Record 112m tonnes Indian wheat harvest not seen benefitting global supplies
India is heading for its highest wheat harvest on record of 112 million tonnes this spring. However, exports will likely be limited in the coming year as the country is still recovering from last year’s poor harvest and is expected to focus on rebuilding its own wheat inventories.
During the past year, the Indian government has struggled to combat high domestic wheat prices and secure local food availability. A wheat export ban has been in place since May 2022, and three million tonnes of wheat were released from government inventories in January 2023. The government has stated that the ban will not be re-evaluated until this year’s harvest is complete, and that securing domestic demand will be prioritised.
Indian wheat inventories at the start of this spring’s harvest are estimated to end at 12.6 million tonnes, down 35.3% y/y and at a six-year low. Given inflation concerns, most of this year’s excess production will likely be used to replenish inventories. Based on current estimates, we therefore do not expect wheat shipments from India to recover significantly during the coming marketing year.
India is the second largest producer of wheat worldwide, exporting over 10 million tonnes during the 2021/22 marketing year. The Indian government had hoped to export up to 15 million tonnes during 2022/23 before drought drastically reduced harvest estimates. In 2022/23, 103 million tonnes of wheat were harvested; 6.0% lower than the 2021/22 harvest.
Global wheat supplies have been strained since the start of the war in Ukraine. During the past year, wheat exporters have tapped into their inventories to meet global demand. It is estimated that inventories will be down 3.0% by the end of the 2022/23 marketing year. Market conditions will likely remain challenging, and the International Grains Council (IGC) estimates that global wheat production will fall by 1% to 788 million tonnes during 2023/24 and wheat inventories will deplete further.
In 2023, global wheat exports will likely stagnate amid strained supplies and low inventories. As such, there may not be a steady recovery from the 2% drop in grain shipments reported last year.
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Posted:
08 February 2023
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