Financial Daily from THE HINDU group of publications
Thursday, Mar 07, 2002
Agri-Biz & Commodities
Soft global wheat prices pressurise domestic exports
MUMBAI, March 6
WORLD wheat production in 2002-03 is expected to recover and forecast to reach 597 million tonnes, 18 mt up from current year. While the EC is likely to produce a record 105 mt, prospects in China are somewhat less bright. The combined stocks of major exporters are unlikely to change from the current year's level of 42 mt.
Meanwhile, world wheat trade in 2001-02 is forecast to expand by a healthy 6 per cent or 6 mt while consumption will rise by 4 mt, even as production is poised to decline by 3 mt to a recent low of 579 mt, according to the latest assessment made by the London-based International Grains Council.
The EC becomes the leading importer with expected purchases of 8 mt, much of it feed wheat from Ukraine and Russia. World consumption continues to run ahead of production with an estimate of 596 mt (up 4 mt). Global ending stocks for the current year are forecast at 132 mt, of which the five major exporters hold 42 mt, IGC pointed out.
On coarse grains, the IGC forecast production higher at 881 mt (865 mt) and consumption too higher at a record 901 mt (885 mt). World trade at 106 mt means a 3 mt decline from last year.
Demand for maize (corn) is strong from Asia and southern Africa, even if sales in some markets are affected by the availability of cheap feed wheat. Brazil continued to sell large amounts of maize, and China has stayed in the market, IGC pointed out.
In the face of moderate demand and continued ample availability in countries with unusually large supplies, international grain prices mostly edged lower in February. Milling wheat importers, especially those in price-sensitive markets and able to utilise lower quality specifications took advantage of sizeable and competitively-priced supplies from Black Sea ports.
While major exporter stocks were still expected to reach their lowest level in five years, traders also noted the generally favourable outlook for 2002 harvests, the report said.
Indian wheat export efforts will have to take cognisance of these conditions. The global market cannot ignore the large stocks of wheat in India. The Government recently removed quantitative restrictions on exports.
The Food Corporation of India has so far released for export some 5 mt, of which a little over 4 mt have been shipped out. There has been a slowdown in export marketing in recent weeks. Indian export efforts will have to double if the Government is serious about reducing the inventory level by encouraging exports out of the country.
Send this article to Friends by E-Mail
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line