USDA estimated India’s wheat production at 108 million tonnes, below than government’s forecast.

The Foreign Agricultural Service (FAS) of the United States Department of Agriculture (USDA) has estimated India’s wheat production at 108 million tonnes (mt), lower than the Ministry of Agriculture’s projection of 112.18 mt.

This comes at the same time when a private agency — Agriwatch — hired by the Roller Flour Mills’ Federation of India has pegged the cereal’s production at 102.89 mt. However, a few experts say the actual production of the crop will be known after a few days when arrivals begin gathering momentum and the damage caused by weather factors is assessed.

Better crop performance

“FAS New Delhi (Post) forecasts India’s marketing year 2023-24 (MY24) wheat production at 108 mt, resulting from 31.9 million hectares. This represents significantly better crop performance compared to the MY24 harvest of 100 mt produced from 30.5 million hectares,” the USDA FAS said in an annual grain feed update.

The FAS Post said favourable weather conditions and sufficient soil moisture from the time of planting through the vegetative and reproductive stages buoyed record planting levels.

“Post forecasts MY24 yields higher at 3.39 tonnes/hectare compared to last year’s 3.28. Taking a cue from the experience gleaned from last year’s heat stress singeing of the wheat crop at harvest time, farmers this time pursued more timely plantings,” it said.

Rains, hailstorms impact

“Adverse weather conditions have damaged the (wheat) crop in almost all major growing States, leading to reduced yields and lower quality. Wheat crop was damaged in earlier stages in February due to a rise in temperature in Gujarat and Rajasthan,” said Sanjay Gupta, Managing Director and Chief Executive Officer, National Commodities Management Services Limited (NCML).

Further, rains and hail with high-speed wind occurred during the fortnight of March and have affected rabi crops such as wheat, gram ( chana), lentil, mustard and paddy. The damage has been reported in over 15 States, including Punjab, Odisha, West Bengal, Telangana, Uttar Pradesh, Haryana and Karnataka, he said.

“Harvesting has been delayed due to rains and hailstorms,” said Gupta.

Price spike

“Based on the market feedback, the impact of weather will be visible on the overall wheat quantity and quality. It appears that most of the harvesting was completed before the untimely rains hit last month in Madhya Pradesh,” said Saket Chirania, Co-founder of Agrizy.

However, there have been certain wheat-growing clusters where the impact was more compared to others. The impact in these States is estimated to be 5-10 percent. While the actual impact will be known in the next few days, the estimates in Rajasthan are to the tune of 15-20 percent, he said.

USDA’s FAS New Delhi Post said wheat prices were fueled in 2022-23 by export demand and tight supplies before rising to record highs in January 2023. But the Indian government intervened in the open market and sold wheat at a lower reserve price resulting in the rates during February-March.

Export ban won’t go

The Post has ruled the Centre removing the ban on wheat exports.

“Needing to replenish depleted government-held wheat stocks volume, the Indian government is unlikely to relax its export ban on wheat and wheat products, at least through the peak harvest/ marketing period,” it said.

Policymakers are fretting over reports predicting a strengthening of the El Niño later in 2023, potentially impacting Indian agricultural production and food supplies, the Post’s report said, the Centre will ensure ample wheat supplies ahead of the 2024 elections.

“It will retract the wheat and wheat products’ export ban, only if it is comfortable with a favourable combination of the MY24 harvest realisation, MSP procurement, and expected market prices. If so, it could then allow for controlled exports to neighbouring and developing countries,” the FAS Post said.

Additional supply

The Centre banned wheat exports on May 13 last year after the grain’s production was affected by a heat wave that swept across the country during March-April.

Before that the Ukraine war broke out, resulting in export demand for Indian wheat. Between March and May, at least 5 mt were shipped out, while procurement of wheat for central pool stocks dropped to 18.79 mt against purchase of a record 43.44 mt in 2021.

With exports banned and production expected to be higher than last year (Centre’s estimated 107.74 mt), the government expects an additional 10 mt supply in the pipeline this year.

Source: The Businessline