Global agencies peg Indian wheat crop at 110 million tonnes

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At least three global agencies have estimated India’s wheat production in the 2023-24 crop year around 110 million tonnes(mt), which is 2 mt lower than the Ministry of Agriculture and Farners’’ Welfare projection of a record 112.02 mt.

Global research agency BMI, a unit of Fitch Solutions, said it was pegging the Indian wheat crop at 110 mt. The US Department of Agriculture (USDA) has estimated it at 110.6 mt, while the Food and Agriculture Organisation’s Agricultural Market Information System (AMIS) also projected it at the same level. Last year, the production was put at 110.55 mt by the Ministry and 107.7 mt by others. BMI pegged it at 104 mt. The trade and industry are optimistic about a bumper harvest, though they see it being lower than 110 mt.

“While India’s wheat crop maintains a minimal exposure to current drought conditions in southern States, including Karnataka, above-average rainfall in Uttar Pradesh and other major wheat-producing States through the first two weeks of March 2024, does pose a downside risk to our projected harvest volume,” BMI said in a report.

Conditions favourable

“In India, conditions are favourable with an increase in total sown area compared to last year,” said AMIS.

After an estimated 1.1 per cent y-o-y decline in 2022-23, domestic wheat consumption in India will grow by 2.5 per cent to 111.4 mt (y-o-y) in 2023-24. “As a result, we anticipate the generation of a third consecutive wheat production deficit during the season, although somewhat narrower than the 4.7 mt shortfall that resulted from the 2022-23 season, BMI said.

“While there is an overall consensus about higher production of wheat from last year, the problem lies with the government estimate of 110.55 mt pegged for 2022-23. No one believed that estimate of last year and the market price as well as demand for the wheat sold in open market by the Food Corporation of India (FCI) proved that the apprehension was not unfounded,” said S K Singh, an agriculture economist.

Besides, the data collected by the government through the stock declaration rules also proved that there was hardly adequate grain in the market, Singh said.

Procurement challenge

According to Rahul Chauhan of I-Grain, wheat production is seen to be around 100 mt this year (July-June crop year) against 95-95.5 mt in the previous year.

“Weather in all parts of wheat producing states is very much favourable for wheat. In Rajasthan and western Uttar Pradesh, temperature during day time has started increasing. Still, a conducive weather this season may help in increasing productivity of wheat, which may be a big relief for the government,” Chauhan said. But the challenge will be how to procure wheat as prices are above the minimum support price (MSP) of Rs 2275/quintal in all the states, he added.

However, a flour miller buying wheat from mandis in Madhya Pradesh said the crop is available at  ₹2,250-2,300/quintal in MP as the government procurement is yet to gain momentum.

Procurement begins

Roller Flour Millers Federation of India President Pramod Kumar said the agency hired by the industry body has pegged the production higher at 102-104 mt for this year, which is almost at par with the previous year.

But a senior Agriculture Ministry official said that the government is confident of a record harvest of wheat and in the next estimate there may be an upward revision of its production number from current 112.02 mt.

The FCI, which sold record 10 mt of wheat from official reserves in open market through auction and retail sales between June 28 and February 28 of current fiscal, has started procurement in Rajasthan and Punjab. Though it is ready to buy the grain in UP, too, wheat arrival is yet to start in the State, sources said.

Official data show that wheat procurement reached 983 tonnes as of March 18, whereas there was no purchases in the year-ago period.