India heading for fifth straight bumper wheat harvest – report

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India is heading for its fifth consecutive bumper wheat harvest in the upcoming marketing year thanks to favourable weather conditions in the major wheat growing areas, the U.S. Department of Agriculture (USDA) has said in a report.

Assuming normal weather conditions through the harvest (April-May), it forecast marketing year (MY) 2020/2021 (April-March) wheat production at 107 million metric tons (MMT) from 31.6 million hectares, compared to last year’s record harvest of 107.9 MMT, on an expected lower yield from last year’s record yield.

The USDA forecast MY 2021/2022 (October-September) rice production at 118 MMT from 44 million hectares with a trend yield of 4.02 MT/hectare. In MY 2020/2021, above-normal 2020 monsoon rains supported record yields.

“An increase in the government’s minimum support price program for rice next year will encourage farmers to favour rice over other crops. Assuming a normal monsoon this summer, MY 2021/2022 coarse grain production is forecast at 47.6 MMT, lower than the MY 2020/2021 record harvest of 49.2 million metric tons,” it said.

India’s wheat consumption in MY 2021/2022 is forecast at 97 MMT, higher than last year’s estimated consumption of 96.6 MMT (includes 11 MMT of ‘free’ wheat under COVID-19 food relief programs).

While the COVID-19 relief programs ended in November 2020, the government is likely to continue to offload excess government grain (wheat and rice) stocks procured under the minimum support price (MSP) program at subsidised prices to reduce government grain stocks, th USDA said.

Wheat use for feed and residual is forecast higher at 7.0 MMT compared to 6.5 MMT last year on expected higher supplies of spoiled government wheat stocks, it added.

Erratic participant

India is an erratic participant in the international wheat market, the report said, adding that it imports wheat in low production years and exports when local supplies are sufficient and prices are competitive, and/or if the government subsidises exports.

High domestic supplies will keep most foreign wheat out of the Indian market in MY 2021/2022, the report said.

Assuming a normal 2021 monsoon (June-September 2021), USDA forecast MY 2021/2022 rice production at 118 MMT from 44 million hectares with a trend yield of 4.02 MT/hectare (rough rice).

An increase in the government’s MSP price for rice next year will encourage farmers to favour rice over other crops. With 40 percent of rice acreage unirrigated, a timely and well-distributed 2021 monsoon is critical for forecast area planted and yields, the report pointed out.

A delayed, erratic, and/or below normal monsoon in the growing regions will lower production by 5-10 MMT, while good rains may augment forecast production by 2-4 MMT over forecast level, it added.

Rice consumption in MY 2020/2021 is estimated at 103.1 MMT, up eight percent from last year, due to the government releasing more than 22 MMT of ‘free’ rice under various COVID-19 relief programs during April- November 2020. Forecast surplus domestic supplies and ‘more-than-sufficient’ government grain stocks are likely to support consumption next season; the MY 2021/2022 consumption forecast is marginally higher at 104 MMT as government is likely to push out more ‘subsidised’ rice under food security relief programs.

India has become the world’s leading rice exporter following the government’s 2011 removal of its export ban on coarse rice. The USDA forecast MY 2021/2022 rice exports lower at 14 MMT (10 MMT coarse rice and 4 MMT (Basmati rice) on expected higher MSP-driven domestic rice prices and response from competing origins.

Read full report here

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