Lower output of rice, pulses to put pressure on foodgrain prices in India

• Overall kharif foodgrain output has been estimated at 149.9 million tonnes, 3.9% lower than 156.0 million tonnes last year, according to a report by ICICI Bank Global Markets.
• According to the Ministry of Agriculture estimates, rice output is pegged at 105 million tonnes, lower than 111.8 million tonnes last year.
• Low production may lead to higher fluctuations in prices of food grains.

Erratic and patchy rainfall across some parts of the country has disrupted the kharif sowing season, which could put pressure on the prices of food grains such as rice and pulses.

Overall kharif foodgrain output has been estimated at 149.9 million tonnes, 3.9% lower than 156.0 million tonnes last year, says a report by ICICI Bank Global Markets.

“Spatial distribution across the country has remained uneven. The output for paddy and pulses has been pegged lower on a YOY (year-on-year) basis on the back of lower acreage this year. Overall foodgrains production is also lower than last year at -3.9% YoY. This is likely to put upside pressure on prices. Perishables are also likely to see an uptick on the back of excess or deficient rainfall. However, higher reservoir levels should bode well for the upcoming rabi sowing,” said the report.

The Ministry of Agriculture has released the first advance estimates of kharif crop production for crop year 2022-23. According to the Ministry of Agriculture estimates, rice output is pegged at 105 million tonnes, which is lower than 111.8 million tonnes last year. Analysts say low production may lead to higher fluctuations in prices of food grains.
(Source: ICICI Bank Global Markets)

Monsoon impact
Monsoon directly impacts India’s growth and inflation outlook and the Southwest monsoon is crucial as the country receives about 75% of annual rainfall between June and September. A good monsoon soothes not only farmers but the economy and markets too.

Central and southern regions have received excess rainfall at above 20% and 26% above long-period average (LPA) respectively. However, east-northeast and northwest India are witnessing lower than normal rainfall at -17% and -3% of LPA respectively, the report said.

Rainfall up to September 22 has been significantly higher in Tamil Nadu, Telangana, Karnataka, Rajasthan and Gujarat. On the other hand, Uttar Pradesh, Bihar, Jharkhand, and West Bengal continue to witness lower precipitation, according to the ICICI report.
(Source: ICICI Bank Global Markets)


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