India’s rising wheat, pulse output likely to curb imports

MUMBAI, India (Reuters) — India’s production of wheat and pulses is expected to jump next year because a hike in the government’s assured purchase prices and ample rainfall have prompted farmers to plant more of the winter crops, industry officials said.

Higher production will help the south Asian country reduce imports of pulses in the 2018-19 fiscal year starting April 1 and could allow it to avoid buying overseas wheat for the first time in three years.

Farmers are likely to expand the area given over to chickpeas by nearly 20 percent, said Pravin Dongre, chair of the India Pulses and Grains Association.

“Chickpeas gave better returns to farmers than oilseeds,” Dongre said. “Initial reports are indicating a significant jump in sowing.”

Chickpea, also known as chana, is the main winter-seeded pulse crop in India.

India, the world’s biggest importer of pulses, shipped in 6.6 million tonnes of mostly peas in fiscal 2016-17.

The government’s decision to raise the chickpea support price by 10 percent and a recent move to impose a 50 percent import duty on peas will lure farmers to plant chickpea, said Nitin Kalantri, a pulses miller based at Latur in Maharashtra.

In 2016-17, India’s pea imports jumped 41 percent from a year earlier to a record 3.17 million tonnes.

India imports peas mainly from Canada, Russia, the United States and France.

Wheat acreage will likely increase by five percent, said Harish Galipelli, head of commodities and currencies at Inditrade Derivatives & Commodities.

“Wheat prices are stable. Government has raised minimum support price and import duty. This will certainly encourage farmers to expand area.”

The world’s second biggest wheat producer earlier this month doubled the import tax on wheat to 20 percent.

In October, India raised the price at which the federal government will buy new-season wheat from local farmers by 6.8 percent to US$7.33 per bushel. The Minneapolis spring wheat December contract is trading around $6 a bu. and Kansas and Chicago winter wheats are both around $4.10.

An expected increase in wheat production to a new high and rising stockpile meant India would not need to import wheat in 2018-19, said an official with the state-run Food Corp. of India.

Wheat stocks with government agencies stood at 23.9 million tonnes as of Nov. 1, up 27 percent from a year ago following record production in 2017, added the official, who declined to be named.

India has imported wheat for the past two years after local production fell because of successive droughts in 2015 and 2016.

The country imported 5.75 million tonnes of wheat in 2016-17, the most in a decade. India imports wheat mainly from Ukraine, Australia, Bulgaria and Russia.

Ample rainfall in October and higher-than-normal water level sin reservoirs will ensure better yields in the current season, said Galipelli.

India’s wheat output in 2017 rose 6.7 percent from a year earlier to a record high 98.38 million tonnes.

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