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Wheat Crop in India Seen Dropping Most Since 2003

Published on Apr 23 2015 5:16 AM in Supply Chain tagged: Trending Posts / Wheat / India

Wheat Crop in India Seen Dropping Most Since 2003

Wheat production in India, the world’s biggest grower after China, may tumble by the most in 12 years after heavy rains and hailstorms ravaged farms.

The harvest will probably drop 8.3 per cent to 87.9 million tons from a record 95.9 million tons a year earlier, said Rajnikant Rai, chief operating officer of the agriculture business at ITC Ltd., a cookie and flour maker and one of the biggest wheat buyers. That’d be the smallest crop since 2011 and the largest decline since 2002-2003, government data show.

Widespread rain and hail across most of the country since late February have ruined crops from wheat to rapeseed and vegetables, hurting farmers and threatening to fan food inflation in Asia’s third-largest economy. Lower supplies and poor quality may spur flour mills to increase wheat imports, according to Kotak Commodity Services Pvt.

“We never expected rains to wreak this kind of havoc,” Amit Kumar, a 26-year-old farmer, said while cutting the rain- flattened crop with his wife in Kurana village in Uttar Pradesh state. “If we employ labourers, we won’t be able to pay their wages. Even old people in our village are saying they’ve never had such an experience when entire crops have vanished.”

Crops on about 9.38 million hectares (23.2 million acres) were damaged after rainfall since 1 March was more than double the 50-year average, according to government data. The main wheat-producing regions had almost five times the average, they show. The government estimates the crop will be 5 per cent below its February forecast of 95.8 million tons.

Wheat crop damage in some regions was as high as 80 per cent, ITC’s Rai said. Yields in Punjab, Haryana and western parts of Uttar Pradesh, called the grain bowl of India, may drop as much as 20 per cent and the quality is poor, he said.

Prime Minister Narendra Modi has promised to ease rules to allow farmers to claim compensation for crop damage. Farmers will be paid 50 per cent more than usual and growers with 33 per cent damage can claim state aid compared with 50 per cent earlier, Modi said on 8 April. The government has also ordered banks to restructure farmer loans.

Bloomberg News, edited by ESM

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