India May Harvest Record Wheat Crop on Cool Weather (Update2)
By Pratik Parija
Feb. 5 (Bloomberg) -- The wheat harvest in India, the world’s second-biggest producer, may exceed last year’s record as favorable weather in the main growing regions improves yields, a government official said.
Production may total about 82 million metric tons, up from 80.58 million tons gathered last year, said S.S. Singh, head of the state-owned Directorate of Wheat Research. Wheat, planted in October, accounts for 70 percent of India’s winter-sown grains.
A record crop for a second year may help the Prime Minister Manmohan Singh cool food inflation that’s at a decade high after a drought damaged harvests of rice, oilseeds and sugar cane sown in June. Increased wheat production may encourage flour mills in the nation’s southern states to pare purchases from Australia.
“Good quality wheat will be available domestically at a reasonable price because of the optimistic view on the crop,” M.K. Dattaraj, former president of the Roller Flour Millers Federation of India, said by phone from Bangalore. “I am holding back my import plans.”
Mills looking for cheaper supplies from overseas may buy 200,000 tons of Australian wheat, down from an earlier estimate of 300,000 tons, Dattaraj said. The landed price of Australian prime wheat is 15 rupees a kilogram at southern ports, compared with about 16 rupees for the locally grown equivalent, he said. The price has slid from as high as 19 rupees in November and may decline further, he said.
The farm ministry will announce output estimates for wheat and other winter-sown crops on Feb. 8.
Global Stockpiles
Wheat for March delivery declined as much as 0.8 percent to $4.7175 a bushel on the Chicago Board of Trade amid speculation world stockpiles before the 2010 crop may be more than estimated by the USDA. Futures fell 11 percent in 2009.
The U.S. Department of Agriculture may next week increase its estimate on the global wheat stockpiles to 195.95 million tons from 195.6 million tons in January, according to the average estimates in a survey by Bloomberg News.
Indian farmers planted wheat across 27.76 million hectares (68.6 million acres) as of Feb. 4, compared with 27.59 million hectares a year earlier, according to the farm ministry. Night temperatures in the northwest plain, the biggest wheat-growing area, were less than 10 degrees Celsius on average in January and should remain under 15 degrees throughout this month, the directorate’s Singh said.
“Temperatures have been favorable so far,” Singh said in an interview by phone from the northern Indian city of Karnal. “There is no report of any disease throughout the country.”
Wheat for delivery this month fell as much as 0.6 percent to 1,345.8 rupees ($29) per 100 kilograms (220 pounds) on the National Commodity & Derivatives Exchange in Mumbai. The price may fall to 1,250 rupees in two weeks on prospects of a bigger harvest, said Harish Galipelli, head of research at JRG Wealth Management, which advises traders.
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