NEW DELHI/CHANDIGARH: Wheat imports by flour mills are likely to continue as a lower-than-expected rabi crop is insufficient to meet India's demand for wheat flour and maida. Agriculturists feel the drop in rate of wheat seed replacement due to cash crunch would affect yield this season. This coupled with foggy conditions are likely to raise India's reliance on imports.
"We require 22-25 million tonnes of wheat to make wheat flour, sooji and maida for the domestic market. With less carry-forward stock and the government replenishing their warehouses for various social schemes, dependency on imports by the private sector will continue," says Veena Sharma, secretary, Roller Flour Millers Federation of India.
With carry forward stock going to be lesser than last year the industry would be forced to rely on imports, said Prerana Desai, vice-president at EdelweissBSE -3.30 % Agri Research. "The government stock on December 1 (16.60 million tonne), is currently the lowest in the past eight years. Imports will continue next year as global prices are falling," she says. Till March 2017, India will import 3.85 million tonne of wheat, with arrivals till date in Indian ports at 1.6 million tonnes, she said. ..
Millers anticipate prices to firm up next year, with low carry over stock.
Talking of the shortfall, Tejinder Narang, former director of state-run trading company PEC, said: " The market estimates 2017-18 wheat production at 86-87 million tonnes, compared to the government figure of 96.5 million tonnes. We expect wheat imports to continue." The prices would be directly based on the quantum of imports that happens.
Mild winter, delayed sowing and anticipated drop in yield per hectare to 2.8-2.9 tonnes from average 3 tonnes per hectare are the main reasons for the low production, Narang said.
Jasbir Singh Bains,director, agriculture department, Punjab government, feels fog conditions and dry weather are affecting the growth of wheat crop. "Rains in coming days is crucial to curb foggy conditions," he says.
Wheat acreage in India is normally 30.40 million hectare. Till last week, wheat planting has been completed on 22.56 million hectare, as per agriculture ministry data.
Wheat prices are currently Rs 2,100 per quintal in the Delhi wholesale market and Rs 2,000 a quintal in Indore market which were 20% higher than last year, say traders. The minimum support price of wheat at which the Food Corporation of India and other agencies will procure wheat starting April 1, is Rs 1,650 a quintal.
"I anticipate wheat price to be more than the MSP in April as more private trade will compete to get good quality crop," says Vinod Mittal, of Chandigarh Flour mills. He adds that trade has seen high prices this year and hence they will stock more in 2017.
Reap the Crop Output Data
There is a need to assess the causes for the lower output, and to establish if this is a trend by analysing crop output data from official and nonofficial sources. Once the causes are identified, there is a need to frame policies, programmes and interventions to address the factors responsible for a lower output. This would be a far better engagement than simply focusing on whether the official estimates were higher or not.
Source: economictimes.indiatimes.com