New Delhi May 4 2022: India’s wheat output in 2022 is expected to decline sharply, after five straight years of record production, as severe heat waves since end-March are seen weighing on the yields of wheat in key producing states, sources said May 4.
The likely drop in the output may limit the export potential of India, the world’s second-largest wheat producer, for the marketing year 2022-23 (April-March).
While the government estimates India’s wheat output in 2022 at a record 111.32 million mt, up from 109.59 million mt in 2021, a spell of hot weather is seen weighing on wheat yields in states like Madhya Pradesh, Punjab, Haryana and Uttar Pradesh.
An official with the agriculture ministry told S&P Global Commodity Insights that the output may decline to 105-106 million mt due to the recent heat wave that led to shrinkage of pods and the absence of moisture in the crop at the time of harvest.
The government is likely to revise its estimates later this month owing to the current weather situation.
However, some in the trade circles are anticipating a further drop in the output in 2022, with crop size seen at 98-99 million mt.
“The output may decline sharply this year, as the recent heat waves have weighed on the yields,” a Delhi-based wheat trader Ashok Goyal said.
However, at this time, traders are waiting for a clearer image of the output, a Bangalore-based trader said.
India’s wheat export potential is expected to be affected in MY 2022-23 due to the likely reduction in output.
According to the government, India exported a record 7.9 million mt of wheat in MY 2021-22, up from 2.1 million mt in the previous year.
However, with the current output seen dwindling, India’s export potential may be dented in 2022-23, according to traders.
On the back of likely another bumper output, the Indian government and traders were hopeful of exporting around 11-12 million mt.
“Although there are some concerns over production, exports may remain around 9-10 million mt in MY 2022-23,” an official with a multi-national agriculture trading firm said.
There were some market talks in trade circles about India limiting wheat exports to maintain stable supplies.
Traders are also concerned about the logistical issues faced by the Indian railways, which is now preferring to transport coal, as most parts of the country are reeling under power cuts.
“Output issues and logistical constraints are likely to weigh on India’s wheat exports for the next few months,” the official with a multi-national agriculture trading firm added.
