Business Daily from THE HINDU group of publications
Thursday, Jan 18, 2007
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Business Daily from THE HINDU group of publications Thursday, Jan 18, 2007 ePaper |
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Agri-Biz & Commodities
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Wheat Industry & Economy - Climate & Weather Wheat output: Weather to set course Suresh P. Iyengar
To ensure buffer stocks About 1.5 million hectares earmarked for other cropshave been diverted to wheat, according to Govt estimates. The Government has also extended the facility to import duty-free wheat up to February 28.
Mumbai , Jan. 17 Though the area under wheat cultivation has gone up substantially year-on-year by 7 per cent to 275.55 lakh hectares, the weather condition between January and March - the maturing period of the crop - will dictate the final output. "Weather in the rest of the growing period (January - March 2007) in the growing areas will play a crucial role in determining yield and thus, production. Next 6-8 weeks would play a key role in determining the total output," said an analyst with Kotak Commodities. Last rabi season, unusually high temperatures in the north-west region during February-March reduced wheat yield by as much as 30-35 per cent in some areas, leading to an overall drop in output.
Govt estimates
According to Government estimates, about 1.5 million hectares earmarked for other crops have been diverted to wheat. Further, non-traditional growing States such as Bihar and West Bengal have brought in nearly 10 lakh hectares of additional acreage under wheat this year. Acreage has increased in Bihar (3.8 lakh hectares), Gujarat (2.2 lh), Haryana (0.5 lh), Karnataka (0.6 lh), Madhya Pradesh (4.6 lh), Maharashtra (1.3 lh), West Bengal (0.5 lh), Uttar Pradesh (2.8 lh), as on December 29, 2006. The major reason for the shift to wheat cultivation was on account of firm prices during the sowing period.
Opinion mixed
Market opinions regarding this year's crop appear to be mixed. "Trade and industry are not optimistic about the Government's projection of wheat output in the current season at 74 million tonnes. According to them, wheat output would be 72.8 million tonnes," said an NCDEX research report. To ensure that the buffer stock levels are fully replenished, the Government has extended the facility to import duty-free wheat up to February 28, 2007. However, this has not enthused private importers as global wheat prices have been rising on the back of tight supply conditions due to fall in output for the second consecutive year. "With tight global supply, wheat prices are ruling near $240 (Rs 10,800) a tonne level and the landed cost works out to around Rs 12,000 a tonne, while price in the domestic market has come down to Rs 10,200 a tonne," said Mr Jagdish Shah, a Delhi-based miller. The global wheat output in 2006-07 is projected at 588.56 million tonnes, while consumption is seen at 615.20 million tonnes, according to the USDA data. Global carryover stocks are seen at 120.74 million tonnes.
More Stories on : Wheat | Climate & Weather | Cultivation
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