Wheat Scenario: Global & India Khalid Husain Khan ITC Limited – Agri Business

Wheat 2017 World wheat production has increased by ~ 25% while utilization has increased by 18% over the past 10 years Ending stocks as on 2016-17 are expected at 244 million MT 54% up from 2006-07 Highest increase in demand has been seen in Asia; increase is majorly due to increase in population with the per capita demand stable at ~ 66 kg Source: FAO

Global Wheat Scenario 2016/17 Global wheat production likely to be up by 2.5% to 752 MMT Global supplies estimate to reach new record of 993 MMT; on the back of a high opening stock and production Consumption forecast at 740 MMT, up 4% from last year World wheat trade projected at 173 MMT, 3% higher than last year

Global Wheat Scenario Australia and Black Sea have been the major gainer in wheat production over the last year; India has utilised the same in a year with a low crop and imported 19% increase Imports expected to continue in the coming season from the same origins due to aggressive Govt. buying (~ 32 MMT) in season 35% increase

Uttar Pradesh Punjab Haryana TOP 5 STATE PRODUCERS INDIA : WHEAT 2017 Govt purchase price would be 1,625 rupees ($23.98) per 100 kg compared with 1,525 rupees a year ago State-set prices to build stocks to run a mammoth food welfare programme which covers about 75 percent of its 1.3 billion people. Favorably cool condition during yield formation could raise production to 90+ million tonnes Haryana Madhya Pradesh Rajasthan

India : Wheat SOWING AND PRODUCTION ESTIMATES Area Covered (Lakh Hec) Last Year Production State State wise Target Area Covered (Lakh Hec) % Inc / (Dec) vs. LY Expected Yield Production (MMT) 2016 2015 3.50 Bihar 23.25 22.92 22.70 1% 1.85 4.24 2.00 Gujarat 11.82 9.96 9.01 11% 2.74 2.73 10.90 Haryana 25.11 25.38 4.44 11.27 13.90 Madhya Pradesh 64.21 62.23 51.84 20% 2.69 16.74 1.10 Maharashtra 10.13 10.34 6.19 67% 1.44 1.49 14.60 Punjab 34.80 35.00 34.97 0% 4.34 15.19 7.80 Rajasthan 31.70 30.68 29.66 3% 2.94 9.02 23.80 Uttar Pradesh 99.00 100.52 94.99 6% 2.64 26.54 0.65 West Bengal 3.45 3.34 -3% 0.67 4.20 Others 15.77 15.18 14.64 31% 1.75 2.66 82.45 Total 319.24 315.55 292.56 8% 2.87 90.54 Sowing has been good for the current season – high monsoon rains, increased MSP and favourable weather Wheat production expected to touch 90 Million MT High Govt. buying (~ 32 Million MT) – low closing stocks (~ 6 Million MT)

Marketable surplus (70%) India Wheat Scenario Remaining 25 MMT retained by farmers for self-consumption and seed sowing Production 83 MMT PDS 14.5 MMT Marketable surplus (70%) 58 MMT Govt. 23 MMT Bulk processors 13 MMT (Maida) PDS 27 MMT Unorganized 20 MMT (unbranded bulk atta) Organized 15 MMT OMSS 4.4 MMT Brand owners 2 MMT (Atta) Carry forward 6.1 MMT

ROLE OF GOVERNMENT Particulars Million MT Govt. Stock as on 1st January’17 13.74 PDS Requirement till 31st March’17 7.14 Remaining stocks 6.60 OMSS allocations after 1st January'17 0.50 Stocks Remaining with Govt. as on 1st April’17 6.10 Buffer Norm 6.46 6.1 MMT being the lowest stock ever. Last year the figure was 14.5 MMT but due to low Govt. procurement and high off-take the stocks have plunged below the buffer norm Import duty reduced to from 25% to nil by the Govt. - control on inflation – two reductions OMSS tender prices MP – July ~ Rs. 18,500 / MT; Nov – Rs. 23,000 / MT and Dec ~ Rs. 19,500 / MT Delhi – July ~ Rs. 16500 / MT; Nov ~ Rs. 23,000 / MT and Dec ~ Rs. 18,800 / MT

WHEAT IMPORTS To be reviewed 25% to 10% 10% to Nil Import duty SEPTEMBER ’16 DECEMBER ’16 MARCH ’17 Tariff barriers in order to fend off domestic farmers from global prices FCI stocks for PDS programmes depleting day by day To boost domestic supplies as stocks were depleting and prices skyrocketed First time ever domestic prices touched 23,000 PMT in Delhi market 3.6 MMT wheat imports till date Major import grades Australian Premium & Standard Wheat Red Wheat (Ukraine, Russia, France & Bulgaria)

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Government – RICE StockS Particulars - Rice Million MT Govt. Stock as on 1st Jan’17 13.48 Buffer Norm* (1st Jan’17) 7.61 Excess stock - 1st Oct’16 5.87 Actual Buy till 17th Jan’16 18.58 Balance buy plan for 2016-17 KMS 12.42 Consumption requirement (Jan - March) 8.06 Estimated Stock as on 1st April’17 36.42 Commodity Stocks (Million MT) Buffer Norm 1st April’16 1st April’17 Rice 22.16 36.42 14.58 Wheat 14.54 6.0 6.46 Total 36.70 42.42 20.06