Indian wheat stocks add to swelling global harvest

Enlarge Photo Farmers work in a wheat field on the outskirts of Jammu April 29, 2008. REUTERS/Amit... Slideshow: Day in pics: April 29 08

Fri, May 9 10:01 PM

NEW DELHI (Reuters) - India has bought 18 million tonnes of wheat from its farmers this year, 62 percent more than last year, the government said, confirming a bumper crop that would add to a record global harvest and ease fears of scarcity.

Prospects of bumper crops in India, Australia and the United States have helped world prices ease by 40 percent from record highs hit in February.

Buoyed by higher purchases by the Food Corp of India, the country's main grain procurement agency, the government has ruled out imports in 2008 after buying 7.3 million tonnes in the last two years.

Last month, India's agriculture ministry forecast a record 76.78 million tonnes output in 2008, surpassing the previous high of 76.37 million tonnes in 2000, while the U.S. wheat output is forecast to be the largest since 1998.

The government said in a statement on Friday farmers from the northern state of Punjab contributed the most by selling 9.39 million tonnes to the Food Corp, followed by neighbouring Haryana which sold 5.04 million tonnes.

Punjab and Haryana together produce around 40 percent of India's total wheat output.

The government keeps foodgrain stocks at state warehouses to help meet emergency needs and to run its various welfare programmes, including subsidised sales to the poor.

Alok Sinha, chairman and managing director of Food Corp, told Reuters this week his agency might buy up to 20 million tonnes this year.

The state-run agency, which could buy only 11.1 million tonnes of wheat last year, had bought a record 20.6 million tonnes in 2000.

The Food Corp is buying wheat at 1,000 rupees ($24) per 100 kg, up from 850 rupees last year. The higher price and a drop in world prices have encouraged farmers to sell more to the government, analysts said.

Private firms have refrained from offering farmers more than 1,000 rupees per 100 kg, they said.

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