While the monsoon has been normal in the past three months, the sowing of certain Kharif crops such as bajra, rice, maize and jowar has been low compared to last year.
While the monsoon has been normal in the past three months, the sowing of certain Kharif crops such as bajra, rice, maize and jowar has been low compared to last year. The situation is particularly bleak for rice as its sowing was 10.9% lower at 30.1 million hectares, according to a Kotak Institutional Equities report. Another report also highlighted the same and said that even though the overall sowing patterns across key crops as of 16 August 2019 has seen an improvement, “concern remains around the sowing of rice which has seen more than 30 lakh hectares contraction from normal and a year ago, a report from CARE Ratings said.
Further, acreage for Oilseed was 0.8% lower at 16.4 million hectares and sowing for pulses was down by 3.5% compared to last year. Even sugarcane acreage was down by 0.3 million hectares to 5.2 million hectares. However, the cotton acreage has surpassed last year’s record and 12.2 million hectares of land was sowed this year compared to 11.5 million hectares last year.
Inflation in food prices
While excess rainfall in some regions is likely to destroy the production of certain crops, a combination of excess rainfall and deficient rainfall in almost 45% of all the subdivisions could result in higher food inflation going ahead, CARE Ratings report said.
The wholesale inflation of products like jowar, bajra, maize and tur has been high in July. “Also, at an aggregate level, wholesale inflation of all food-grains stood at 10.4% in July 19,” CARE Ratings report said. Retail inflation of jowar, bajra and tur also remained high.
Further, cereal prices also hiked by 2.7% while the price of oils and fats also saw a marginal increase of 0.1% over last week in the week ending August 19, Kotak Institutional Equities report said.
The Wholesale prices in India (WPI) was 1.08 per cent higher on-year in July 2019, according to the data released by CSO last week. This is a 25-month low and the wholesale inflation has eased from 2.02 per cent growth rate in the previous month.