New Delhi: India’s foodgrain production likely dipped marginally in the crop year that ended on 30 June because of scanty rainfall in some parts of the country, although the output of pulses is estimated to have hit a record high, the ministry of agriculture said in its fourth advance estimates for food production released on Monday.
Total foodgrain output is estimated at 255.36 million tonnes (mt) in the July 2012-June 2013 crop year, 1.5% less than the 259.29 mt produced in the previous year. Production of pulses is estimated at 18.45 mt, an 8% jump over the previous year’s 17.09 mt.
“Last year the monsoons were delayed. When that happens, the farmers switch to shorter-duration crops,” said Pronab Sen, chairperson of the National Statistical Commission, explaining the reason for the surge in pulse production. “Pulse is a shorter-duration crop and this expected increase in pulse production could be on account of farmers cultivating more pulses in place of cereals due to late rains. So while it is good that pulse production is expected to be higher, it may not be a sustainable pattern.”
Experts don’t see any impact on the prices of foodgrains as a result. Food price inflation inched up to 9.74% in June from 8.25% in May.
“There will not be a lot of impact on the prices of pulses despite this increase in production. Since India imports around 40% of its requirement for pulses, the prices of pulses are driven by global prices,” said Sen.
India’s inflation based on the Wholesale Price Index (WPI) accelerated to 4.86% in June from 4.7% in May, mainly because of a sharp increase in the price of protein-rich items and vegetables, with those of onions more than doubling in June from the year-ago period. Prices of rice and wheat increased 19.11% and 13.83%, respectively, in June.
“The major cause for increase in food prices is the increase in minimum support price (msp) that went up 10%-15% in 2012-13,” said Madan Sabnavis, chief economist at CARE Ratings. “The other factor is the higher hoarding by Food Corp. of India as it procures foodgrains. So, production figures will not change the prices of foodgrains.”
The year-on-year drop in overall foodgrain production is attributed to deficient monsoon rainfall during the kharif (summer) crop season. Good rainfall in the rabi (winter) season has spurred hopes of an improvement in the final production numbers and hence that of a revision in the growth rate for agriculture. The foodgrains output projected by the fourth set of estimates is the same as that projected by the third advance estimates.
The Central Statistics Office revised the provisional growth rate for agriculture, forestry and fishing sector in 2012-13 to 1.9% in May from 1.8% in February.
India’s gross domestic product grew 5% in the year ended 31 March, the slowest pace in a decade, from 6.7% in the previous year.
“The agriculture GDP will remain at the same level as around the month of May. This dismisses the hope for an improvement in the India GDP number on account of an improvement in agriculture growth at least,” said Sabnavis.
The production of wheat is expected to dip to 92.46 mt, revised downwards from the earlier estimate of 93.62 mt. This means a decline of 2.5% in wheat production in the crop year 2012-13. Rice production has been revised marginally upwards to 104.4 mt, still lower than 105.3 mt production in 2011-12.
The agriculture ministry also released data for commercial crops. Oilseed production is expected to increase 4% to 31 mt, while sugar cane production is seen declining by over 6% to 339 mt.
The cotton production estimate has been revised to 34 mt versus 35.2 mt.
India has received normal monsoon so far this year. National Collateral Management Services Ltd, a private warehousing and weather data analysis firm, in a press statement released in May estimated that the kharif crop may improve by 8.1% to 135 mt in the season starting in July.