Don’t export tomorrow’s wheat surplus today |
India is not short of wheat. The question is whether it knows enough about the crop it will harvest six months from now to export freely today.
On August 24, wheat exports moved from “prohibited” to “free”, following calibrated permissions of 2.5 MMT each in February and April. The balance sheet looks comfortable. Production is officially estimated at 120.7 MMT, though trade estimates are closer to 110 MMT. Procurement reached 35.76 MMT, against about 30 MMT last year. Central Pool wheat stocks stood at nearly 48 MMT on September 1, more than twice the October 1 buffer norm of 20.5 MMT. But a buffer surplus is not an export surplus. Today’s abundance comes from a crop already harvested. The crop that must replenish these stocks will be sown over the next two months, and there are reasons for caution.
The monsoon is about 15 per cent below normal, and the risk is uneven. Punjab and Haryana face large rainfall deficits, but their heavily irrigated wheat can lean on groundwater, at a cost to aquifers and state power subsidies. Rajasthan is more exposed: Rainfall is about 25 per cent below normal and reservoir........