Indian wheat exports to continue

28 Mar, 2014 03:00 AM
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A run of seven consecutive above-average years has made exporting a reality for the last few years

INDIA will continue to be a low-cost exporter of wheat over the next 12 months, according to a United Arab Emirates (UAE) based grain buyer, specialising in the Indian wheat industry.

Speaking at the Global Grains Asia conference in Singapore earlier in the month, Mandeep Singh Bindra, of Emirates Grain Products, said Indian production was likely to exceed domestic demand this year.

With harvest due to commence in April, it is likely India will again come to the market to export grain, providing government export licences are issued.

The Indian government has been notoriously cautious about issuing export licences in the past, concerned about food security in a nation of 1.2 billion people.

However, a run of seven consecutive above-average years has meant exporting has been a reality for the last few years.

The government is also conscious of the high waste rates in a country without good grain storage infrastructure and recognises it is better to earn dollars for grain rather than have it spoil.

Mr Bindra said with relatively reliable monsoon rains of late and improved production methods, yields were going up, and as farmers saw the results, more were producing wheat, so the area planted is also growing.

And Indian wheat is going to provide some serious competition for Australian wheat into price conscious markets, at least until new season Black Sea crop comes on line, at which stage he said it was likely exports from the subcontinental nation would halt.

Mr Bindra said on a like-for-like basis you could get Indian wheat $27/t cheaper than Australia’s APW grade product.

However, there will be limits in terms of exports due to the policies of individual Indian states.

“A price of $US250/t FOB translates to about $US200/t on-farm,” Mr Bindra said.

“In many cases, Indian states guarantee $US225, even $US250/t, so why would growers sell to private buyers?”

Mr Bindra has production for 2014 pegged at 93mt, and domestic consumption at 89.1mt.

In terms of applications, Mr Bindra said Indian wheat was well suited to the flat breads which are a staple in regions such as the Middle East and other subcontinental nations.

The majority of the wheat goes out from the west coast, where it is freight advantaged into the Middle East and Africa, with the Gujarati port of Kandla the largest wheat exporting centre.

He said loading times were generally speedy and with short transit times.

However, he also pointed out downsides to Indian wheat, such as the fact it is not able to be segregated.

Although it generally has good protein compared to Black Sea grain, it suffers from higher rates of foreign material.

Mr Bindra said Indian wheat production was still very much an industry dominated by small scale farmers.

“Over 70 million tonnes of Indian wheat production is grown by those farming less than two hectares.”

He said with such a large proportion of the population involved in agriculture, the government had an interest in ensuring the needs of farmers were met.

With 32pc of the Indian gross domestic product (GDP) generated by agriculture, he said the government was committed to trying to make productivity gains to keep the overall economy growing.

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FarmOnline
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media
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READER COMMENTS

Consolidated
28/03/2014 8:27:43 PM

Yeah right pull the other one. India has al the infrastructure to import grain because it usually imports and little infrastructure for export. In any case, few are interested in taking wheat full of weevils and rats and in heshion bags. Too funnny India you old ratbag you, trying to get wheat prices down.

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