Wheat traders and industry representatives in India expect that the subcontinent is to buy large amounts of wheat on the world market in the coming months. That could lift wheat prices from their 10-year low.
The Indian wheat production has declined in the last two years significantly behind its maximum quantity from the year 2014 and has ensured that inventories to their lowest levels of the past decade have fallen and drove prices to a record high. Experts expect there soon even higher prices.
In dien wheat has bought this year already 600,000 tonnes and therefore more than in the last nine years. Experts expect that soon the import tariffs of 25% will abolish the Government in Delhi, so the imports will be cheaper and no bottleneck in the country.
The supply situation is described by the milling industry in the country as very serious. It calls for a revision of import policy to bring the market back into the lot. Domestically, there are virtually no free offers for the mills. The flour production is currently well below the amount that is before the Government.
A wheat import from India, which is second largest producer as well as the second largest wheat consumer in the world, could bring global wheat prices from their depression, although world wheat stocks are estimated to be the record volume of 252,8 million tons. It rarely happens that India buys wheat from abroad. In 2006, India bought last around seven million tons. At that time, global production was long but not so high as it is today. The world market grew by 50%, as India stepped up as buyers. But now, India's power Minister says that there is no reason to panic. He has to understand that they have the situation under control and see currently no supply problems. However, to encourage the private traders and Mills to buy as much wheat as possible. On the world market, there are finally enough and there is also the possibility to reduce import duties, or to abolish.
Trade and industry experts expect that soon at least four to six million tons will be bought wheat on the world market. How tight is the supply in India, shows that in the last week only 500 tons of flour from State stocks were released, instead of the usual 5,000 tons. Only after protests increased the amount to 2,000 tons.
In June rose to a record high wheat prices in India and spread to the world market price rose to an all-time high. India's Ministry of Agriculture estimated the year's wheat crop to 93.5 million tons (py: 86,53) is the trade but by only 84 million tons. The State reserves were on August 1 in India at 26.9 million tonnes with sharply declining trend. Retrieve 2.5 to 3 million tonnes currently per month, otherwise there are 1.5 to 2 million tons. Therefore it is estimated the final data in April only 5 to 6 million tons. The reserve was set at 7.5 million tonnes by 2010 (on April 1). In the year 2016/17, the consumer will be already 93.1 million tons while there were eleven million tons of less in the year 2010/11.
Due to the very high stocks of wheat on the world market, India's influence on the world market price should be not as large as in 2006. For the suppliers from Australia, Indian demand however would be a godsend. The world's fourth largest wheat exporter expects a wheat crop of 28 million tons this year and so far the sales disappointed.
