India’s Wheat Production Falls 10% Below Government’s Forecast, Says Trade Association

India’s wheat harvest this year is at least 10% lower than the government’s estimate, according to a leading trade body. This marks the second year in a row that the country’s wheat production has fallen short of government predictions, complicating New Delhi’s efforts to contain food inflation, a major concern amid forecasts of an El Nino weather pattern. India consumes around 108 million metric tons of wheat annually, but the trade body estimates that production was around 101 million to 103 million tons, while the government says that wheat output reached a record 112.74 million metric tons this year. The roller flour millers’ federation says that the lower wheat production means that availability of wheat is very poor in the marketplace. The Ministry of Agriculture & Farmers Welfare has not responded to requests for comment.
Wheat prices in New Delhi have jumped 10% in the past 2 months to INR24,900 ($303) per metric tonne, with the government now imposing a limit on the amount of wheat stocks that traders can hold for the first time in 15 years. The Ministry of Agriculture & Farmers Welfare bought 26.2 million metric tons of new-season wheat from farmers against initial projections of 34.15 million tons, indicating the lower output. A Mumbai-based trader has also warned that the government has failed to take into account heatwaves and untimely rain which could have adversely affected wheat production. The trader warns that, as a result, India may need to allow duty-free imports by the December quarter, after U-turning on exports last year.