We also sow what we reap

Join the dots to find out how India has been really tackling a drought year on the food front. Dipankar Bhattacharyya elaborates.

India’s wide experience with monsoon failure yields a formulaic response: draw down grain stocks to feed the poor, sell some of it in the open market to keep a lid on food prices, lower taxes on food imports and stop exports. Looks good on paper. Here’s how it plays out on the ground.

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Wheat
* Mumbai, Dec 18 (Reuters): India’s wheat futures were higher on Friday afternoon tracking the government’s concern on rising food prices, analysts said.

The wheat January futures contract NWTF0 was up 0.97 per cent at Rs 1,356 per 100 kg. “Arrivals in the mandi are less than last year... prices are not coming down below the Rs 1,380 levels,” said a trader in Delhi’s Narela market.
The Food Corporation of India has earmarked 500,000 tonnes of wheat for sale to bulk consumers such as flour mills between October and December, but the mills have not been lifting stocks saying the Rs 1,400-1,450 per 100 kg price was too high.

Rice
* New Delhi, Dec 16 (Reuters): India has raised its summer-sown rice output estimates by 2.2 million tonnes, the government said, reducing prospects of imports after the worst monsoon in 37 years damaged paddy fields.

To shore up stocks at government warehouses, three state-run trading firms in October floated import tenders totalling 30,000 tonnes, but did not place an order due to high bids.

* Manila, Dec 1 (Reuters): The Philippines drew sharply higher bids at a tender for a record 600,000 tonnes of rice on Tuesday, suggesting the world's top rice buyer may pay a high price to secure supplies after storms ravaged crops. Bids for the tender — the first of three of the same volume this month — ranged from $598 to $697 a tonne cost and freight, above the budgeted cost and as much as a quarter up from offers at a November 4 tender.

Sugar
* Mumbai, Dec 18 (Reuters): The Indian spot sugar price climbed for a third consecutive day on Friday, bolstered by a drop in output, improvement in demand and as a shortage of rail wagons delayed arrivals of imported sugar in the market, dealers said.

In Kolhapur, a key market in top sugar producer Maharashtra, the price of the most traded S-variety sugar rose 2.12 per cent to Rs 3,300 rupees per 100 kg.

India’s sugar output fell 9.6 per cent to 1.70 million tonnes in the first two months of the season that began in October due to delayed cane crushing. Imported sugar has piled up at ports, particularly in Kandla in western India, because of a shortage of railway wagons and protests against raw sugar imports by farmers in the northern Uttar Pradesh state, government and industry officials say.

Vegetables
* Mumbai, Dec 18 (Reuters): India’s potato output is likely to rise by 5.1 per cent to a record 32.7 million tonnes in 2009-10 as higher prices prompted farmers to cultivate the tuber crop on more area, a senior official said on Friday.

“Because of scanty rains in some areas they [farmers] have not cultivated paddy. They covered this area with potato,” R.P. Gupta, director, National Horticultural Research and Development Foundation (NHRDF), told Reuters in an interview.

Average wholesale potato price in Agra, a major spot market in the northern state of Uttar Pradesh, was Rs 750 per 100 kg on Friday [December 18], after hitting a high of Rs 1,450 in late October. In December 2008 the price was hovering at around Rs 160.

India’s onion output is likely to remain almost steady in 2009-10 at 7.70 million tonnes, compared with 7.64 million tonnes a year ago, Gupta added.

Average wholesale price of onion in the country’s largest onion trading hub, Lasalgaon in Maharashtra, was Rs 1,400 per 100 kg on Friday, after hitting a year high of Rs 1,927 on November 17, NHRDF data showed.

India’s onion exports in first eight months stood at 1.328 million tonnes, up 17 per cent compared to 1.132 million tonnes during the same period a year ago. “In the last two months the government has raised the minimum export price. It will discourage exports and will help in augmenting domestic supply,” Gupta said.

Even garlic
* Mumbai, Dec 17 (Reuters): A good, garlicky wind is blowing across the Himalayas. A Chinese rally in garlic, which made it this year's best performing asset there, has quadrupled Indian prices and fueled an unprecedented eight-fold jump in exports.

At the Delhi spot market garlic price has surged 375 per cent to Rs 4,750 per 100 kg since March. The trigger for the bull run in China may have been the idea that the potent bulb can ward off H1N1 swine flu, Morgan Stanley economists said.

This is an account of our attempts to treat the symptoms of a drought. Our heroic efforts at treating the disease are the subject of another article.