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With food inflation hovering around 18 percent (18.18 percent in August month), there are concerns among policy makers ahead of elections. Despite better monsoon and estimation of record production, food prices have been rising due to short supplies in this lean season especially commodities like onions and vegetables.

Commodity Markets | October 04Kharif crops – Production to touch record highs

With food inflation hovering around 18 percent (18.18 percent in August month), there are concerns among policy makers ahead of elections. Despite better monsoon and estimation of record production, food prices have been rising due to short supplies in this lean season especially commodities like onions and vegetables.

Rainfall during south-west monsoon (1 June – 25 September) is 5 percent above Long Period Average (LPA). About 39 percent area of the country has received excess and 47 percent area has received normal rainfall during monsoon season. The major food grain growing regions have received excess rains benefiting sowing and growth of the crops. The central parts of the country has received 21 percent above LPA leading to bumper crop estimations for edible oil seeds and pulses, major crops grown in this region.

Kharif 2013-14 – Acreage and Production estimates


Acreage under most of the kharif crops has increased in this season and the increase is seen more in pulses, cereals and oil seeds, which are mostly cultivated in central parts of the country. Better prices for crops like soy bean, tur and urad in last two years has motivated farmers to grow more of these crops. Farmers have reportedly shifted from crops like cotton and sugar cane to high priced commodities. The production of pulses and edible oil seeds is expected to touch record highs in this season due to higher acreage and better yields. Better rains in Madhya Pradesh, Maharashtra, parts of Andhra Pradesh and Karnataka may lead to bumper production in soy bean, tur, maize and urad.
However, despite higher acreage under rice, production may decline marginally. The production of jute and mesta, which are mostly cultivated in north-east parts of the country is expected to decline due to less rains.

In recent months, prices of most of the exchange traded commodities have seen down trend. The soy complex, chana, spices, guar complex, RM seed, sugar and maize prices have fallen in the range of 20-50 percent. Despite fall in exchange traded agri commodity prices, overall food inflation remains high due to rising prices of other commodities like vegetables. However, food inflation might ease in coming months due to harvesting of kharif crops and bumper crop production.

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