The decline could slow India’s exports of the staple. Benefiting from a rebound in global wheat prices following Russia’s invasion of Ukraine, India exported a record 7.85 million tonnes in the fiscal year ended March – up 275% year-on-year.
Anticipating another bumper crop, traders and government officials saw an opportunity to export 12 million tonnes in the current 2022-23 fiscal year.
In mid-February, almost a month before the latest heatwave, the government said India was on track to harvest an all-time high of 111.32 million tonnes of grain, up from 109.59 million tonnes a year earlier
The government has yet to formally revise its production estimates, but an official note seen by Reuters says production could fall to 105 million tons this year.
“The production loss of wheat based on India is more or less around 6%, due to the shrinkage of wheat grains around 20% due to end heat and heat waves,” the release said.
In 2022, India recorded the warmest March in 122 years, with the maximum temperature across the country rising to 33.1 degrees Celsius, nearly 1.86 degrees above normal, according to data compiled by India’s state weather agency.
“We have an initial idea, but it’s a bit early to fully understand the magnitude of the crop losses,” said a senior government official who oversees sowing and harvesting.
He declined to be named as he is not authorized to speak to the media.
At this point, no one has a clear idea of the crop size, said Rajesh Paharia Jain, a New Delhi-based trader. “It’s a dynamic situation, so we’ll have to wait a while to see a clearer picture,” Jain said.
EXPORTS AT RISK
“Based on the government’s February production estimates, we could easily have exported much more than 12 million tons, but now it looks like we’re exporting around 10 million tons,” he said.
Even with the warm weather, India’s wheat exports could easily exceed last year’s shipments, the government official said.
However, some traders are more pessimistic, with some forecasting a fall in production of up to 10%.
“The dwindling supply on the spot markets points to a larger decline in production. I think production could drop by 10% to around 100 million tons,” said the Indian head of the global trading company, who asked not to be named.
The government could limit exports if production gets closer to that level, he said.
In his address to the Indian diaspora in Berlin, Indian Prime Minister Narendra Modi said that many countries are currently struggling with severe wheat shortages.
“Major nations are concerned about food security and at this time, India’s farmers are stepping up to feed the world,” Modi said.
Before the almost 50% increase in world wheat prices, payments from the state-owned Food Corporation of India (FCI) exceeded world prices, making exports unattractive.
Now private traders are actively buying wheat from Indian farmers for export.
According to official data, FCI wheat purchases so far this year are 38% lower than last year, indicating both higher purchases by private traders for export and some decline in crop yields.
Local prices are up 15% in some markets, a Mumbai-based trader told a foreign trading firm, another possible sign of more buying for export and tighter supply.
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