Bumper sowings and plentiful rains have put India is on course for a fourth successive record wheat harvest, US officials said, forecasting that the country may be "forced" to resume exporting the grain.
The wheat crop in India, the world's second-biggest harvest after China's, will hit 83.0m tonnes this year, beating by 2.2m tonnes the record set in 2010, US Department of Agriculture attaches in New Delhi said.
A "timely" raise to 11,200 rupees ($250) per tonne in the government's minimum buy-in price had encouraged farmers to sow a record area, well above 29m hectares.
And seedlings had "received above 20% higher than normal rains during October-December, providing optimal distributed rains", the attaches said in a report.
"There has been no report of any major damage due to pest and disease incidence, or weather aberrations."
'Pilferage costs'
However, the size of the harvest will worsen the government's headache over where to store grain, with the state stockpile set to swell to about 36.6m tonnes as of early June ?nearly twice target levels.
The government typically has, in recent seasons, typically bought about 30% of the harvest, to support programmes for feeding poorer families ?a scheme deemed particularly important given soaring food inflation, which reached 11% in January.
Indeed, Indian's spending on food subsidies will soar to 2.0 trillion rupees ($44bn) in 2011-12, the attaches estimate.
However, the state has space to store some 28m tonnes in covered silos, condemning "large quantities" to open stores, resulting in "significant indirect costs, including quality deterioration and pilferage".
Exports to resume?
Such losses could help persuade the government to relax a four-year ban on mainstream exports, a curb aimed at protecting domestic supplies.
"According to trade sources, Indian wheat can find buyers at current global wheat prices as the (ex-freight) price of Indian wheat would work out around $350 per tonne," the attaches said.
"Higher than anticipated government procurement and inadequate availability of storage space in the major surplus states of Punjab and Haryana could force the government to export wheat, if global wheat prices remain strong."
'Right time'
The comments come a week after India's farm minister, Sharad Pawar, said it was the "right time" to resume exports of both wheat and rice, given that the country "has ample stocks (and) world prices are very good".
Such a move, however, may be viewed as a depressant to prices, if shipments approached levels of 5.7m tonnes reached seven years ago, around the same levels as expected from Kazakhstan and Ukraine this season.
India's finance minister, Pranab Mukherjee, on Monday unveiled a budget deemed friendly to agriculture, targeting a credit flow of 4.75 trillion rupees ($105bn) to the sector and offering a 3% interest
