India’s 2021-22 wheat output seen rising on higher yields

India’s wheat harvest is expected to rise to 110 million mt in the crop year 2021-22 (July-June), from 108 million mt a year ago, as higher yields offset a drop in the planting area during the current crop season, according to a S&P Global Platts survey of 11 analysts and traders.

“Although there is a drop in the planted area, the output is likely to be higher,” an official with a multinational grain trading firm said. “The bigger harvest is likely due to expected higher yields this season.”

Trade estimates for the country’s 2020-21 wheat output were slightly lower than the government’s projection of 109.5 million mt wheat harvest during the year.

Wheat, the second-largest food grain sown in India after rice, is planted during October-November and harvested in February-March. India’s agriculture ministry is expected to release its estimates later this month.

Wheat was sown across 34.24 million hectares as of Jan. 28, down 3.5% on the year, according to India’s agriculture ministry.

The seeded area under the food grain increased sharply over the year in major states, such as Madhya Pradesh and Bihar, while remaining steady on the year in states, such as Punjab, Rajasthan, and Gujarat. The sown area declined on the year in Uttar Pradesh and Haryana.

“Market participants see the output rising despite the fall in area in key states, like Uttar Pradesh and Haryana, due to recent rainfall in major growing region,” a trader with a multi-national grain trading company said.

Winter rains in India between Jan. 1 and Feb. 3 were 115% above average at 40.2 mm, according to India’s Meteorological Department. In central and northwest India — the key wheat growing regions — showers were higher than the average by 177% and 122%, respectively.

Showers during the ripening stage typically lift the crop’s yields, increasing the overall output, an agricultural scientist with Indian Council of Agricultural Research told Platts.

India’s wheat exports from the crop produced in crop year 2021-22 are likely to fall in the marketing year 2022-23 (April-March), following a surge in MY 2021-22.

India exported 4.1 million mt of wheat during April-November, nearly six-fold higher on the year, according to the data from Agricultural and Processed Food Products Export Development Authority.

The US Department of Agriculture expects India to ship around 5.25 million mt during MY 2021-22.

Traders anticipate a decline in India’s export shipments in the next marketing year, as supplies from Australia and Argentina have risen.

India’s exports are heavily dependent on export prices, and shipments may take a hit with FOB prices from other origins softening.

FOB export prices of wheat from major exporters, such as Russia, Ukraine, and Australia, declined 5%-7% over the past two months, according to S&P Global Platts data.

Importers are also concerned about the quality of the Indian wheat, with most Southeast Asian flour millers preferring Black Sea and Australian wheat.

“Indian wheat is dusty and when put in the milling process, the characteristics are not suitable for everyone,” said a trader based in Indonesia.

Rising supplies from other regions could limit sellers’ options in the next trading year. Some Indian traders were still optimist because of poor output in North America and tightening supplies from Black Sea as a result of escalating tensions between Russia and Ukraine.

S&P Global Platts

Tags: harvest, prices, wheat, India, yields, output, food grain, planting area