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India’s wettest monsoon in 25 years could bring record 2020 wheat output

india-s-wettest-monsoon-in-25-years-could-bring-record-2020-wheat-output

Wheat production in India could jump to a second consecutive yearly record in 2020 as the wettest monsoon in 25 years is on course to help farmers in expanding the area under the winter-sown crop while also improving yields, industry officials told Reuters on November 29, 2019.

"The area under wheat and yields would rise due to good rainfall. We can certainly produce more than last year's record production," said Gyanendra Singh, director at the state-run Indian Institute of Wheat and Barley Research.

It is also predicted that higher production may contribute to the country's already swelling inventories, potentially forcing the world's second-biggest wheat producer to increase procurement of the grain from farmers and give incentives for overseas sales to support local prices.

According to reports, India grew 102.19 million tonnes of wheat in 2019, as the country received monsoon rains during the June to September season that were 10% above the average rainfall, continuing until October to November. This, in turn, increased soil moisture levels needed for crop sowing.

Government data shows that rainfall played a major role and lifted the water level in the country's key reservoirs to 86% of capacity, as compared to 2018's 61% and a 10-year average of 64%.

Only one wheat crop is grown in India each year, with planting beginning in late October and harvesting in March.

wheat-threshing-India(1)

Image credit: Adam Cohn/Flickr

"Farmers are inclined to expand the area under wheat as its prices are more stable than any other crop due to government buying," said Harish Galipelli, head of commodities and currencies at Inditrade Derivatives & Commodities in Mumbai.

The national capital sets minimum support prices (MSP) for roughly two dozen crops to set a benchmark . However, state agencies mainly purchase rice and wheat at those prices.

For 2020, India has lifted the price at which it purchases locally produced, new-season wheat by 4.6% to 19,250 rupees or 268.22 dollars per tonne.

"After the hike in MSP, wheat planting has become even more attractive for farmers," Galipelli said.

For the time being, dealers said wheat exports from India in 2020 would be challenging because of their comparatively high cost.

Featured image credit: Dakshinamurthy Vedachalam

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