NEW DELHI (Bloomberg) -- India, the world’s biggest producer of wheat after China, may import the grain for a third year after dry weather cut output, supporting prices that are at a record.

Imports may total 2 million metric tons in the year starting July 1, the Foreign Agricultural Service at the U.S. embassy in New Delhi said in a report dated Feb. 20. The country bought 1.8 million tons a year earlier.
India’s production may drop 1.3 million tons to 74.5 million tons in the March-April harvest after farmers planted the crop on a smaller area compared with a year earlier, the report said. The forecast comes as wheat exceeded $12 a bushel for a first time on signs that global crop production isn’t keeping pace with demand.
“Winter rains in major non-irrigated wheat-growing states were lacking,” the report said.
Still, weather conditions that turned favorable last month may aid crop growth, partly offsetting production loss due to the decline in planting, the report said. The view echoes that of the nation’s Agricultural Secretary P.K. Mishra, who forecast output will touch a record this year, helped by cooler temperatures.
Farmers may gather 76 million tons, matching a record set in 2000, Mishra told reporters in New Delhi on Tuesday. He had estimated production to reach 74.81 million tons on Feb. 7.
Wheat for May delivery rose by the daily limit of 90 cents, or 8 percent, to $12.145 a bushel in after-hours trading on the Chicago Board of Trade, the biggest one-day gain since October 2002. The exchange expanded its daily limit after the contract surged by the previous 60-cent limit.
The government, which will start purchases of the grain from the new crop in April, had 8.5 million tons at its warehouses as of Feb. 8, according to Food Corp., the nation’s biggest buyer of food grains. It plans to buy 15 million tons from the farmers, up 35 percent from a year earlier.
----------------------------Mustard output
Separately, the nation’s output of mustard seeds may miss forecast by 5 percent after cold weather lowered yields, Mishra said. Production of the winter-sown was estimated to decline to 7.09 million tons from 6.73 million tons a year earlier, the farm minister said Feb. 7.
Mustard seed, similar to rapeseed or canola, is crushed for both cooking oil and animal feed. It accounts for more than 70 percent of the nation’s winter-sown oilseeds output. Its yellow- colored oil is the country’s third-most used cooking fat after palm and soybean oils.