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India’s Wheat Crop Could Falter for 2024/25 as El Niño Strengthens

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India’s wheat production could decline in 2024/25, keeping domestic prices elevated and increasing pressure to extend the country’s current export ban. 

Low soil moisture levels, a consequence of below-normal monsoon rains triggered in part by El Niño, are forcing some farmers to switch to less water intensive crops such as chickpeas or sorghum. India, the No. 3 wheat producer worldwide, already is grappling with low supplies — the country’s wheat stocks are at their third-lowest level in 15 years as a result of a big jump in exports in the previous two years, as seen with Gro’s India Wheat Yield Model & Balance Sheet

In Uttar Pradesh, the largest wheat producing state, soil moisture is at one of the lowest levels since at least 2010, according to Gro’s Climate Risk Navigator for Agriculture, weighted for the state’s wheat growing areas. Other wheat producing states, including Madhya Pradesh and Rajasthan, also suffered from erratic rainfall during the June-September monsoon, as seen in this Gro display

The currently strengthening El Niño could bring additional unfavorable weather for India’s wheat crop, especially during the critical December-March growth phase. An earlier El Niño event fueled high temperatures in India, hurting wheat yields in the 2015/16 and 2016/17 crop years. India’s wheat crop is planted in October and November and harvested beginning in March.

Gro’s yield forecast model, part of our India Wheat Yield Model & Balance Sheet, will go live in mid-December when the crop gets established. 

A smaller wheat crop could exacerbate India’s domestic food price inflation, which has been rising since 2021. India last year restricted exports of wheat, wheat flour, and sugar in an effort to rein in prices. In July, it also banned exports of non-basmati white rice, as Gro wrote about here. But those efforts have done little to curb rising food prices, in part because of India’s tight domestic wheat supplies. 

The Indian government recently raised its minimum support prices for wheat and lentils by over 7% for the 2024/25 crop year in an effort to encourage farmers to plant the two crops.

India historically swings between being a net importer and a net exporter of wheat depending on the country’s harvest. A lower crop could force the country to be a net importer of wheat for the first time since 2017. 

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