India: Wheat production takes a hit, prices surge to an all-time high

Wheat prices have surged to an all-time high, costing between Rs 32 and 36 per kilogram depending on quality. This has been one of the big reasons for inflation for cereals rising nearly 13 percent in November.

India’s wheat production has actually declined 3 percent this year. So against the projected 120 million tonnes of production, the country has produced only 106 million tonnes of wheat. One big reason the wheat prices have surged to levels not seen in years.

Farmers blame this fall in production and the poor quality of the harvest on the heat wave that has disrupted the cultivation season. The month of March was the hottest in the last 122 years. The prolonged and severe heat not only killed much of the crop, but also resulted in shriveled grain. India was also a little late in banning wheat exports.

Experts say wheat prices are unlikely to drop before March next year, which is when the new crop will reach the market. They believe next year will be better in terms of both production and prices and estimate that India’s wheat production will increase by 8-9 percent. But a heat wave could throw these estimates for a loop… especially if this heatwave is more severe than those of the past years.