India in Biggest Wheat Import Deal Since 2010 as Rains Damage Crops
India, the world’s second biggest wheat consumer and producer, has purchased 80,000 tons of prime wheat from Australia for April – May shipments in recent deals, three trade sources have told Reuters. This activity marks the biggest wheat importation by the country in five years as heavy rains damage its domestic crop.
In 2010, India imported 200,000 tons of wheat, according to U.S. Department of Agriculture (USDA) data, however since that year shipments have been lower due to improved domestic production.
This season, heavy and untimely rains hitting the country’s main northern and central grain-growing regions are casting doubt as to the quality and output of this year’s wheat harvest, after the top high protein wheat producing states of Madhya Pradesh and Rajasthan have experienced the worst damage.
As of March 1, wheat stocks held by the state-run Food Corporation of India totaled 19.52 million tons – far above the goal of 4 million tons, however, much of these stocks are more than two years old and may be of low quality.
Other factors driving up imports are the recent declines in global wheat prices and freight rates. In many cases, it is proving cheaper for Indian millers to import wheat from overseas rather than pay for transportation of cargoes from the central or northern production centers of the country.