Wheat harvest in India seen at record

Filed on April 10, 2013

Wheat harvest in India, the second- biggest grower, may reach a record for a sixth straight year after farmers increased use of high-yielding seeds and winter rains boosted crop prospects, a state-run researcher said.

Production in the year ending June may exceed 94.9 million tonnes harvested a year earlier, Indu Sharma, director at the Directorate of Wheat Research, said in a phone interview on Monday. The agriculture ministry predicts the crop to drop to 92.3 million tonnes this year.

A bigger harvest may prompt India to increase exports as it runs out of space to store the grain, potentially reducing global food costs, which fell for a fifth month in February. The country has approved shipments of 9.5 million tonnes from state reserves since July as inventories expanded, according to the food ministry. Futures slumped to a nine-month low in Chicago early this month on signs that expanding supplies will outpace demand amid concern that global growth will falter.

“The government is sitting on a huge stockpile and if the harvest is going to be better it is natural for the government to go for more exports,” said Prasoon Mathur, an analyst at Religare Commodities Ltd. “If huge quantity is exported some pressure on global prices may be seen.”

The contract for May delivery fell 0.3 per cent to $7.105 a bushel in Chicago at 4:07 pm in Mumbai. Futures tumbled to $6.5975 on April 1, the lowest for a most-active contract since June 20.

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