* Good soil moisture, improved seeds to boost output
* Farm minister favours higher prices to farmers
* Bumper crop to help exports continue in 2013
By Mayank Bhardwaj and Deepak Sharma
NEW DELHI/MUMBAI, Nov 5 India looks likely to
harvest a bumper crop of wheat in 2013, its sixth in a row to
exceed demand, after late monsoon rains replenished soil
moisture, strengthening prospects for exports from the world's
second-biggest producer for a second year.
Annual monsoon rains picked up near the end of the
four-month after a slow start in June, prompting Farm Minister
Sharad Pawar to exhort farmers to plant winter-sown crops, such
as wheat, early to cash in on good soil texture.
Farmers took Pawar's advice and have planted wheat on 3
percent to 5 percent of the normal acreage, which should rise to
40 percent to 60 percent by Nov. 20, slightly ahead of the usual
pace, Indu Sharma, chief of the state-run Directorate of Wheat
Research, told Reuters.
"If temperatures do not rise abruptly in end-February and
early-March, we are heading for a harvest almost as big as last
year," she said.
India, also the world's biggest consumer of the grain after
China, produced a record 93.90 million tonnes in 2012 for an
annual increase of 8 percent. Demand amounts to about 76 million
tonnes a year.
Inventories have swelled after repeated bumper harvests,
largely because of higher prices the government assures to
farmers, driving the state-run Food Corp of India to store grain
in the open.
Stung by criticism over its inability to protect wheat
stockpiles from rot and decay, the government lifted a four-year
old ban on exports in September 2011 before allowing exports
from state-run warehouses as well.
If farmers produce yet another bumper crop, the government
will continue unrestricted wheat exports, said P K Joshi, a
director at the International Food Policy Research Institute.
Exports from India next year could make up for a global
shortfall after drought parched other key producing areas.
This year drought hit the Black Sea countries of Russia,
Ukraine and Kazakhstan, which normally produce about 10 percent
of the world's wheat, forcing them to slash their harvest by a
third. Russia's 2012 wheat crop will lag officials' estimates by
In the United States, the world's biggest wheat exporter, a
severe drought is shrinking but not fast enough. In Australia,
the biggest wheat exporter behind the United States, the early
harvest is showing poor yields.
At 0854 GMT, benchmark Chicago wheat was trading at
8.67-1/2 a bushel, up 0.35 percent.
Wheat has risen for three out of four sessions as dryness in
the U.S. plains and forecasts of rain at harvest time in
Australia threatened to tighten global supplies.
FLAT PRICE BUT BUMPER OUTPUT
Saddled with unmanageable stocks and a large food subsidy
bill, India's government last week agreed not to raise the price
it will pay to buy wheat in 2013 from local farmers for the
first time in decades.
The flat wheat price is unlikely to restrain output, trade,
industry and government officials believe.
Ample soil moisture, use of improved, high-yield seeds, and
early sowing are factors that boost productivity, Sharma said.
"The early onset of winter, a comfortable water level in
dams and high prices of wheat in the local market will lure
farmers to plant wheat," said a senior government official from
the biggest wheat producing state of Uttar Pradesh.
Pawar advocated higher wheat prices at last week's cabinet
meeting, government officials say. But Finance Minister P.
Chidambaram and Food Minister K. V. Thomas, concerned over a
mounting food subsidy and bulging stocks, did not want this.
Higher subsidies of fuel, food and fertilizer have prompted
many economists to forecast a fiscal deficit of 6 percent of
gross domestic product (GDP) this year, but Chidambaram
forecasts 5.3 percent, up from a target of 5.1 percent.
Farm ministry sources say the government could revise the
purchase price for wheat if producer states, such as
northwestern Punjab and Haryana and northern Uttar Pradesh,
press for an increase around March, just ahead of the harvest.
(Editing by Jo Winterbottom and Clarence Fernandez)