India’s rice prices are unlikely to see a sharp increase even if the kharif crop is affected by a weak monsoon, thanks to comfortable buffer stocks, according to former NITI Aayog member Ramesh Chand and currently distinguished professor at ICRIER.”We have comfortable buffer stock, and even otherwise, we produce… more rice than what we require,” he said.
However, he warned that oilseeds, edible oils and millets remain vulnerable because they depend heavily on rainfall, and food inflation could cross 6% in some months if weather conditions worsen.
India also relies heavily on imports for edible oils and global weather disruptions, including heat in Europe and El Nino’s impact on major producing countries, could also push international prices higher. “There will be food inflation… there will be pressure,” he cautioned.Chand said the June rainfall deficit is a concern, but its impact should be viewed in context because the delayed arrival of the monsoon has exaggerated the deficiency.Even so, rain-fed crops are at risk, especially if El Nino strengthens during the rest of the season. “We should prepare ourselves to meet the contingency, to meet the eventuality,” he said, noting that irrigated areas are likely to fare much better than rain-fed regions.Among major crops, Chand said soybean is the biggest worry because more than 95% of its cultivation depends on rainfall. He also expects higher risks for groundnut, cotton, pulses and millets. Rice, however, is in a stronger position because nearly three-fourths of the crop is grown in irrigated areas. Based on his recent visit to Punjab and Haryana, he said rice transplantation appeared broadly in line with last year despite the delayed monsoon.Harish Damodaran, Rural Affairs and Agriculture Editor at The Indian Express, shared the concern over the weather outlook, saying the weak June monsoon arrived even before El Nino had fully strengthened. While he believes India has enough food stocks to manage the current kharif season, he is more worried about the rabi crop because El Nino could bring warmer and shorter winters, affecting wheat and other winter crops.Watch the full conversation hereDamodaran added that strong agricultural production over the past two years and high global food stocks have helped keep inflation under control. However, if poor weather persists both in India and overseas, those buffers could gradually erode. He also warned that weaker farm output could hurt rural incomes and consumption, which have been important drivers of the Indian economy in recent years.Catch all the latest updates from the stock market here
Source link
