Crop storage has been a problem in India for some time, and this year its hitting hard, as wheat that could have fed up to 210 million people annually is beginning to rot because of lack of warehouses to put it in.
According to estimates by the Indian government, about 17.8 million metric tons of wheat is at risk, where it is stored outdoors under tarps, while the monsoon season begins to hit.
Unfortunately, the price of food and inflation has risen in the double digits for months, and to export the wheat to generate income which could be used in helpful ways, could result in large protests, and possibly riots.
So the grain continues to mount up rather than be used for some good. The only ones being helped by it at this time is the dogs ... literally.
The other hard place the government finds itself in is it is unable to buy wheat because it would increase the growing deficit in the country, as it would have to do it at subsidized prices.
But Biraj Patnaik, a key adviser to the Supreme Court of India, said, "The government is acting like the biggest hoarder. It's unconscionable and unacceptable."
"You're going to end up losing as much money on food grains that go bad than the subsidies would incur if they distributed it to the poor," he added. "It's completely irrational and illogical not to distribute it right away.
A growing number of people are pushing for the privatization of the market in order to increase investment in the sector and drive down prices, and create a better storage and supply channel.
Showing posts with label India Wheat. Show all posts
Showing posts with label India Wheat. Show all posts
Saturday, August 7, 2010
Wednesday, July 8, 2009
India's Wheat Exports Limited by High Domestic Prices
India wheat exports down in fiscal year
In the midst of high local prices, projections are it will limit India's wheat and wheat product exports in the fiscal year ending March 2010, although the country has eased an earlier ban on exports this month to allow limited shipments.
On July 3, the federal government allowed three state-run firms - MMTC, STC and PEC - to export 300,000 tons each of wheat by March 31, 2010. In addition, private companies were allowed to export another 650,000 tons in wheat products, also by the same date.
But that is unlikely to lead to a surge exports.
"International prices are around $195 to $198/ton and Indian wheat costs around $232/ton," said Veena Sharma, secretary of Roller Flour Millers Federation (RFMF) of India.
She said exports are feasible only if international prices rise in the coming months.
"Unless there is a government subsidy of $30-$40/ton, (wheat exports are) not feasible," said Ajay Goyal, president of Maharashtra Roller Flour Millers Association (MRFMA).
However, the formal government order allowing the exports made it clear that "no subsidy will be given" to exporters.
India's federal government had imposed a ban on exports of wheat and wheat products in December 2007 to help curb inflation.
Since then, domestic wheat stocks have reached comfortable levels following two bumper crops and on carryover stocks from previous imports.
Even if some exports take place now, those could mainly be to neighboring countries, traders said.
"We may have to look to export to countries like Bangladesh, Nepal, Bhutan and Maldives to save on freight costs," said a state-run trading firm official, who did not want to be identified.
However, industry officials ruled out the possibility of wheat exports to Pakistan because there is no supply shortage there.
Meanwhile, state procurement of wheat has been on the rise following higher support prices.
Farmers sold more wheat to government agencies, rather than to private companies, as the state-fixed price of 10,800 rupees ($223)/ton was attractive, and relatively higher than even global prices, traders said.
Latest government data showed local wheat purchases by government agencies have already touched a record 25.06 million tons since purchases started in April, and more was trickling into state granaries.
In its annual budget announcement Monday, the government said it would step up subsidized sale of grains to poor consumers in the coming months.
With the chance of wheat exports looking slim, industry officials were more hopeful about exports of wheat products such as flour and semolina.
"Although there is not so much of demand for wheat products in the global market now, there could be some demand coming from the Middle East," said A N Gupta, chairman of Wheat Products Promotion Society of India.
He said demand for value-added wheat products from India is likely to be much more than the demand for the grain itself in global markets.
India wheat exports down in fiscal year
In the midst of high local prices, projections are it will limit India's wheat and wheat product exports in the fiscal year ending March 2010, although the country has eased an earlier ban on exports this month to allow limited shipments.
On July 3, the federal government allowed three state-run firms - MMTC, STC and PEC - to export 300,000 tons each of wheat by March 31, 2010. In addition, private companies were allowed to export another 650,000 tons in wheat products, also by the same date.
But that is unlikely to lead to a surge exports.
"International prices are around $195 to $198/ton and Indian wheat costs around $232/ton," said Veena Sharma, secretary of Roller Flour Millers Federation (RFMF) of India.
She said exports are feasible only if international prices rise in the coming months.
"Unless there is a government subsidy of $30-$40/ton, (wheat exports are) not feasible," said Ajay Goyal, president of Maharashtra Roller Flour Millers Association (MRFMA).
However, the formal government order allowing the exports made it clear that "no subsidy will be given" to exporters.
India's federal government had imposed a ban on exports of wheat and wheat products in December 2007 to help curb inflation.
Since then, domestic wheat stocks have reached comfortable levels following two bumper crops and on carryover stocks from previous imports.
Even if some exports take place now, those could mainly be to neighboring countries, traders said.
"We may have to look to export to countries like Bangladesh, Nepal, Bhutan and Maldives to save on freight costs," said a state-run trading firm official, who did not want to be identified.
However, industry officials ruled out the possibility of wheat exports to Pakistan because there is no supply shortage there.
Meanwhile, state procurement of wheat has been on the rise following higher support prices.
Farmers sold more wheat to government agencies, rather than to private companies, as the state-fixed price of 10,800 rupees ($223)/ton was attractive, and relatively higher than even global prices, traders said.
Latest government data showed local wheat purchases by government agencies have already touched a record 25.06 million tons since purchases started in April, and more was trickling into state granaries.
In its annual budget announcement Monday, the government said it would step up subsidized sale of grains to poor consumers in the coming months.
With the chance of wheat exports looking slim, industry officials were more hopeful about exports of wheat products such as flour and semolina.
"Although there is not so much of demand for wheat products in the global market now, there could be some demand coming from the Middle East," said A N Gupta, chairman of Wheat Products Promotion Society of India.
He said demand for value-added wheat products from India is likely to be much more than the demand for the grain itself in global markets.
India wheat exports down in fiscal year
Monday, November 10, 2008
Where is Wheat Price Per Bushel Going in 2009
Wheat ending stocks for 2008-2009 are slightly higher than trade estimates of 594 million-bushel-average, as well as the 601 million-bushel average the USDA projected for October.
The overall global wheat production has risen, while some individual countries fluctuate. Argentina for example announced its production fell by 1 million metric tons to 11 million, while India has had such a good wheat harvest this year they're making two million tons of available for export.
Wheat supplies will also put competitive pressure on corn because of the large supply this year.
Because of the huge supply, there won't be much happening with wheat that will surprise anyone.
As far as prices, soft red winter wheat has "the most downside room; some of better classes can hold in a bit more strongly."
The global wheat market will continue to be bearish, even as drought conditions pressure certain countries like the Phillipines, Argentina and most recently China. Even with that pressure, the price for wheat per bushel in 2009 shouldn't be affected too much, and it shouldn't be counted on to push up wheat prices a bushel anytime soon.
There will be plenty of wheat for sale, and that will keep wheat prices per barrel down, as the huge wheat surplus this year, especially in the European Union and Black Sea region being major contributing factors. There has also been a huge wheat crop in Canada this year to add to the overall wheat picture.
Considering India wheat being so prolific this year as well, and you see how wheat prices per barrel in 2009 will struggle to rise, even when you take into account quality wheat. In these types of economic downturns, survival is more important than the protein content of wheat, and being able to afford the cost of food in general, and wheat in particular is the guiding factor behind where prices of wheat per barrel will lead to.
It's hard to tell how much wheat will be planted in 2009 as well, with fertilizer costs playing a big factor in the decision of whether to plant, and if wheat is planted, how much fertilizer can be used for the wheat and still be cost effective. Fertilizer prices have gone down some, but low wheat prices per barrel make it difficult to top dress wheat with nitrogen fertilizer and still be profitable in a meaningful way for those putting their wheat up for sale.
The most recent projections for wheat exports from the USDA stand at 210 million bushels, an extraordinary third less than 2008. And as of January 1, wheat sales have plunged by close to 40 percent, with only 158 million bushels sold in the U.S.
While there is some opportunity for wheat exports and wheat prices per barrel to rise in 2009, it will depend mostly on weather conditions for the U.S. wheat crop, along with the number of acres planted after a fairly poor year. The high protein sector may offer some opportunity for U.S. farmers, but wheat quality from other countries, and the above-mentioned factors will determine the price per bushel of wheat in 2009. There's no way of knowing at this time where all this will head, as weather is the key factor, and that of course has yet to be played out. Other countries have suffered quality wheat production, which could help wheat prices per bushel rise, but that will highly depend on the quality of wheat produced in the U.S., which again, will be determined by the weather conditions in the spring months of 2009.
The overall global wheat production has risen, while some individual countries fluctuate. Argentina for example announced its production fell by 1 million metric tons to 11 million, while India has had such a good wheat harvest this year they're making two million tons of available for export.
Wheat supplies will also put competitive pressure on corn because of the large supply this year.
Because of the huge supply, there won't be much happening with wheat that will surprise anyone.
As far as prices, soft red winter wheat has "the most downside room; some of better classes can hold in a bit more strongly."
The global wheat market will continue to be bearish, even as drought conditions pressure certain countries like the Phillipines, Argentina and most recently China. Even with that pressure, the price for wheat per bushel in 2009 shouldn't be affected too much, and it shouldn't be counted on to push up wheat prices a bushel anytime soon.
There will be plenty of wheat for sale, and that will keep wheat prices per barrel down, as the huge wheat surplus this year, especially in the European Union and Black Sea region being major contributing factors. There has also been a huge wheat crop in Canada this year to add to the overall wheat picture.
Considering India wheat being so prolific this year as well, and you see how wheat prices per barrel in 2009 will struggle to rise, even when you take into account quality wheat. In these types of economic downturns, survival is more important than the protein content of wheat, and being able to afford the cost of food in general, and wheat in particular is the guiding factor behind where prices of wheat per barrel will lead to.
It's hard to tell how much wheat will be planted in 2009 as well, with fertilizer costs playing a big factor in the decision of whether to plant, and if wheat is planted, how much fertilizer can be used for the wheat and still be cost effective. Fertilizer prices have gone down some, but low wheat prices per barrel make it difficult to top dress wheat with nitrogen fertilizer and still be profitable in a meaningful way for those putting their wheat up for sale.
The most recent projections for wheat exports from the USDA stand at 210 million bushels, an extraordinary third less than 2008. And as of January 1, wheat sales have plunged by close to 40 percent, with only 158 million bushels sold in the U.S.
While there is some opportunity for wheat exports and wheat prices per barrel to rise in 2009, it will depend mostly on weather conditions for the U.S. wheat crop, along with the number of acres planted after a fairly poor year. The high protein sector may offer some opportunity for U.S. farmers, but wheat quality from other countries, and the above-mentioned factors will determine the price per bushel of wheat in 2009. There's no way of knowing at this time where all this will head, as weather is the key factor, and that of course has yet to be played out. Other countries have suffered quality wheat production, which could help wheat prices per bushel rise, but that will highly depend on the quality of wheat produced in the U.S., which again, will be determined by the weather conditions in the spring months of 2009.
Wednesday, November 5, 2008
Wheat Drops to Lowest Level in Three Weeks
The price of wheat in the U.S. fell to its lowest level in three weeks as traders aren't optimistic about the comming Department of Agriculture report on export sales data.
Expectations are the global crop will dampen the demand for American wheat, as production has increased in emerging countries.
Wheat that was inspected for export from the U.S. came in at about 13.2 million bushels for the week ending October 30, a drop of about 40 percent from the week ending October 23.
India is especially making an impact on exports this year, as it announced it will probably make about 2 million tons available on the export market. India could end up with a record wheat crop this year of 78.5 million tons.
Worldwide wheat production through June 30 is projected to leap by 12 percent to a record 683 million metric tons. That's the equivalent of about 25.1 billion bushels.
Wheat for December delivery dropped to $5.372 a bushel today on the Chicago Board of Trade.
Expectations are the global crop will dampen the demand for American wheat, as production has increased in emerging countries.
Wheat that was inspected for export from the U.S. came in at about 13.2 million bushels for the week ending October 30, a drop of about 40 percent from the week ending October 23.
India is especially making an impact on exports this year, as it announced it will probably make about 2 million tons available on the export market. India could end up with a record wheat crop this year of 78.5 million tons.
Worldwide wheat production through June 30 is projected to leap by 12 percent to a record 683 million metric tons. That's the equivalent of about 25.1 billion bushels.
Wheat for December delivery dropped to $5.372 a bushel today on the Chicago Board of Trade.
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