Govt policy to set the trend for wheat prices this year
With the domestic production of wheat projected to dip by 3 million tonnes (mt) from the official estimates of 97 mt, India may import 1.5 mt of wheat in the marketing year 2018-19, a new report prepared for the US Department of Agriculture (USDA) said.
“Despite lower planting, the (Indian) government’s preliminary estimate (2nd Advance Estimate released on February 28, 2018) forecasts 2018 wheat production optimistically at a near-record 97 mt; they expect a further increase in yield over last year’s record yield despite adverse planting conditions. However, most trade sources are currently estimating the crop in the range of 91-94 mt,” said India Grain and Feed Annual 2018 report prepared by USDA Foreign Agricultural Service staff in Delhi.
According to the USDA officials, India imported 5.9 mt and 2 mt in 2016-17 and 2017-18 respectively.
“Unfavourable late season weather conditions and consequent decline in the upcoming harvest may improve import prospects, while any further rise in import duty may push the forecast for imports lower,” the report said.
Quality wheat imports
In November last year, the Centre hiked the import duty of wheat to 20 per cent from existing 10 per cent, in order to discourage imports as the prospects of a good output looked up.
India, which turned into a net importer of wheat in 2016-17 and continued importing in 2017-18, may import mostly quality wheat for south India millers, who may find imports more economical than buying from the domestic market as prices may go up after the marketing season is over in August this year, it said.
The consumption of wheat in 2017-18 was revised lower to 92.3 mt on reports of poor offtake from South India on account of relatively higher wheat prices as compared to the previous year.
Maize imports likely
Similarly, due to growing demand from the feed sector, India may resort to importing 500,000 tonnes of maize, as the production this year is expected to fall short because of lesser area of cultivation. While the domestic production of maize is projected to be 25.5 mt, the requirement is estimated to be 26 mt, according to the report.
India, which exported a record 13 mt rice (4 mt basmati and 9 mt non-basmati rice) last year, may have to satisfy with lower levels of exports in 2018-19.
The report estimated India’s rice exports this year would be 12 mt, as the increase in minimum support price, announced in the latest Budget, may affect export competitiveness of Indian rice.
“The Indian government is unlikely to impose any export restrictions on rice exports due to sufficient domestic supplies, particularly the government rice stocks,” it said.
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