Good wheat crop poised to keep global prices stable

MUMBAI: India is unlikely to influence global wheat prices this year, thanks to estimates of a good local crop and lower import demand.

“On account of unanticipated demand coming from India last year the global wheat prices further improved. This year, the Indian production is good so it is expected that there will be less imports which has already been factored in by the market,” Canadian Wheat Board director Bruce Burnett told ET on the sidelines of a commodity seminar here recently.

Last year wheat prices at CBOT moved from 322 cents a bushel to over 550 cents. Though the major factor that had pushed up the price was Australian wheat crop failure, subsequent demand from India also contributed to the rise. The country had imported over 6 million tonnes (mt) of wheat in the previous year, as it had failed to meet its procurement target of 16.1 mt.

On possible imports from Canada Mr Burnett said: “Whatever wheat India imports from Canada would depend on the Canadian wheat quality,” he said.

The estimated wheat production of India in 2007 is 73.7 mt, which is 6.2% higher over last year’s final estimates of 69.35 mt. On global wheat prices Mr Burnett said current levels are expected to sustained unless there are some unanticipated changes.

Wheat May futures on Saturday were being traded at 479 cents per bushel at CBOT, while the March 2008 futures were around 520 cents. He, however, said that acreage under wheat for the next year is expected to show a decline with a shift to other crops like oilseeds and pulses.

“For the Canadian and Argentine wheat there is competition from oilseeds and pulses, and if wheat prices do not respond it will translate into a drop in wheat acreage,” he said. On possible impact of global warming on the crop, Mr Burnett said that it is a long-term phenomenon and a fluctuation during a year cannot be attributed to global warming.