India, the world’s second-biggest wheat grower after China, will import 2 million tonnes of the grain in 2016-17, the highest in a decade, the US Department of Agriculture’s (USDA) New Delhi bureau said, due to poor harvest thanks to two straight years of drought.
The estimate reflects a harvest which, at 88 million tonnes according to the bureau, came in well below the government figure of 94 million tonnes.
“Yields in the partially irrigated states of Uttar Pradesh, Madhya Pradesh, Rajasthan and Bihar are 5-10 percent below normal due to moisture stress conditions during most of the growth stage and rise in the temperature at the time of harvest,” the bureau said in a report, acknowledging some trade output estimates as low as 81 million tonne.
According to Agrimoney, the bureau’s wheat import estimate is twice the official USDA forecast, and the International Grains Council figure, and would be the highest since 2006-07.
It would also represent a marked turnaround from the average net exports of more than 5m tonnes in the three seasons to 2014-15, before the monsoon disappointment – often a feature in India during El Nino periods, Agricmoney said.
In Australia, which has already sold some wheat to India for 2016-17, grain trader Nidera Australia has forecast that Delhi’s need to source supplies, and the likelihood of farmers holding back on sales in the hope the squeeze will drive higher prices, “will see the Indian government stepping into the world market to import 2m-5m tonnes,” Agrimoney said in the report.
However, the USDA bureau said that its Indian import estimate was based solely on demand from private buyers wishing “to take advantage of the availability of cheaper wheat in the international market”.
India’s government “is unlikely to import wheat in the upcoming marketing year, unless the open market prices increase significantly,” the bureau said.
While the government’s wheat procurement drive over 2016-17 will, at a forecast 23.5m tonnes, be “well below last year’s 28.1m tonnes and government’s target of 30.5m tonnes”, officials will have sufficient inventories to get by.
“The government wheat stocks during the current year are likely to be relatively tight,” the bureau said.
“However, they will be sufficient to meet the wheat requirement for public distribution and other government welfare scheme – 24.5m tonnes last year – and prescribed minimum ending stocks, at 7.5m tonnes.”