Wheat Production Touches 78 M Tonnes This Year - June 20, 2008

New Delhi: Wheat production of the country has touched 78 million tonnes in 2007-08 season, higher than what government has projected in its third advance estimate.

"Wheat production has touched 78 million tonnes this year," Food Corporation of India (FCI) Chairman and Managing Director Alok Sinha told reporters here

As per the government's third advance estimate, wheat production is projected at a record 76.78 million tonnes in 2007-08 season as compared with 75.81 million tonnes in the previous year.

On the back of record production and higher minimum support price, FCI -- the nodal agency for procurement and distribution of foodgrains under public distribution system -- along with other state agencies has so far procured 22.14 million tonnes of wheat against the targeted 15 million tonnes.

The government has fixed the wheat MSP at Rs 1,000 per quintal to boost procurement during ongoing marketing season. The Centre had to import 7.3 million tonnes of wheat during last two years because of low procurement than targeted.

Wheat Procurement Crossing 18 Million Tonnes This Season

NEW DELHI: With wheat procurement crossing 18 million tonnes mark this season, the government may procure another 2 million tonnes by the end of the season, experts said.

“The government can procure 2 million tonnes more by the end of this season if the trend continues,” an expert said. Last year, the government had procured 11.1 MT of wheat leading to an import of 1.8 MT.

Meanwhile, much to the relief of consumers, who are bearing the brunt of price-rise, retail prices of several food items remained stable in four metros since April, while that of edible oils and vanaspati showed a downward trend following government’s price control measures. Mumbai, the financial capital of India, saw downward trend in the prices of mustard oil, vanaspati, tur and potato. While mustard oil prices fell by Rs 5 to rs 70 a kg, vanaspati rates dropped Rs 6 to Rs 62 a kg.

Tur and potato rates declined by a rupee and Rs 1.5 and is available at Rs 39 and Rs 8 respectively.
However, rice, wheat and atta prices remained constant at Rs 18, Rs 13 and Rs 14 respectively in the national capital. The prices of these items remained stable in other three metros also.

Wheat Production Likely To Rise 7%

Mumbai: In line with expectation, world wheat production in 2008-09 is forecast to expand 7 per cent to register a new high while dwindling stocks are set to show an upturn as forecast production is likely to exceed forecast consumption by a good margin.

No wonder, the world wheat market has taken cognisance of this positive development as a result of which forward prices have begun to ease rapidly. On the Chicago Board of Trade, wheat futures prices have collapsed given generally improved supply prospect. Speculators have begun to rapidly liquidate their long position.

In its latest grain market report, the London-based International Grains Council (IGC) has forecast global wheat production in 2008-09 at a record 645 million tonnes (mt), up 41 mt from the previous year. This could well be one of the biggest yearly increases in production in recent years.

Consumption, on the other hand, is projected to rise to 630 mt (611mt) because of anticipated increase in food and feed demand encouraged by lower prices. World stocks, according to IGC, may recover to 128 mt (114 mt). Inventory with five major exporting countries is set to rise by 10 mt to 37 mt.

Indian wheat harvest is in full swing and market arrivals are heavy. According to the Agriculture Ministry, the crop size has set a new record of 76.8 mt.

Procurement by the governmental parastatal Food Corporation of India is at a steady pace, raising hopes of meeting and possibly exceeding the 15 million tons target. This has sent a clear signal to the world market that India may not be a buyer of wheat – not until six months from now, in any case.

Theoretically, India can become a wheat exporter this year as there will be price parity. However, given the price sensitivity and political compulsions, wheat export ban is most unlikely to be lifted.

As for maize (corn), world output is likely to trail consumption for the fourth year in a row. Stocks would be further drawn down. IGC has forecast world maize output in 2008-09 at 762 mt (775 mt) and consumption at a new high of 784 mt (774 mt).

While feed demand is expected to stay strong, high maize prices may lead to substitution by other grains and high protein feeds. Continued robust demand for ethanol in the US would mean as much as 20 mt of more corn would be diverted as biofuel feedstock.