India expects its wheat output to be the same as the previous year and oilseeds production to be higher because of good soil moisture, the farm ministry said on Friday. But traders said the government's projections were too optimistic and the wheat output would be much lower than estimated because of inclement weather during the flowering season while oilseeds production would be hit by poor rains last July.
The farm ministry estimated the grains output at 204.61 million tonnes in the year to June 2005 with wheat production at about 72 million tonnes, close to the output a year ago.
The ministry said the grain output was set to fall sharply from 213.46 million tonnes a year ago, mainly because of lower output of rice and coarse grains.
Rice production is likely to take a hit with output pegged at 85.31 million tonnes, down from 88.28 million tonnes a year ago.
In its latest estimates, the ministry said the country is expected to produce 26.1 million tonnes of oilseed during the year compared with 25.3 million tonnes a year ago.
Of this, the winter output is estimated at 14.94 million tonnes while summer production is forecast at 11.16 million.
"I think 70 million tonnes of wheat output will be more appropriate because there was damage to crop due to hailstorm and unseasonal rains before the harvest in February and March," said Atul Chaturvedi, president, Adani Exports Ltd.
Analysts said the earlier estimate of 74 million tonnes was not credible and the current estimates too were unrealistic.
"Prices of wheat are firm and the demand and supply situation is tightly balanced because of lower production," said one commodity analyst.
Traders said the government had overestimated the output of rapeseed and soybean.
The ministry said production of rapeseed, the summer season's main oilseed crop, is expected to rise to 8.35 million tonnes from 6.2 million tonnes a year ago.
It pegged soybean production at 7.5 million tonnes, compared with 7.8 million a year ago.
"We cannot digest these estimates. With such a big oilseeds crop, why have imports not come down?" said B.V. Mehta, executive director of the Solvent Extractor's Association of India.
He said India was expected to import close to 5.0 million tonnes of edible oil in the year to November, up from 4.4 million tonnes a year ago.
India, the world's largest vegetable oil buyer, imports nearly half its annual consumption of around 11 million tonnes. It buys palm oil mainly from Malaysia and Indonesia and soyoil from Brazil and Argentina.
"I will not buy the government's figure on oilseeds output," said Chaturvedi. "It will be at the same level as last year or maybe little lower."
He said rapeseed production was on the higher side by about a million tonnes and the soybean output estimates was also more than actual production.
The ministry said sugarcane output during the year is expected to fall to 232.3 million tonnes, sharply lower than 237.3 million tonnes a year ago.
India, the world's third largest cotton producer, is likely to have a record production of 17 million bales of 170 kg each, up from 13.87 million bales a year ago.