Good wheat crop may bring imports down: FAO

India's wheat import requirement is likely to decline significantly to 3 million tonnes in 2007-08, compared with the exceptionally high 6.6 million tonnes in the previous year, due to increased plantings and favourable weather during most of the growing season, according to the latest report by the Food and Agriculture Organization (FAO).

The report has forecast India's wheat production to touch 73.5 million tonnes this year against 69.4 million tonnes last year and 68.6 million tonnes in 2005. It has also expressed satisfaction on the sowing of the main kharif coarse grains and rice crops for September harvest as it has begun under favourable monsoon. The timely arrival of the southwest monsoon to the country's southern coast and the above 7 per cent average rainfall in June have strengthened the crop prospects, boosting the FAO's forecast this year. However, the outcome of the kharif season would still depend greatly on the performance of the southwest monsoon in July and August, it said.

Meanwhile, the Centre has already asked the State Trading Corporation (STC) to float the wheat import tenders afresh to match the country's requirement and international price trends. In a statement, the government has said that the wheat imports were necessary for ensuring food security and running several state-sponsored welfare schemes.

In order to meet the growing demand, the agriculture ministry had earlier intended to import 5 million tonnes this year to build reserves.

The statement also said that the government has no plans to buy domestic wheat through tenders as it could lead to an increase in local prices and create a shortage in the open market, which caters to two-third of the country's population.

Last May, the government had recommended buying 306,000 tonnes of wheat at $263 a tonne in its one million tonne import tender. The government had then decided against imports as global wheat rates were expected to ease after the Australian crop was harvested later in the year.

The FAO report estimates India's cereal production to increase by 3.12 per cent in 2007 at 245.9 million tonnes from 238 million tonnes last year and 239.7 million tonnes in 2005. Coarse grain production is expected to jump by 7 per cent at 34.4 million tonnes compared with 32.1 million tonnes in 2006 and 33.4 million tonnes in 2005.

Paddy production in India is likely to increase marginally to 138 million tonnes this year compared with 136.6 million tonnes last year and 137.7 million tonnes in 2005.

Wheat production in the Asian region is estimated to be satisfactory because of favourable monsoons in almost all countries and the increased use of fertilisers in Pakistan. Wheat farmers in Pakistan managed to get government subsidies for fertilisers last year, resulting in higher output.

China's aggregate wheat output, which includes 5.5 million tonnes of spring wheat, is tentatively estimated at a record 107 million tonnes, 2.5 million tonnes above the previous high set last year. Wheat output in Pakistan set a new record of 23 million tonnes last year, of which the country is likely to export about 1.5 million tonnes in 2007-08.