A bumper wheat harvest in India is replenishing government stockpiles at a rapid pace, easing fears that the country would need to import wheat for the first time since 2017. This turnaround could weigh on global wheat prices, which have already seen a sharp decline from 2022 peaks.India, the world’s second-largest wheat producer, had banned exports in 2022 and extended the curb through 2023 and 2024 after extreme heat damaged crops and depleted reserves. This sparked speculation of impending imports. However, early signs from this year’s procurement season suggest India is on track to meet domestic needs comfortably.“After barely scraping through without imports in recent years, the country finally seems to be out of the woods and free from the fear of having to import wheat,” said Amit Takkar, head of New Delhi-based farm consultancy Conifer Commodities, reported news agency Reuters.The Food Corporation of India (FCI), the state-run procurement agency, has so far bought 29.7 million metric tons of wheat from farmers — the highest in four years. Union Minister Pralhad Joshi recently projected that FCI’s total procurement could reach 32 to 32.5 million tons this year, adding to the 11.8 million tons already in stock at the beginning of the marketing year on April 1.With a total stockpile expected to touch 44 million tons, India will far exceed the 18.4 million tons required annually to run its massive food welfare programme, which provides free grain to nearly 800 million citizens.Farmers are keen to sell to the government this year, incentivized by state bonuses and stable procurement prices. Many, like Sunil Dubey from Madhya Pradesh — a key wheat-growing state known for high-quality varieties used in pizza and pasta — have sold their entire harvest to FCI.“The weather was better this year compared to last year,” Dubey said, crediting milder March temperatures for the yield boost.Favourable weather, improved seed varieties, and sufficient soil moisture from a good monsoon contributed to the stronger output. Additionally, a 15% surge in wheat prices over the past year encouraged more farmers to plant wheat.India’s wheat inventories in government warehouses jumped 57% year-on-year to a three-year high as of April 1. In the previous fiscal year, the FCI sold over 10 million tons of wheat into the open market to stabilize prices, but lower stocks in early 2024 had limited its ability to intervene, resulting in record domestic prices earlier this year.Now, with healthier reserves, officials say the country is better positioned to control prices and manage supply without imports. A senior government official confirmed that India has no intention to import wheat or reduce the existing 40% import tax.“Because of good production and procurement, we have ample quantities in hand,” the official said, declining to be named. “There will not be any imports.”Despite the improved situation, the government is not planning to lift the export ban either, choosing instead to focus on rebuilding reserves.While the agriculture ministry has estimated this year’s harvest at a record 115.4 million tons, the Roller Flour Millers Federation of India has projected a more modest 109.63 million tons. Last year’s actual output was pegged at 105.85 million tons by the millers’ body, compared to the government’s estimate of 113.29 million tons.“Despite our conservative estimate, we know that production will be around 4 million tons higher than last year,” said Navneet Chitlangia, president of the flour millers’ federation.India’s return to self-sufficiency in wheat may further depress global wheat prices, which have already fallen more than 50% from 2022 highs and recently hit their lowest level in nearly five years. With strong output in other major exporters like Argentina, Australia, and Canada, and lower demand from top buyer China, the global wheat market may continue to see downward pressure.
