New Delhi: India, the world’s biggest producer of wheat after China, has enough stockpiles of the grain to meet demand, a finance ministry report said before Friday’s Union Budget announcement.
The state-run warehouses had 7.7 million tonnes (mt) on 1 January, the report issued on Thursday in New Delhi said. When combined with the arrival of imported wheat, supplies will be sufficient in the fiscal year ending 31 March, the report said.
Still, the South Asian nation may import 2mt in the year starting 1 July after dry weather pared output, the US foreign agricultural service said. India bought 1.8mt a year earlier, supporting a rally in prices of wheat that topped $12 (Rs477.6) a bushel for the first time in Chicago this week.
Wheat for May delivery fell as much as 27.25 cents, or 2.2%, to $12.23 a bushel in after-hours trading and stood at $12.45 at close in Singapore. The price on Wednesday rose as much as the expanded daily trading limit of $1.35, or 11%, to a record $13.495 after plunging by the same permitted amount.
India’s wheat production may drop 1.3mt from 75.8mt to 74.5mt in the March-April harvest after farmers planted the crop on a smaller area compared with a year ago, the foreign agricultural service said in a report dated 20 February.
The government, which needs 1mt of the grain each month to distribute to the poor, will start purchases of the new crop in April. It plans to buy 15mt from the farmers—up 35% from a year earlier. Finance minister Palaniappan Chidambaram will announce the Union Budget on Friday in Parliament in New Delhi.