Robust winter crops, prices won’t cool yet

India’s major winter crops are thriving, but the prices are unlikely to ease until the arrival of the harvest. Wheat is being grown on 13.7 million hectares, 7 million hectares more than last November, according to government data, reports Zia Haq.

India’s major winter crops are thriving, but the prices are unlikely to ease until the arrival of the harvest.

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Wheat is being grown on 13.7 million hectares, 7 million hectares more than last November, according to government data.

Experts said arrival of winter harvests, largely around April, alone could effectively cool prices that have escalated sharply following this year’s widespread drought, triggered by the driest June in 83 years.

India's year-on-year food price index was up 13.68% in the 12 months to October 31. Three commodities are in short supply: vegetables, pulses and sugar.

Rice stocks are adequate but prices have risen because the drought will trim summer rice output by 15 million tonnes.

The area under oilseeds stands close to last year’s levels as on November 26 at 7.5 million hectares. The acreage under pulses is at 94.17 million hectares, about 2.4 million hectares more than last November.

Economists said prices have surged because prices of farm commodities respond, as a rule, almost immediately to any demand-supply mismatch, unlike manufactured goods.

“Inflationary trends could persist for the next three months until supplies improve with rabi or winter-sown harvests,” Credit rating agency CRISIL’s principal economist DK Joshi told HT.

The government expects the wheat output to surpass last year’s 80.6 million tonnes. However, wheat is very sensitive to weather. Unseasonal rains, unusual fog or a higher temperature in mid-February could undo the progress, said scientist Ashok Khataria of Punjab Wheat Resource Centre.