India is unlikely to buy wheat as the country has sufficient grain stocks and production is expected to match last year's level despite lower government purchases, officials and analysts said on Monday. Officials said wheat output this year was expected to match last year's 72 million tonnes, but much lower than previous projections of record production on good soil moisture because of inclement weather in March. Some traders have said India might need to buy wheat as the country is expected to produce around 2 million tonnes less than an earlier estimate of 75 million tonnes.
"There are no plans to import wheat at all," a food ministry official, who did not want to be named, told Reuters. "Our stock position is comfortable."
India had 4.06 million tonnes of wheat stocks on April 1 against the buffer stock requirement of 4 million tonnes.
Wheat procurement by Indian government agencies on May 26 was around 14.7 million tonnes, about 1.3 million tonnes lower than the previous year.
"The procurement is lower because harvesting in some states started late due to bad weather," another government official said. "We hope to do 16 to 17 million tonnes which is sufficient for us."
Traders said the government's procurement has been lower because private trading firms have been buying heavily from farmers at higher prices.
"Our estimate is that grain trading companies have bought around 1 million tonnes of wheat on anticipation that prices will rise," said Atul Chaturvedi, president of Adani Exports Ltd.
Sowing for wheat in India begins in November and harvesting takes place between April and May. It is grown mainly in the northern states of Punjab, Haryana and Uttar Pradesh and the central state of Madhya Pradesh.
Asian grain traders say there is a chance that India, a net wheat exporter in recent years, might be returning to a situation it faced in 1999 when the country's southern states resorted to wheat imports. At that time, they found it cheaper than moving the grain from northern growing regions.
They say the country could buy around a million tonnes for southern states as domestic wheat prices had started firming up on forecasts of a lower crop.
Media reports last week quoted the Indian chief of global grains giant Cargill Ltd as saying India could start importing wheat by December because of a lower crop.
Analysts and some traders said India is unlikely to import as this year's production and carryover stocks would be enough to meet domestic needs.
"We do not need to import. Our demand and supply are in balance and do not justify imports," said G. Chandrasekhar, commodities editor of Hindu Business Line newspaper, said.
"It does not matter if the government has lower stocks because whatever private trade has bought is going to come into the market, though at higher prices," a New Delhi-based trader said.
Wheat prices in India have risen to around 7,500 rupees a tonne from around 7,200 rupees two weeks ago.
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