India’s Wheat Output Set to Stay Flat, Keeping Stockpiles Tight

India’s wheat production is expected to be little changed from a year ago, raising pressure on the government to scrap or cut an import duty to help replenish stockpiles that are at the lowest in more than a decade.

Output will likely be 106 million tons this year, according to the median of seven estimates in a Bloomberg survey of wheat processors, which would match the prior season. The forecast is slightly lower than the 110 million tons projected by the Rollers Flour Millers’ Federation of India.

The harvesting of early-sown grain has already started in some main growing regions in central India, but there are concerns that rising temperatures in the north of the nation will threaten yields of late-planted varieties, according to flour millers that attended an industry conference in Goa this week.

“Any late growth of wheat will certainly be stressed,” said Donald Keeney, a senior meteorologist at commercial forecaster Maxar Technologies. “Dryness is quite extensive across the region, and very little rain is expected over the next few weeks. Temperatures will be trending much warmer.”

India’s consumers are already grappling with more expensive wheat, with retail prices at the start of March almost 8% higher than a year ago. Any reduction to the harvest will make it difficult for the world’s most populous nation to boost stockpiles.

The government plans to buy 31 million tons of this year’s crop from farmers at a guaranteed price for its various welfare programs.

The world’s second-biggest wheat producer needs imports to ease concerns about low inventories, the president of the millers federation told reporters on the sidelines of the Goa conference, adding that 2 million to 3 million tons of inbound shipments at a reduced duty into the country’s south was possible.

Hotter-than-normal temperatures are expected in the coming months following the second-warmest February in more than a century, according to the nation’s weather agency. Authorities were forced to ban wheat exports in 2022 after the hottest March in more than 100 years crimped output.

There could still be some reprieve from the warmer weather. There have been cooler nights and a drop in maximum temperatures in parts of the northwest and central regions, said Gyanendra Singh, the former head of the state-run Indian Institute of Wheat and Barley Research. He added that about 85% of the area was planted with heat-tolerant grain varieties.

Tags: wheat, India, crop forecast, prices