India, the world’s third biggest importer of wheat last year, may refrain from purchasing more of the grain as it has sufficient supplies to meet demand, likely cooling global prices that have doubled in the past year.
“As of today, we don’t need to import more,” agriculture minister Sharad Pawar said. “Our stocks are adequate to manage demand.”
India expects to have 5 million tonnes (mt) of stockpiles by 1 April, more than the 4 million needed for emergencies, Food Corp. of India said last week. The country may have to import 5 mt of wheat by June, Pawar added.
Going slow: With its stockpile comfortable, India may refrain from purchasing more wheat; this will likely have a cooling effect on global prices that have doubled in the past one year.
“Stocks are comfortable at present and it definitely makes sense not to add fuel to fire,” said Atul Chaturvedi, president of Adani Enterprises Ltd— the country’s largest private trader of farm commodities.
Prices of wheat reached a record last week as dry weather damaged crops from Canada to Australia and demand increased from Egypt to India. A decision by India, the world’s second biggest consumer of the grain, to hold back from buying more wheat may help curb gains in prices. The South Asian nation bought 1.3mt in the past two months. Wheat futures for December delivery fell as much as 14.75 cents, or 1.7%, to $8.54 (Rs344.16) a bushel. The contract was at $8.57 a bushel—down 1.4%, in after-hours electronic trading on the Chicago Board of Trade on Wednesday. Earlier, it rose as much as 0.8% to $8.76 a bushel. India held 10.9 mt of wheat in state warehouses on 7 September, sufficient to last until July, Food Corp. said last week. The government-owned company is the nation’s biggest buyer of grains from domestic farmers. India hopes to produce 75.5mt of the grain next year—the most in seven years, the government said on 14 September.
The South Asian nation probably produced 74.9mt in the year ended June, compared with 69.35mt a year earlier, the government said earlier this year. Sowing of wheat, which accounts for more than 73% of India’s total winter food grain production, begins in October. Harvesting starts in April.