heat traders and industry representatives in India expect the country to step up international purchases significantly over the coming months, providing a potential boost to global prices languishing near 10-year lows.
Production in the last two years has fallen well below the peak of 2014/15, reducing stocks to the lowest level in nearly a decade and pushing domestic prices close to record highs. Some traders expect them to climb still further this year.
India has already bought about 600,000 tonnes of wheat in 2016, the most in nine years, but traders expect the government to reduce or even abolish the 25 percent import tariff to make imports cheaper and ease a domestic supply squeeze.
"The supply situation is getting very serious," said Veena Sharma, secretary of the Roller Flour Millers Federation of India, the country's main wheat industry body.
"A review of the import policy may be a viable and rational option to bridge the gap between demand and supply in the domestic market. There is hardly any wheat available in the open market; production is much lower than the number the government is citing."
Ramped up imports by the world's second biggest wheat producing and consuming nation could help support global prices, which have fallen this week amid a projected rise in world stocks to a record 252.8 million tonnes.
- See more at: http://www.investmentguruindia.com/CommodityTopNews/Indian-wheat-supplies-tight-may-boost-low-global-prices#sthash.QKPupmvu.dpuf