India expected to remain net wheat importer in 2018/19: USDA

Indian wheat imports for the 2018/19 campaign are expected to be 1.5 million mt, as a reduced crop size, versus the Indian government's 'optimistic' forecast, outweighs high domestic stocks, the USDA said Thursday.

The Indian government’s earlier estimate, published February 28, pegged domestic wheat production “optimistically at a near-record 97 million mt,” the USDA said, with the estimate banking on improved yields.

“Most trade sources are currently estimating the crop in the range of 91 to 94 million mt,” the USDA said, taking into account adverse weather during planting.

However, on Wednesday the Indian government cancelled its plans to hike wheat import tariffs to 40% from the current 20%, indicating that it expects the crop to be lower than its earlier forecast. market sources said.  

India is set to harvest its fourth-biggest crop on record for a total of 94 million mt, USDA data showed, down from its biggest ever crop of 98.5 million mt last year due to a 3.5% fall in acreage to 29.7 million acres.

Alongside that, hot, dry weather at the start of the growing season has also eaten into yields, leaving them lower.

Even with high opening stocks and imports at 1.5 million mt, Indian closing stocks will fall to a three-year low of 9.6 million mt in the 2018/19 season which would indicate further wheat import requirements for 2019/20 if acreages don’t increase.

Corn

The country will harvest a record corn crop of 25.5 million mt but due to growing demand from the feed industry, India is set to become a net importer of corn during 2018/19, with imports forecast at half a million mt.

India currently allows corn imports under a tariff free quota (TRQ) of 500,000 mt, with the rate going up to 50% outside the TRQ.