Weekend Musings

The fertiliser market is going up on the back of India being short to the tune of a million tonnes, amongst other things, is what many of the newswires are saying.

Meanwhile wheat plantings in India are currently running in line with year ago levels at 21.7 million ha, the Indian government told us on Friday. What they forgot to mention though was that the wheat crop is normally almost fully planted by now. The five year average at this time of year is 27.1 million ha. The total average wheat area planted over the last three seasons has been 28 million ha.

Winter wheat only has a relatively short growing season in India, with plantings in November/December and harvesting March/April. A combination of a late planted crop, a lack of fertiliser and the worst summer monsoon season since 1972 makes India very much one to keep an eye on over the next few months. They are, after all, the second largest consumer of wheat in the world, the summer drought has cut rice production from 99 MMT last year to 81 MMT this time round, which some see as being likely to increase wheat demand further in 2010.

In short, these boys badly need to bring in a decent crop this season. With an estimated 60% of the country's farmland non-irrigated, they depend heavily on Mother Nature to lend a hand. Just recently she hasn't been overly cooperative:

That's a map of Indian rainfall for the week to Dec 5th with the main wheat growing area shaded in white. Virtually the entire country only received trace amounts of rainfall during that period, and things haven't gone much better since.

The government were supposed to have 25 MMT of wheat in store as at December 1st, and have steadfastly thus far been ignoring millers' appeals to release stocks onto the open market.

Maybe they're going to need it.