Rice, wheat, onion prices to remain high till March: Report

A drop in India’s overall food production due to an uneven south-west monsoon could keep rice and wheat prices high till March. Onion prices, too, are expected to move upwards, around March-April. According to the Quarterly Agriculture Outlook Report prepared by the National Council of Applied Economic Research for the Department of Agriculture, rice prices would rise by less than 10 per cent in 2012-13 (July to June) as compared to last year, and wheat prices by about 20 per cent, compared to last year.

The report said the overall food sector wholesale price index comprising non-processed and processed food items will continue to show a year-on-year increase of 9.5 per cent till February 2013. The report, which is presented to the agriculture department every quarter, relates to October-December months.

India’s foodgrains production in 2012-13 is expected to be around 245.5 million tonnes, down from last year’s record output of 257.4 million tonnes, a fall of 4.6 per cent. “The production will fall as a result of decline in rice production from 104.3 million tonnes to 99 million tonnes, while coarse grains output is expected to fall from 42 million tonnes to 37 million tonnes,” the report said.

The government’s second advance estimate of foodgrain production, released earlier this month, had pegged foodgrains production in 2013-14 at 250.14 million tonnes, down from last year’s 259.32 million tonnes.

According to the NCAER report, the high rates seen in pulses and sugar would continue in the coming months as well, but there might be some decline in the short-term. Potato prices are expected to lower till April 2013, the report said.

“Production of selected vegetables and fruits crops, potato, onion and banana is expected to remain unchanged in 2012-13 crop year that started in July or increase marginally, while production of milk is expected to rise by 3.5 per cent to 131.18 million tonnes,” the report said.

The government’s ample grain stocks and strong rabi sowing this year provide a positive outlook for domestic supplies, the report noted. However, the price scenario remains an area of concern.