Kuala Lumpur: India is likely to import about 2-3 million tonnes of wheat in the crop year starting in July, even as the country is set for a bumper domestic harvest, the head of conglomerate Adani Enterprises’ agribusiness division said on Monday.
India is expected to produce about 95 million tonnes of wheat from the upcoming harvest, Adani Agribusiness chief Atul Chaturvedi told Reuters in an interview, up from last year’s 85 million tonnes estimated by traders.
“It takes a few years of bumper production to get the stocks to comfortable levels," said Chaturvedi, head of one of India’s biggest agriculture companies, pointing to the need for more imports. Chaturvedi spoke in an interview on the eve of a major palm oil conference in Kuala Lumpur: As well as grains and pulses, his firm processes oilseeds and refines vegetable oils.
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India, the world’s second-largest wheat consumer, has bought more than 5 million tonnes of wheat since June last year, after two consecutive years of decline in production due to droughts and unseasonal rains ahead of harvest. India is also the world’s second-biggest wheat producer.
The domestic wheat harvest is expected to peak in April, likely limiting purchases in the following months, but traders expect importers to step up purchases towards the end of the year when supplies are likely to tighten.
The benchmark Chicago wheat futures rose for a second week in a row last week with strong demand, fund buying and concerns about dry weather in US plains underpinning the market.
India could impose a 25% import tax on wheat by the middle of March, two government sources said last week, reinstating the tariff after a gap of nearly three months in response to recent large purchases from overseas.
Chaturvedi said that Indian government is targeting procurement of 32-33 million tonnes of wheat for state reserves, against about 22-23 million tonnes bought last year.
Importing wheat for consumption in southern states will be cheaper than transporting it from the nation’s main northern growing regions, he said.
“The world is awash with wheat, it is cheaper for importing wheat from the Black Sea region or Australia for millers in southern India," Chaturvedi said.
Most flour millers, biscuit and confectionery makers in coastal towns of southern India find it cheaper to import, especially from Australia, than to buy grain from farmers in the key producing states of Punjab, Haryana and Uttar Pradesh in north India and Madhya Pradesh in central India. Reuters