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Growing appetite for coarse cereals points to imports

Growing appetite for coarse cereals points to imports
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First Published: Tue, Mar 29 2011. 12 41 AM IST
Updated: Tue, Mar 29 2011. 12 41 AM IST
New Delhi: India may have to import some coarse grains, once considered the staple of the poor, as a surge in consumption by the health-conscious and stagnant production may lead to shortages and higher prices, putting at risk the nation’s food security.
Growing awareness of the nutritional value of coarse cereals such as maize, jowar, ragi (finger millet), bajra and barley has made these grains more popular among prosperous Indians, driving prices higher. Such grains in their natural form are a rich source of vitamins, proteins, oils and minerals, and are being used to boost the dietary value of food products ranging from biscuits to instant noodles.
“We have seen very positive consumer response to the use of coarse grains because of growing health awareness and consumer willingness to try new offerings,” Anuradha Narasimhan, category director (health and wellness) at Britannia Industries Ltd, told Mint in an emailed interview.
Britannia, which first tapped this market three years back with a biscuit made from five kinds of grain, now offers many multigrain products, and expects such items to gain wider acceptance, Narasimhan said.
Output of coarse cereals in the year ended 31 March 2010 was 33.8 million tonnes lower than the past 10-year average of 34.4 million tonnes, data from the agriculture ministry showed.
Over the past few years, output has remained stagnant and there is an urgent need to promote cultivation of these crops, the annual economic survey, prepared by the finance ministry, said on 25 February.
“Our government’s neglect of this sector may lead us to imports just like pulses and vegetable oils,” said P.C. Kesavan, distinguished fellow at the MS Swaminathan Research Foundation in Chennai.
India is more or less self-sufficient in its wheat and rice production, but two other essential commodities of daily use—pulses and edible oils—have to be imported in large quantities.
ITC Foods, which started selling multigrain flour last year, has seen around 5% of local consumers switching to the variety from wheat flour, divisional chief executive Chitranjan Dar said from Kolkata. “Coarse cereals are getting a franchise in India,” Dar said. “People realize that it has a lot more benefits in terms of extra fibre and nutrients.”
Other companies, too, have entered this segment, where the cereals—once looked down upon for their texture, taste and colour—are gaining in popularity for their micro-nutrients and fibre content. Shop shelves are crowded with multigrain products ranging from noodles to vodka.
This popularity threatens to stoke inflation further. The Wholesale Price Index has accelerated at more than 8% for the past 14 months, according to commerce ministry data.
Finance minister Pranab Mukherjee in his budget for the year starting 1 April allocated Rs 300 crore to boost production of coarse cereals.
But analysts said funding alone may not be enough to boost output. While the current demand matches supply, imports can’t be ruled out in the future.
“Output of coarse cereals may slowly increase, but what is required is a quantum jump that cannot happen without the kind of government support that was given to farmers at the time of the Green Revolution,” Kesavan said, recommending a strategy of government support, education of farmers and corporate involvement to reverse low productivity.
The Green Revolution in India refers to the adoption of high-yielding seed varieties and increased usage of irrigation and fertilizers after 1965 that led to a surge in agricultural productivity and self-sufficiency in foodgrain.
In recent years, agriculturists and policymakers have sought a second Green Revolution as the overall foodgrain output may fail to keep pace with demand from India’s growing population.
A scarcity will emerge after about five years if production is not substantially boosted, said T.K. Bhaumik, economist and adviser at JK Group.
“The food processing companies would import,” Bhaumik said. “But the volumes would be low. Perhaps 5% of the total consumption may be met via imports.”
Even though coarse grains account for just around 15% of the total foodgrain basket, demand for them has already boosted prices, in some cases even more than that of wheat.
On the National Commodity and Derivatives Exchange Ltd (NCDEX), wheat futures are at Rs 1,156 per 100kg, up 2% from a year earlier, while barley futures have risen 21% to Rs 1,122.
Maize, which has seen strong demand globally from the ethanol industry, has surged 35% from a year earlier to Rs 1,202 per 100kg. Prices may rise further in the next few months.
“In the next three months, we expect wheat prices to be stable. Barley has the potential to rise by 5-10%, while maize could rise by 10-15%,” said Kishore Narne, senior vice-president at Anand Rathi Commodities in Mumbai.
ruchira.s@livemint.com
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First Published: Tue, Mar 29 2011. 12 41 AM IST