India sees record 75.5 mln tonnes wheat output
January 25, 2006
NEW DELHI (Reuters) - India is expected to produce a record wheat output of 75.5 million tonnes this year, well above about 72 million tonnes in 2005, the Food Ministry said on Wednesday, but traders cautioned it was too early to make a call.
A cold spell over the past weeks in the northern wheat growing regions and more area under cultivation have brightened the country's wheat production prospects this year.
"As per the present indications, production of wheat in the coming harvest is likely to be record 75.5 million tonnes," the Food Ministry said in a statement.
Traders said more time was needed as the weather in the coming weeks would have a bearing on the output.
"It is too early to say as until now we have not had enough winter rains," said D.P. Singh, chairman of the All India Grain Exporters Association. "It could be between 73-75 million tonnes depending on the rains and the weather conditions."
Indian wheat prices have been rising since December on concerns of falling government stocks and New Delhi has been struggling to avoid imports because of lower production in 2005 after erratic weather.
The ministry said on Wednesday it had 6.2 million tonnes of wheat stocks as on Jan. 1, sufficient to meet monthly requirement of 1.3 million tonnes until the new crop arrives in the northern Indian markets in late March.
India's wheat crop is sown in November and December. Harvesting for the early-grown varieties in Madhya Pradesh begins in late February.
Wheat has been sown on 26.14 million hectares so far, up from 25.9 million hectares at this time of last year, the farm ministry said.
The food ministry released 73,000 tonnes of additional wheat on Wednesday into the open market in various states to meet demand in February. This is in addition to 150,000 of wheat earmarked for sale in that month.
"In response to the government intervention, open market prices of wheat have already shown a downward trend in Delhi by 50 rupees per 100 kg," the ministry said.
Wheat futures fell on Wednesday with the February contract at the National Commodities and Derivatives Exchange (NCDEX) trading 23.20 rupees lower at 883 rupees per 100 kg at 0903 GMT.
(Additional reporting by Hari Ramachandran)