Heavy Crop Losses to Cost India its Place as a Wheat Exporter

The U.S. Department of Agriculture’s (USDA) New Delhi bureau cut its forecast for India’s wheat harvest once again by 5 million tons to 87 million tons due to “significant crop damage” caused by strong winds and hailstorms and “unprecedented rains”. U.S. officials now state that India is positioned to return to being a net wheat importing country.

The latest production estimate cut indicates that India, the world’s second biggest wheat producing country after China will see a total production decline of 8.85 million tons – the biggest year on year decline since the 1950’s.

The central and north western regions of the country experienced historically heavy and intermittent episodes of rainfall between February and the third week of April, leading the bureau to state, “Cumulative rainfall during March through the third week of April was nearly double the normal in these area.”

As a result of these developments, India will likely have to import 1 million tons of wheat in 2015/2016 – the highest amount in eight years. Indeed, after the country achieved exports of 6.8 million tons in 2012/2013, buy-ins are expected to outpace shipments this season for the first time in five years.

Overall news for the Indian wheat sector this season has been largely negative. Indian officials estimate that 6.3 million hectares – twice the size of Belgium has been adversely affected by severe weather, resulting in difficulties involving pollination, seed setting, grain development, kernels size, head loss due to lodging, and higher incidents of rust. Despite this, production estimates still vary widely with some as low as 80 million tons, while the International Grains Council cut its estimate by 1.9 million tons on April 23 – only 2% year on year.