India Lifts Wheat Export Ban On Record Production
19/07/11 -- Four record wheat crops in successive years have seen India finally lift it's ban on wheat export over the weekend.
The Ministry have raised their estimate for this year's already harvested crop to a fraction under 86 MMT, an increase of over 6% on last season. That's around 2 MMT more than the USDA currently say.
Indian Wheat Latest
With rice production this year expected to fall to more than 7 MMT below the level of production, India is keeping its fingers crossed that late season heat doesn't cause too much damage for the impending wheat crop.
Indian wheat potential was damaged by a very warm and dry February in the normally high-yielding states Punjab and Haryana pushing wheat development rapidly towards maturity, says Gail Martell of Martell Crop Projections:
Hot temperatures are forecast continue this week, with highs in the 90-97 degrees Fahrenheit (32-36 degrees Celsius) range in the northern wheat states. An 82.3 MMT harvest will not be achieved as the Indian government had hoped for, as heat late in the growing season is very damaging reducing kernel-fill, says Gail.
Despite constantly insisting that domestic wheat stocks are plentiful, bordering on burdensome, the Indian government yesterday announced that they were considering extending the period in which wheat can be imported duty free until the end of 2010. The current duty free regime expires at the end of this month.
Today they have dropped their wheat production estimate for the coming harvest to 80.28 MMT.
Who knows what the real stock situation is in India? The government recently forecast that they would have nearly 15 MMT of old crop wheat left in storage when the new marketing year begins on April 1.
Due to their constant prevarications and hesitation across the winter as to whether to allow any of their 'burdensome stocks' go for export, I strongly suspect that much that has either already been eaten by rats, exported via the back door, or wouldn't pass as fit for canine consumption let alone anything else.
The government plan to buy a further 24 MMT from farmers in the new MY, according to the Press Trust of India. Annual consumption is pegged at around 76 MMT. If production this year comes in nearer to that sort of number, the reality of the Indian stock situation could be a whole lot tighter than the paperwork suggests.
Get Me Miss Marple, Quick
Indian Agriculture Minister Sharad Pawar says that this season's wheat crop will beat last years output of 80.7 MMT after all, with crop conditions "extremely good".
Indian food price inflation rose to 8.56% in January, the fastest rise in 15 months.
But don't worry, as soon as this season's bumper harvest arrives food inflation will start to fall again, says the minister.
The country already has huge government-owned stocks, and will still have 15 MMT of those left on April 1st (nice choice of date), it says when the new crop harvest gets going.
"The vegetation index in Northwest India (where the bulk of the nation's wheat is grown) has been persistently bad, reflecting stress throughout December and January. Sub-par wheat yields seem likely in the normally productive irrigated wheat states, Punjab and Haryana," says Gail Martell of Martell Crop Projections.
"The whole of Rajasthan, Madhya Pradesh, Bihar, Punjab and Eastern Uttar Pradesh have had scanty rainfall. Rising temperature is sure to hurt yields of late planted wheat. So, at this point of time, any euphoria over the wheat crop may be premature," says the Hindu Buiness Line.
Who do you believe?
India To Import Wheat
Flour millers in the south of India have agreed deals to import mostly Australian prime wheat at levels around USD270-300/tonne according to media reports. This will be the first time India has imported wheat since the 2006/07 season when 6.7 MMT was shipped into the country.
News stories suggest that around 10,000 MT of wheat has been bought in containers, but if the goods get through stringent Indian customs regulations OK, the it could open the door for larger scale bulk imports.
Local prices have risen above the equivalent of USD300/tonne in the north, and USD330-350/tonne in the south. Meanwhile millers are conscious that bulk imports could be made at significantly lower levels, especially in the south of the country.
In late October the government said it had finally agreed to set the minimum tender price for wheat from it's reserves at Rs 1,379.70 - Rs 1,728.23/100kg (USD292-USD365/tonne). The lower price is for wheat in the northern and western breadbasket, whilst the higher price is for wheat delivered to the south of the country.
Millers in the south are keen to 'test the water' with quality control officials via some small containerised imports, before considering some larger bulk purchases whilst global prices remain so heavily discounted.
Whilst Black Sea wheat is currently quoted around USD230-235 a tonne C&F into Asia, international shippers have been quoting around a USD25/tonne 'risk' premium for Indian destinations.
Due to the tight customs regulations, Black Sea origin wheat might still be seen as too risky an option, which may potentially open the door for some EU wheat.
Indian Wheat Farmers Warn Of Lower Production On Fertiliser Shortage
Indian wheat farmers are protesting against what they see as "profiteering" and "hoarding" of urea by fertiliser dealers.
The government set the factory rate at which urea can be sold at Rs625 and dealers’ commission per bag is Rs10, taking the consumer price to Rs635, but there is no urea available at this price farmers say.
If you want urea, you must pay Rs1,000/bag, which is beyond the purchasing power of poor farmers, said Hazoor Bakhsh, a progressive farmer from Kot Sultan, Layyah. Wheat sowing is at its peak but neither seed nor urea was available in the market, as profiteers had stocked the commodities for black-marketing, he added.
Farmers’ representatives say dealers are fleecing the poor farmers without any check. They say on the one hand the government spent millions of rupees to mobilise farmers to grow more wheat, but on the other it is not taking any step to check black marketing and shortage of fertilisers.
They say the urea shortage will affect this seasons wheat crop and government efforts to avoid a wheat shortage in the coming season will all be in vain.
India produced 78.4mmt of wheat in 2008, and official government estimates are that it will produce a similar amount, possibly slightly more in 2009 when it begins harvesting it's crop in March.
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.
India Owes USD5 Million In Demurrage; Nogger Organises Whip-Round
Global grain trading companies have around $5 million of demurrage claims outstanding with the Indian government relating to wheat imported between August 2006 and January 2008, according to reports.
The claims relate to late discharge of vessels, during a period when Indian was importing wheat at a rapid rate to replenish government stocks.
Infrastructure problems such as inadequate storage and discharge facilities, transport difficulties and port congestion are being blamed for the claims.
India hasn't issued a wheat tender this year after last seasons bumper harvest, and a price increase to farmers, ensured that the government was able to buy adequate stocks on the local market.
OK, if you've read this far you want to know names don't you, you vultures? Glencore and Cargill are two who have been thrown into the hat. So lets organise a whip-round. Use the PayPal donate button on the right & Nogger will take care of everything else. Honest. Think of the kids at Christmas you tight-hearted buggers.
Indian wheat production touches record 78 million tons - Official
New Delhi (PTI)-- India's wheat production has touched a record 78 million tons in 2007-08 season, which will keep the prices stable in the domestic market, a senior government official said on Thursday.
The government's most recent official estimate pegged wheat output at 76.78 million tons in 2007-08 season. The revised figure should be reflected in the the government's next estimate, schedule for release next month.
"Wheat production has touched 78 million tons this year," Food Corporation of India (FCI) Chairman and Managing Director Alok Sinha told at a gathering of flour millers.
Wheat prices in domestic market would remain stable throughout this year, he said adding FCI would sell in the open market, if required, to ensure that enough wheat is available.
