Indian Wheat, Rice Up Slightly
22 February 2006 India’s wheat crop is expected to be slightly higher in 2006/07 over 2005/06, to 73 million tons on 26.6 million hectares (Ha). In 2005/06, India produced 72 million tons, according to the US Department of Agriculture’s Foreign Agriculture Service (USDA-FAS).
Most of the increase in planted area is likely to be in the states of Uttar Pradesh, Gujarat, and Bihar, prompted by high wheat prices and better soil moisture at planting. This increase was somewhat offset by a decline in the state of Madhya Pradesh, which faced below-normal monsoon rains last year and poor winter rains, leading to below-average planting conditions. In the main surplus wheat growing states of Punjab and Haryana, as well as Rajasthan, where the crop is mostly irrigated, production is forecast to be nearly the same, or slightly lower.
The crop has not felt much in the way of disease pressure, causing farmers to cut back on their chemical applications.
Demand for wheat has risen at a much quicker pace than production, as population growth alone may bring an additional demand of 1.3 to 1.5 million tons of wheat per year, and there has been no compensating increase in the production of other cereal crops, such as rice and coarse grains. As such, India is forced to lean more heavily on imported wheat, and the Indian government already announced its decision to import 500,000 tons of wheat, duty-free, for March through May 2006 arrival, and to further review the situation in April or May. Additional wheat imports are likely in 2006/07, due to lower carry-over stocks, a modest growth in production, and lower procurement this year.
A similar situation is shaping up for rice. Mostly planted in summer and harvested in the fall and early winter, Indian rice is forecast at 90 million tons from 44.5 million Ha, compared with 2005/06 estimated production of 87 million tons — of course, the forecast production is assuming the critical south-west monsoon rains are normal this summer, and rice production in India has historically undergone large fluctuations contingent on rainfall.
Consumption is forecast to increase to 85 million tons, almost 2% higher than the estimated 2005/06 consumption. The government has initiated an ambitious program to provide rural employment through an employment guarantee program, which should result in increased demand for rice in rural areas. This has a good chance of pushing demand for rice beyond India’s capacity to produce it, especially under less than ideal growing conditions.
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