India foodgrain output up 8.7% at a record 273.38 MT in 2016-17
Pulses output jumped 37% to 22.40 million tonne, which may reduce dependence on imports and cool food inflation.business Updated: Jul 19, 2017 15:42 IST
Robust output of wheat, rice and pulses pushed up India’s foodgrain production by 8.7% to a record high 273.38 million tonne during 2016-17, government data showed on Tuesday, increasing chances of lower food prices in the coming months.
After a heavy shower last year, rice output increased by 4.5% to a record 109.15 million tonne while wheat production was up 5.6% at all-time high of 97.44 million tonne. Coarse grains production rose 15.2% to highest ever 44.39 million tonne.
What’s important, output of all major pulses jumped 37% to 22.40 million tonne, which may reduce dependence on imports and cool food inflation.
A record high output of grains, which contribute about 12.4% to the consumer inflation (CPI) basket, will increase supplies and moderate prices.
A robust farm output will also help farmers tide over losses suffered during the demonetisation drive that crimped demand for food items and lowered their prices.
“There would be additional upside risk if the minimum support prices (MSP) for certain food articles are raised by the government,” said Madan Sabnavis, chief economist of Care Ratings. He forecast CPI inflation at 4.5-5% in 2017-18.
India’s CPI inflation fell to five-year low of 3.17% in January as cash ban dampened consumer demand. The inflation has firmed up to 3.8% in March.
India last recorded a record output of in food grains 265.04 million tonne during 2013-14.
“As a result of very good rainfall during monsoon 2016 and various policy initiatives taken by the government, the country has witnessed record foodgrain production in the current year,” the agriculture ministry said in a release.
Oil seeds output rose 28.8% to 32.52 million tonne, which is higher than the average production in the last five years.
Sugarcane production is estimated at 306.03 million tonne, which was 12.2% lower than last year.
Despite lower area coverage during 2016-17, cotton production was up 8.6% at 32.58 million bales.
Production of jute and mesta was marginally lower at 10.27 million bales.