India's wheat crop, threatened by abnormally hot weather in December, has improved after widespread winter rains and a drop in temperatures across the key growing northern and central states, officials and traders said.

The country is now forecast to produce top quality wheat grains but total production would still be lower than last year, they said on Tuesday.

"Rains have reversed the situation and crop condition is excellent," said a leading wheat exporter based in the northern city of Chandigarh said.

Traders said the country is expected to produce 70 million tonnes of wheat compared with the output of 73.5 million tonnes last year. Wheat, a summer crop, accounts for more than half of the grains output during the season.

Last month traders had estimated wheat production to fall to around 66 million tonnes because of poor weather conditions.

"The area under cultivation is lower because many farmers have shifted to oilseeds and other crops, so there will be a drop in output despite good weather," Gagan Gulati, a leading Ahmedabad-based grains trader said.

A government statement said wheat sowing continues in India and the area covered so far was about 18.5 million hectares, about 2.3 million hectares lower than the same time last year.

A USDA report said last week a mild winter and lack of winter rains were likely to affect 2003 wheat production prospects.

Poor rainfall in 2002, which caused a drought across one-third of India, created moisture stress in many parts of the country at the time of sowing of summer crops in November and December.

India key exporter

Scanty rains during the main June to September monsoon season had already lowered grains output in the winter season by nearly one-fifth from a year earlier to 90.64 million tonnes, according to government estimates.

Most wheat growing regions experienced significantly above normal temperatures in December. But northern India has since had rains and is in the spell of bitterly cold weather in January, which traders said would help the wheat crop.

Officials said the current weather condition would enhance both the quality and quantity of output.

"The weather should remain as it is and there should not be a sudden increase in temperatures in March," said D S Chauhan, director of state-run Directorate of Wheat Research, based in the northern city of Karnal.

India, sitting on huge grains stocks, has emerged as a key exporter and the high quality of output last year has increased the acceptance of its grains in the global markets.

The country mainly sells to Africa, Southeast Asia and the Middle East.

"Good quality this year again means we will have stronger presence in the markets abroad," a Mumbai-based exporter said.