India's wheat output is likely to fall by 5 per cent to 10 per cent from 2025 levels, trade officials said, missing government forecast of a rise after rain and hail spells just before harvest cut yields.

Although lower output could curb purchases by government agencies, which have missed wheat buying targets for the past four years, this is unlikely to cause shortages as New Delhi holds stocks at roughly three times the required level.

"The wheat crop was in good shape, but untimely rain just before harvest is likely to cut output from last year's level," Nitin Gupta, deputy country head at Olam Agri India, an agricultural commodity trader, told Reuters.

More than 80 per cent of India's wheat comes from Madhya Pradesh and the northern states of Uttar Pradesh, Punjab, Haryana and Rajasthan, all of which received above average rainfall during the March to mid-April harvest period.

The government has forecast a record wheat output of 120.21 million metric tons this year.

But Gupta and three other dealers expect 2026 output to fall about 5 per cent from last year's record 117.9 million tons, while some others see a drop of around 10 per cent, which could cut production to about 106.1 million tons - the lowest in seven years.

The dealers declined to be named in line with their companies' policies.

Supplies are still expected to meet local demand and keep a lid on prices after a robust 2025 harvest boosted inventories.

India's wheat stocks in government warehouses rose 85 per cent from a year earlier to 21.8 million tons at the start of April, the highest in five years and nearly three times its target.

The government is holding far more wheat than required, allowing it to increase export allocations, while traders remain concerned about production, said Sumit Gupta, CEO of Waseda Global, a commodities brokerage.

India earlier this week approved an additional 2.5 million tons of wheat exports, taking the total quota to 5 million tons.

Government agencies aim to buy 30.3 million tons of wheat this year, but early purchases were slower than expected, prompting New Delhi to relax quality specifications.

State agencies buy wheat from farmers to help the government run the world's largest food welfare programme.

The agencies may end up buying 26 million to 28 million tons, said a New Delhi-based dealer at a global trading house.