The Hindu Business Line : Centre raises wheat output estimate to 74.89 mt

Revised estimate
The latest estimate is more than the 73.70 mt and 72.50 mt projections released on April 4 and February 5.
The 74.89 mt estimate would make it the best-ever wheat crop since the record 76.37 mt of 1999-2000.

Harish Damodaran

New Delhi, July 15 Critics of the Centre’s recent decision to import 5.11 lakh tonnes (lt) of wheat at $325.59 a tonne may have added ammunition to buttress their case.

The Union Agriculture Ministry, it is reliably learnt, has further revised upwards its estimates of the country’s wheat output for 2006-07.

The latest ‘fourth advance estimate’, sources told Business Line, puts the size of the 2006-07 crop (being marketed this year) at 74.89 million tonnes (mt).

This is more than the 73.70 mt and 72.50 mt projections in the earlier ‘third’ and ‘second’ advance estimates released on April 4 and February 5, respectively.

The 74.89-mt figure was apparently finalised based on inputs received from State Governments during a two-day National Workshop on Improvement of Agricultural Statistics held here on July 5-6.

The estimate was even approved by the Agriculture Minister, Mr Sharad Pawar, around July 11.

However, it has not been made public yet.

“There is an obvious reason for that. If domestic production is assessed to be higher than earlier, it would raise further questions on the wisdom of importing wheat at such high rates,” the sources said.

In fact, the State Trading Corporation of India’s (STC) contract at $325.59 a tonne – which the Opposition Bharatiya Janata Party (BJP) has termed ‘scandalous’ – was struck on July 10, a day before Mr Pawar is said to have given his nod to the revised estimate.

The data may still be released in the coming week when “the storm would hopefully have subsided”, the sources added.

The 74.89 mt estimate for 2006-07 would make it the best-ever wheat crop since the record 76.37 mt of 1999-2000.

The upward revision from the initial 72.50 mt to 74.89 mt is quite the reverse of the 2005-06 crop – the size of which has been successively downgraded from 73.06 mt to 69.35 mt.

Official strategy

“Last year, the official strategy was to downplay the shortage in the market by making excessive output claims. This time, it is just the opposite. By repeatedly harping on the need to import at least 50 lt and conveying its willingness to do so at any price, the Centre has willy-nilly talked up both global as well as domestic markets,” the sources pointed out.

Prices

Wheat dara in Delhi is currently quoting at Rs 1,060-1,065 per quintal, as against Rs 940-945 a month ago. Since July 10 alone – when the latest import decision was made – wholesale prices have hardened by some Rs 60 per quintal.

The $325.59 a tonne landed price for 5.11 lt is way above the $205.31 weighted average for 55 lt contracted by STC during 2006-07.