Asia’s wheat stockpiles are set to grow this year as major exporter Australia, along with China and India, forecast larger crops, raising the prospect of lower prices for the golden grain, analysts say.

Official figures released last week indicate that Australia is likely to reclaim its rank as the world’s third largest wheat exporter after the US and Canada.

While China has predicted a 2.4 per cent increase in wheat yields, and India, the world’s second largest wheat producer, has forecast this year’s harvest will hit a record 78.4 million tonne (mt).

It is expected that the increased crops will help ease prices which have surged as a result of the global food crisis that hit developing nations, where wheat is often a staple food among millions of poor, particularly hard.

The Australian Bureau of Agricultural and Resource Economics (Abare) said wheat production was forecast to be 22.5 mt in 2008-2009, which is well above the 13 mt harvested last year.

Analysts said more farmers had planted wheat after shrinking stockpiles and increased demand pushed prices to historic highs earlier this year, with the price hitting a record $10.93 a bushel in Chicago in February.

Wheat crops have been particularly attractive to Australian farmers who have been seeking a quick income after years of devastating drought which has seen many move from sheep farming to the more lucrative grain.

John Hogan, who is acting branch manager in agriculture and trade at Abare, said this year’s northern hemisphere wheat harvests were also expected to be bigger. “So there is expected to be an increase in world grain stock,” he said.

“Prices generally have been drifting lower because of expectations of a higher world crop,” he added.

In Asia, the China National Grain and Oils Information Centre has forecast 2008 wheat yields will reach 112.5 mt. At the same time, China’s wheat consumption has dropped to below 100 mt a year, director of the centre, Shang Qiangmin had told the ‘Guangming Daily’ in April.

“Generally speaking the weather was good for growth later this year and we had plenty of rains,” Feng Lichen, a trader at the Commodity Exchange in the northeast Chinese port city of Dalian said.

India has forecast that its harvest for this year will rise 3.45 per cent to 78.4 mt, bettering a previous forecast of 76.78 mt. Agriculture minister Sharad Pawar said the harvest would be “the highest since independence,” thanks to plentiful monsoon rains.

On Wednesday, the government had announced it would release 909,000 tonne of wheat stocks for sale in the open market in September and October in a bid to ease prices and to meet demand during the upcoming religious festival season.

The government also recently slightly eased a ban on wheat exports, allowing sales of wheat seeds, but traders believe the government would rather maintain big buffer stocks of wheat with general elections looming.

After poor harvests, the Centre was forced in 2006 and 2007 to import more than 7 mt of wheat from costly world markets to boost its buffer stocks. That had raised alarm about food security in the country of 1.1 billion people.

In Pakistan, 21 mt of wheat were produced this year and the country is importing a further 2.5 million tonne to meet its requirements, senior agriculture ministry official Qadir Bux Baloch said.-Agencies