India’s wheat planting remains steady despite record high prices

India’s wheat plantings remained steady despite a rally in price of the staple to a record as farmers in a key producing central state shifted to rapeseed to take advantage of even higher prices for the oilseed, farm ministry data showed on Monday.

A lower-than-expected planting area in the world’s second biggest wheat producer may cap an expected rise in production, after output fell last year because of a heatwave that forced New Delhi to ban exports amid limited supplies from Black Sea region because of Russia’s invasion of Ukraine.

A rise in rapeseed output could help the world’s biggest edible oil importer reduce overseas purchases of palm oil FCPOc3, soyoil BOc1 and sunflower oil.

The government and industry officials were expecting a substantial increase in wheat cultivation as the crop was offering better returns than competing crops.

Area under wheat rose to 34.32 million hectares (84.8 million acres) for the 2022/23 crop year, up 0.4% from last year’s 34.18 million hectares, data released by the Ministry of Agriculture & Farmers’ Welfare showed.

India grows only one wheat crop in a year, with planting in October and November, and harvests from March.

Domestic wheat prices WHE-ATDEL-NCX hit an all-time high of 32,500 rupees ($393.36) per tonne in January, far above the government-fixed buying price of 21,250 rupees.

Farmers in central state of Madhya Pradesh, a leading producer of wheat, surprised forecasts by switching to oilseeds from wheat, said a Mumbai-based dealer with a global trading house.

“Wheat gave farmers good returns, but rapeseed offered even better returns,” the dealer said.

Area under rapeseed, the main winter sown oilseed crop, jumped 7.4% from a year ago to a record 9.8 million hectares, the data showed.

The total area of winter-sown crops jumped to a record 72.07 million hectares, higher than last year’s 69.8 million hectares, as rice sowing jumped by 32% to 4.63 million hectares.

Late rains in October raised soil moisture levels and helped farmers to increase the area under wheat, rapeseed and other crops, dealers said.
Source: Reuters (Reporting by Rajendra Jadhav; Editing by Christian Schmollinger)