India wheat falls on government-aided supply fears

Aug 17 2009 3:15PM

MUMBAI, Aug 17 (Reuters) - Indian wheat futures fell on Monday on prospects of the government selling grains in domestic market to rein in prices, analysts said.

The Indian government may take a decision shortly on the open market sale of rice and wheat to rein in any price rise, the farm minister said on Thursday.

Prices of grain were moving up in the last few days on hopes of higher demand driven by a drop in rice sowing due to deficient monsoon rains, analysts said.

"The undertone for the commodity is positive as drought looms large over the country," said Kotak Commodity Services in a broker note.

India's monsoon rains have been 29 percent below average in the June 1-Aug. 11 period, government sources told Reuters, while the weather office chief, Ajit Tyagi, told a television channel that the situation was "grim".

As per latest data, paddy sowing area fell to 24.74 million hectares from 30.45 million hectares because of weak monsoon rains. See

lakh* hectare Crop This year’s area [as on 12th August, 2009] Last year’s area [as on 12 th August 2008} Paddy 247.39 304.49 Jowar 27.42 26.39 Bajra 67.30 67.37 Maize 67.55 65.87 Total of coarse cereals 174.19 175.36 Arhar 31.65 28.37 Urd 19.54 18.40 Moong 22.31 20.76 Total Pulses 88.24 82.25 Groundnut 36.91 48.19 Soybean 93.77 92.78 Total Oilseeds 152.47 164.15 Cotton 93.69 82.88 Sugarcane 42.50 43.79 Jute 6.89 7.06

MP: MR:CP:weatherwatch(13.8.2009)

Lower rice acreage will slash output, which may increase the focus on wheat as an alternative grain resource for India, analysts said.

September futures contract on National Commodity and Derivatives Exchange was at 1,175.4 rupees per 100 kg, down 1.03 percent at 3:09 p.m.