India Has Too Much Wheat
In a bizarre twist of fate from just a year ago, when India was importing wheat to buffer domestic stocks, the country now has more wheat than it can cope with and is eyeing exports as a possible way of reducing the surplus.
After producing a record 78.4mmt of wheat in 2008, the 2009 crop is expected to match or even slightly better that. With domestic consumption some 10mmt lower than that, storage facilities may be unable to cope with the 2009 crop due to be harvested in the spring.
Opening stocks of wheat were just 4mmt going into the current crop at Apr 1st 2008. Nov 1st stocks however are 21mmt, which will likely see a carryover into 2009 of some 10mmt. With next season's crop being called in the region of 78.5mmt, that gives India 20mmt more wheat than they are likely to consume next season.
The government announced last month that they would dispose of 1mmt of wheat to bulk consumers such as roller mills and biscuit producers by the end of the year. To date only 80,000mt of those wheat offers have been taken up. With Black Sea red wheat priced at $160/tonne, the government are finding few takers at asking prices of $240/270.
After producing a record 78.4mmt of wheat in 2008, the 2009 crop is expected to match or even slightly better that. With domestic consumption some 10mmt lower than that, storage facilities may be unable to cope with the 2009 crop due to be harvested in the spring.
Opening stocks of wheat were just 4mmt going into the current crop at Apr 1st 2008. Nov 1st stocks however are 21mmt, which will likely see a carryover into 2009 of some 10mmt. With next season's crop being called in the region of 78.5mmt, that gives India 20mmt more wheat than they are likely to consume next season.
The government announced last month that they would dispose of 1mmt of wheat to bulk consumers such as roller mills and biscuit producers by the end of the year. To date only 80,000mt of those wheat offers have been taken up. With Black Sea red wheat priced at $160/tonne, the government are finding few takers at asking prices of $240/270.
