Record wheat planting forecast in India, could help cap soaring prices1 min read . Updated: 18 Oct 2007, 11:40 PM IST
Record wheat planting forecast in India, could help cap soaring prices
New Delhi: Farmers in India, the world’s third biggest wheat importer, are forecast to plant a record crop, helping cap world prices that have soared 64% this year.
Area sown to the cereal may exceed 29 million ha (mha), up from 28.5mha last year, B. Mishra, head of the directorate of wheat research, a state body that develops high-yield seeds, said on Wednesday.
A bigger crop will ease pressure on the government to import the grain at record prices. India has bought 1.3 million tonnes (mt) since July from suppliers including Cargill Inc., and last month set an output target of 75.5mt for next year, the most since 2000.
“A bigger harvest would mean less imports, and that will obviously impact global prices," said Vijay Iyengar, managing director of Agrocorp International Pte Ltd.
Wheat prices on the Chicago Board of Trade set record highs 23 times in the three months ended 28 September after weather hurt crops from Canada to Australia.
Global reserves will fall to 107 from 122.7mt last year, the US department of agriculture (USDA) said on 12 October.
Record prices prompted the Indian government to raise the minimum price it pays wheat growers by 18% to Rs1,000 for 100kg.
US farmers are responding to high prices by sowing more wheat. Some 73% of the winter wheat crop was planted as of 14 October, compared with 58% a week earlier, USDA said in a report on 15 October. Wheat prices in Chicago have fallen 15% from a record $9.6175 (Rs381.8) a bushel on 28 September.
Wheat for December delivery rose 0.3% to $8.23 a bushel in after-hours electronic trading on the Chicago board. The gain ended four straight days of losses.
Reserves at state-run warehouses totalled 10.9mt on 7 September, Alok Sinha, chairman of Food Corporation of India, had said on 12 September. With the recent imports, the nation may have stockpiles of 5mt by 1 April, more than the 4mt required to meet emergencies.
The government needs 1mt of the grain a month to distribute to the poor. It imported 6.7mt of wheat in the marketing year ended 1 June, making the nation the world’s third biggest buyer of wheat, according to the US foreign agricultural service.
Thomas Kutty Abraham in Mumbai contributed to this story.