India May Harvest Record Wheat Crop on Rainfall

By Pratik Parija and Thomas Kutty Abraham
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Aug. 19 (Bloomberg) -- Farmers in India, the world's second-biggest wheat producer, may increase planting starting October because of above-average rainfall, possibly helping the nation gather a record harvest for a second year.

``Rains are good and conditions seem to be very favorable'' for wheat plantings this year, Federal Food Secretary T. Nanda Kumar said in an interview in New Delhi yesterday.

The South Asian country may have harvested a record 78.4 million metric tons of the grain in the year ended June 30, up 3.4 percent from the previous year, the farm ministry has said.

A bigger harvest may help Prime Minister Manmohan Singh's government head off a food shortage that has stoked inflation to a 16-year high. India imported 1.79 million tons of wheat since July 2007 to build its stockpiles, helping fuel last year's 77 percent gain in prices on the Chicago Board of Trade.

``I don't see a possibility of any imports until April,'' said Kumar, who's responsible for food policy in the world's second-most populous country.

Rainfall has been at least 25 percent above normal in the main wheat-growing states of Uttar Pradesh, Punjab and Haryana in the June 1-Aug. 13 period, according to the weather office. Showers across the nation have been 2 percent more than average.

``Rains have increased the moisture level in the soil and will encourage farmers to boost sowing,'' said M.K. Dattaraj, president of Roller Flour Millers Federation of India, by phone from the southern city of Bangalore.

Rice Sowing

Plentiful rain may also boost the country's rice output by 5 percent, Kumar said. Farmers sowed the crop to 28.2 million hectares as of yesterday, compared with 25.6 million hectares a year earlier, according to the farm ministry.

The government may sell as much as 6 million tons of wheat from its reserves between September and March to keep domestic prices affordable, Kumar said. State-owned Food Corp., the country's biggest buyer of food grains, bought a record 22.5 million tons of wheat from farmers this year.

``We have enough stocks in government warehouses, which we always unload if something goes wrong,'' Kumar said. ``We are going to do that.''

Wheat for December delivery declined as much as 2 percent to $8.6725 a bushel and stood at $8.73 at 2:48 p.m. New Delhi time. Prices have fallen 35 percent from their record $13.495 a bushel on Feb. 27.

India's production of food grains such as rice, wheat and lentils in the year ended June probably climbed to 230.7 million tons, more than the 227.3 million tons estimated in April, farm secretary P.K. Mishra said July 9.

Wheat, the country's biggest winter food grain, is planted from October through December. Harvesting starts in March and continues through April.

To contact the reporters on this story: Pratik Parija in New Delhi at pparija@bloomberg.net; Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net.