100 million tonnes: Amount of wheat Indians are likely to eat in 2016-17

Closing stocks of wheat with Central agencies as on March 2017 is projected to be 10 mn tn higher

Indians are expected to consume over 100 million tonnes of wheat in 2016-17 marketing year that will end in March if Centre’s production estimates and trade’s import numbers for the year are correct.

The government on Wednesday, as per its second advanced estimate, said that wheat output in 2015-16 crop year which is marketed till March 2017 is around 92.29 million tonnes. This is lower than its earlier estimate of 93.5 million tonnes.

Assuming that the production numbers are accurate, the 2016-17 season started with an opening wheat stocks of around 14.5 million tonnes with the Food Corporation of India (FCI). 

This when added to the total estimated production of 92.29 million tonnes, takes the total availability from domestic crop at 106.7 million tonnes. 

That apart, trade sources said that India is expected to import not less than 5.5 million tonnes of wheat in 2016-17. This takes up the availability to almost 112.2 million tonnes.

The closing stocks of wheat with Central agencies as on March 31, 2017 is projected to be around 8-10 million tonnes. 

Even if the ending stocks are towards the higher end of this band, would mean that India has consumed over 102 million tonnes of wheat in 2016-17 crop marketing year that will culminate in March.

“Till last few years, India’s total annual wheat consumption was around 91-92 million tonnes, assuming that there is yearly increase of 1.3 per cent in consumption, 2016-17 numbers show that wheat consumption in the country has seen a staggering rise in 2016-17,” a leading trader said.

The Central government estimates India’s wheat production in 2016-17 marketing year to be around 92.29 million tonnes, but trade sources said it is much lower and could be below 90 million tonnes. The USDA had pegged the production at 86 million tonnes. 

The government first lowered the wheat import duty from 25 per cent to 10 per cent and later waived it off completely as wheat flour (atta) prices showed a rising trend. Trade sources said they have already contracted around 5.5 million tonnes of imported wheat of which around 4.5 million tonnes has already been disposed off to buyers. 

The remaining will also be consumed in the coming weeks. 

This also means that going forward, in 2017-18 wheat marketing year that will start from April, private traders might continue with their imports and purchase around 2-3 million tonnes of more wheat from outside the country.

All this hinges on how reliable 2017-18 wheat estimates are, where the Centre believes production is expected to be a record 96.6 million tonnes, provided there is no adverse weather impact on the standing crop.

Wheat Balance Sheet (2016-17) marketing year

Opening Balance with FCI (as on April 1, 2016)	14.5 million tonnes
Estimated Production (as per second advance estimates)	92.29 million tonnes
Estimated Import by Pvt Traders	5.5 million tonnes

Total 112.29 million tonnes (Less) Expected Closing Balance With FCI (as on March 31, 2017) 8-10 million tonnes Total Wheat Consumption During The Year 102-104 million tonnes Source:Traders and government bodies