India has ample wheat stocks
India, the world's biggest producer of wheat after China, has enough stockpiles of the grain to meet demand, a finance ministry report said before tomorrow's federal budget announcement. The state-run warehouses had 7.7 million metric tonne on January 1, the report issued on Thursday in New Delhi said. When combined with the arrival of imported wheat, supplies will be sufficient in the financial year ending March 31, the report said. Still, the South Asian nation may import 2 million tonne in the year starting July 1 after dry weather pared output, the US Foreign Agricultural Service said. The country bought 1.8 million tonne a year earlier, supporting a rally in prices of wheat that topped $12 a bushel for the first time in Chicago this week. Wheat for May delivery fell as much as 27.25 cents, or 2.2%, to $12.2275 a bushel in after-hours trading and stood at $12.45 at 12:05 pm Singapore time. The price on Wednesday rose as much as the expanded daily trading limit of $1.35, or 11%, to a record $13.495 after plunging by the same permitted amount. India's production may drop 1.3 million tonne to 74.5 million tonne in the March-April harvest after farmers planted the crop on a smaller area compared with a year ago, the Foreign Agricultural Service said in a report dated February 20. The government, which needs 1 million tonne of the grain each month to distribute to the poor, will start purchases of the new crop in April. It plans to buy 15 million tonne from the farmers, up 35% from a year earlier.