Wheat imports surge to decade high on shortage, dry weather.

NEW DELHI: India may import the most wheat in a decade as output declines in the world's second-biggest producer.

Imports may total 5 million metric tonnes in 2016-17, the most since 2006-07, according to the median estimate of seven traders surveyed by Bloomberg. Production is set to decline 1.8 per cent to 85 million metric tonnes in the year through June from a year earlier, according to the median estimate of nine traders and flour millers.

That's the lowest since 2009-10 and compares with the government's estimate of 94.8 million tonnes. "One of the most critical issues is what's the production number going to look like," Abdolreza Abbassian, senior economist at the United Nations' Food & Agriculture Organisation in Rome, said. "There will be higher imports than a year earlier, but nothing too big because of the large stocks."

Even as dry weather curbs output for a second year, stockpiles at the start of May were 14 per cent bigger than the government's July 1 target, Food Corp of India data show. While India decided last week to extend its 25 per cent import duty on wheat, some southern flour mills are already sourcing grain from overseas. Demand for wheat is robust and steadily increasing, according to BK Anand, head of grain and oilseeds business, Cargill India.

Rise in futures Wheat for September delivery on the Chicago Board of Trade rose as much as 0.5 per cent to $4.90 a bushel on Tuesday. The contract has declined about 10 per cent in the past year. Futures on the National Commodity & Derivatives Exchange in Mumbai climbed about 22 per cent in the period and traded at Rs 1,792 per 100 kg on Tuesday. Wheat purchases by the government from farmers dropped 17 per cent to 22.93 million tonnes as of June 17 from a year earlier, according to Food Corp data.

Source : economictimes.indiatimes.com