Indian Wheat Sets More Contract Highs
Indian wheat futures have posted another day of fresh contract highs this morning, with front-month November hitting Rs 1,421.10/100kg, that's just over USD300/tonne.
Wheat prices have now risen almost 12% this month. Despite protestations to the contrary, maybe that's what the government really want with planting about to begin for the 2010 crop.
There's six months to go before that arrives on the market however, so what is going to happen in the meantime?
Inflation is surging out of control, rising 1.51% during the week ended October 17, up from the previous week’s annual rise of 1.21%. The Reserve Bank of India (RBI) now predict that wholesale price inflation will reach 6.5% by the end of March, 2010, a significant increase from the previous forecast of 5% and well above its target inflation rate of 3%. Some private forecasts are that Indian inflation will hit 8% by the end of March.
Meanwhile consumer price inflation is running at over 10%, with staple foods such as potato prices almost double what they were a year ago, and sugar up by almost 50%.
India, typically amongst the world's top three or four rice exporters, is now looking to actively import rice. The government announced a scrap on import tariffs on certain types of rice this week, in an effort to boost supplies after summer drought slashed production. Three state-run agencies have wasted no time in announcing tenders to import 30,000 MT this weekend.
It might only be a matter of time before something similar happens with wheat.
Wheat prices have now risen almost 12% this month. Despite protestations to the contrary, maybe that's what the government really want with planting about to begin for the 2010 crop.
There's six months to go before that arrives on the market however, so what is going to happen in the meantime?
Inflation is surging out of control, rising 1.51% during the week ended October 17, up from the previous week’s annual rise of 1.21%. The Reserve Bank of India (RBI) now predict that wholesale price inflation will reach 6.5% by the end of March, 2010, a significant increase from the previous forecast of 5% and well above its target inflation rate of 3%. Some private forecasts are that Indian inflation will hit 8% by the end of March.
Meanwhile consumer price inflation is running at over 10%, with staple foods such as potato prices almost double what they were a year ago, and sugar up by almost 50%.
India, typically amongst the world's top three or four rice exporters, is now looking to actively import rice. The government announced a scrap on import tariffs on certain types of rice this week, in an effort to boost supplies after summer drought slashed production. Three state-run agencies have wasted no time in announcing tenders to import 30,000 MT this weekend.
It might only be a matter of time before something similar happens with wheat.
