Rain gods may douse agflation fires by Sept
Come September and people could see inflationary pressures on commodities like rice, wheat and oilseeds easing.
By Nidhi Sharma & Pallavi Mulay, ET Bureau |
MUMBAI: Come September and people could see inflationary pressures on commodities like rice, wheat and oilseeds easing. Apart from just about sufficient buffer stocks, timely monsoon has improved the prospects of a good kharif production. However, international developments, especially in the case of rice, oilseed and cotton will set the tone for prices of these commodities in the near future.
The latest Crop Weather Watch Report, released by the agriculture ministry on June 27, says that sowing for most kharif crops like rice, oilseed, pulses, maize has shown an increase over the corresponding period last year.
For rice, which has the maximum weightage among foodgrains in the wholesale price index (WPI), the supply situation this year looks fine with over 126 lakh tonne (lt) of stocks as on May 1, 2008.
The estimated production for rice this year is over 980 lt against 950 lt last year. All India Rice Exporters Association president Vijay Sethia said that in Punjab, Haryana and Uttar Pradesh farmers have increased the area under hybrid varieties of rice. ���In certain areas they have shifted a part of area to rice from other crops like sugarcane,��� Mr Sethia said.
But since the US Department of Agriculture (USDA) has projected a marginal rise in global production and total supplies of rice, which despite better domestic supplies, can come under price pressure. For oilseeds, USDA���s Foreign Agricultural Service (FAS) has forecast a 6% rise in production at 36 million tonne over previous year. The increase is led by an anticipated good crop of soyabean and groundnut.
Globally too the price pressure may ease as oilseeds production is expected to be up by 8% this year. However, if crude rises continuously there can be some shift towards bio-fuels. But Govindlal G Patel who is a major oilseed trader from Gujarat feels that since major arrivals of oilseeds from various countries will begin from September-October, prices will not go up even if crude oil rises. In wheat, both the production and procurement this year has been good.
nidhi.sharma1@timesgroup.com
The latest Crop Weather Watch Report, released by the agriculture ministry on June 27, says that sowing for most kharif crops like rice, oilseed, pulses, maize has shown an increase over the corresponding period last year.
For rice, which has the maximum weightage among foodgrains in the wholesale price index (WPI), the supply situation this year looks fine with over 126 lakh tonne (lt) of stocks as on May 1, 2008.
The estimated production for rice this year is over 980 lt against 950 lt last year. All India Rice Exporters Association president Vijay Sethia said that in Punjab, Haryana and Uttar Pradesh farmers have increased the area under hybrid varieties of rice. ���In certain areas they have shifted a part of area to rice from other crops like sugarcane,��� Mr Sethia said.
But since the US Department of Agriculture (USDA) has projected a marginal rise in global production and total supplies of rice, which despite better domestic supplies, can come under price pressure. For oilseeds, USDA���s Foreign Agricultural Service (FAS) has forecast a 6% rise in production at 36 million tonne over previous year. The increase is led by an anticipated good crop of soyabean and groundnut.
Globally too the price pressure may ease as oilseeds production is expected to be up by 8% this year. However, if crude rises continuously there can be some shift towards bio-fuels. But Govindlal G Patel who is a major oilseed trader from Gujarat feels that since major arrivals of oilseeds from various countries will begin from September-October, prices will not go up even if crude oil rises. In wheat, both the production and procurement this year has been good.
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Though final estimates of the government are yet to be released, production is likely to top 780 lt as against 760 last year. The government was also able to procure a good quantity, 220 lt. Globally also, prices are expected to soften as both output and supply are projected to increase in 2008-09, according to USDA. nidhi.sharma1@timesgroup.com
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