India to face Wheat and Rice glut

India, which is currently at a comfortable position in cereals, may face a glut in rice and wheat two years from now, an expert said.

"The way prices have gone up in cereals like wheat andrice, there will be glut of these cereals in next two years,"India head of US-based International Food Policy ResearchInstitute Ashok Gulati said.

Speaking on sidelines of a function, he said the robust prices in cereals have attracted the sugarcane farmers, who were suffering from a glut in the sugar market, towards paddy cultivation.

During 2007-08, India has produced a record 76.78 million tons of wheat and 95.68 million tons of rice. The sugar output is estimated at about 27 million tons against the domestic consumption of 20 million tons.

Gulati noted that the wheat procurement of about 21 million tons in a little over one month signals that support price of Rs 1,000 a quintal was good for farmers. He also said, the shift towards cereals would affect other crops like oilseeds as total cultivable area remains the same. He said India can become self sufficient in edible oil if oilseeds production is increased by 40 per cent, but cautioned that in the process, other crops would be affected. There is need to tap potential in oil palm, which is the cheapest source of edible oil compared to oilseeds, he suggested. While palm oil is harvested through the plantation crop, other oils come from oilseeds grown in field.

"Oil palm in the country is being grown in 30,000-40,000 hectares while it has potential of 800,000 hectares," he said.

India imports 40 per cent of its domestic edible oil requirement, majority of which is palm oil from Indonesia and Malaysia. The edible oil import was about 47 lakh tons in 2006-07 season ending October last year.