32 years, rising 16% in Chicago. That’s the largest advance since a 19% gain in the week ended 11 July 1975.
India may harvest 74.81mt, compared with 75.81mt last year, agriculture secretary P.K. Mishra said on Thursday.
Production may still match last year’s harvest if the favourable weather holds up, he said.
India has been importing wheat for two years to safeguard supplies of essentials including lentils and oilseeds. Reserves of wheat at warehouses may total 5.3mt by 1 April, or 1mt more than needed for emergencies, Akhilesh Prasad Singh, minister of state in the agriculture ministry, told the conference on Friday.
“Population growth and rising incomes are boosting demand for wheat-based products,” Samson said. “Also, about 1 million tonnes of the grain may go to Bangladesh illegally.”
Still, the government may be able to increase purchases from farmers by paying them more for their crops, lowering the need to buy abroad at record prices, said M.K. Dattaraj, president of the Roller Flour Millers Association of India.
Farmers received Rs1,000 for 100kg, up from Rs850 in 2006. The government may purchase 15mt from farmers, up 35% from a year earlier, Alok Sinha, chairman of state-owned Food Corp. of India, the nation’s biggest buyer of food grains,said.