India 2010-11 Government Wheat Buy May Rise; No Storage Problem

India will aim to buy a record 26.3 million metric tons of wheat for federal grain stocks in the current marketing year that started on April 1 as it is heading for a bumper harvest, a top official with the state-run Food Corporation of India said Wednesday.

Siraj Hussain, the company's newly appointed chairman, told a news conference that state-run agencies are expanding their storage capacity as well as renting space from private warehouses to prevent storage problems.

India had to store wheat in open fields last season due to a space crunch after a bumper harvest, and this year's wheat production is expected to exceed last year's production of 80.7 million tons by 2 million tons.

The federal farm minister has said the country will not lift a ban on wheat exports immediately and will review the situation only in June.

The federal government purchased 25.4 million tons in the previous marketing year. It has bought 996,000 tons of wheat since April 1. As of March 31, the Indian government had 42.83 million tons of wheat and rice stocks, according to Food Corp data.

Food Corp. aims to hire additional space to store more than 12.7 million tons of grains over the next one-and-a-half years to overcome storage problems, he said. Other state agencies are also planning expansion of storage space, he added.

The company also expects to purchase 4.5 million tons of rice between April and September-end when the marketing year for the grain ends, though much will still depend on the crop size and arrivals in the market, Hussain said.

Source: CME Group