Wettest monsoon in 25 years could lift 2020 wheat output


Higher govt. procurement, subsidy for exports needed

India’s wheat production could jump to a second consecutive annual record in 2020 as the wettest monsoon in 25 years is set to help farmers to expand the area under the winter-sown crop while boosting yields, industry officials told Reuters.

But that higher production would add to India’s already swelling inventories, potentially forcing the world’s second-biggest wheat producer to ramp up procurement of the grain from farmers and provide incentives for overseas sales to support local prices.

“The area under wheat and yields would rise due to good rainfall. We can certainly produce more than last year’s record production,” said Gyanendra Singh, director at the state-run Indian Institute of Wheat and Barley Research.

India grew 102.19 MT of wheat in 2019. The country received monsoon rains during the June-September season that were 10% above average and the rainfall continued during October and November, increasing soil moisture levels required for crop sowing.

Only one wheat crop is grown in India each year, with planting starting in late October and harvesting in March. Farmers are inclined to expand the area under wheat as its prices are more stable than any other crop due to government buying, said Harish Galipelli, head of commodities and currencies at Inditrade Derivatives & Commodities in Mumbai.

For 2020, India has lifted the price at which it buys locally produced new-season wheat by 4.6% to ₹19,250 ($268.22) a tonne.

“After the hike in MSP, wheat planting has become even more attractive for farmers,” Mr. Galipelli said.

For the time being, dealers say wheat exports from India next year would be difficult because of their comparatively high cost.

“India could easily produce more than 100 million tones but could not export even 1 million tonnes unless government provides subsidy for exports,” said a Mumbai-based dealer with a global trading firm.

Why you should pay for quality journalism - Click to know more

Related Topics Economy Business
Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Jan 23, 2020 6:58:39 PM |

Next Story