The Hindu Business Line : Wheat output: Govt, trade keep fingers crossed

Differing views
Multinational firms concur with the Agriculture Ministry’s estimate of a good crop.
US farm trade sees lower output on late sowing, lower fertiliser consumption.

M.R. Subramani

Bangalore, Feb. 10 Though the Union Agriculture Ministry has projected a 74.81 million tonnes (mt) wheat production this year, the Union Government, especially the Food Ministry, and trade are keeping their fingers crossed with February seen holding the key to a good crop.

“We are looking at a reasonably good crop. But February is a critical month and we have to see how it progresses,” said Mr T. Nandakumar, Union Secretary for Food and Public Distribution.

He made these comments at the 2-day international wheat seminar on wheat and wheat products that concluded here on Saturday. The seminar, organised by the Wheat Products and Promotion Society and Roller Flour Mills Federation of India, saw an impressive turnout of over 350 participants and though the theme was “Vision 2020”, all eyes focussed on this year’s crop.

Cold spell to help

February is seen determining the output and the current cold spell in the growing areas is seen helping it. “Wheat loves cold weather and the crop will only stand to gain,” said Dr B. Mishra, Project Director, Directorate of Wheat Research.

Mr Ravi Gupta, CEO of AWB India Ltd, also agreed with the view that the weather only promised a good crop.

In fact, privately even multinationals, who buy wheat from the open market for flour, biscuits and bread, concede that the crop could be around the level the Agriculture Ministry has estimated.

While Mr Vinod Kapoor, former president of the Wheat Products Promotion Council, is confident of a 75 mt production, multinational firms too see the crop topping the mark.

A Karnataka miller said expectations of a good crop was one reason why the user industry had not lined up their plans for wheat procurement. “We are waiting to see what will happen to the production,” he said.

Naysayers

However, there are a few, mainly international players, who see the crop at around 72 mt only. First, the International Grains Council, an arm of the Food and Agriculture Organisation under the UN mandate, projected the crop around 72 mt this year. US farm and trade officials also seem to concur with the view.

“The crop could be 2-3 mt less than what the Indian Government is projecting. That’s why we expect India to import three mt of wheat this year,” said Mr Mark Samson, Vice-President, South Asia, US Wheat Associates. He bases his assessment on two factors: One, late sowing and two, 30 per cent lower fertiliser consumption.

Carryover stocks

However, an anticipated 53 lakh tonnes carryover stock is seen crucial to India’s food security plans. “The carryover stock and the projected production, though lower than last year’s 75.81 mt, are enough to meet our demands this year,” said Mr Akhilesh Prasad Singh, Union Minister of State for Consumer Affairs and Public Distribution. Last year, the private trade bought nearly 20 lakh tonnes of wheat from the open market, nearly double that its purchase during 2006. This year, they aren’t sure about their plans on purchase.

“We could be purchasing around last year’s level. But if the prices are going to be higher, then our purchases could be a bit lower,” said an official of a multinational firm.

The other factor that has put the private trade on the backfoot is the higher minimum support price fixed for wheat procurement and the Centre’s plan to announce bonus for the growers.

Two years ago, there was a guessing game on wheat output due to the suspicion that it would be lower. Then, it dipped to below 70 mt. This time around, there is silence and it could mean that the production could be better, weather holding good.