Prices of cereals are unlikely to rise additional as witnessed within the latest previous however could stay elevated effectively into the subsequent fiscal as a result of vagaries of local weather change, sturdy world and home demand, ranking company Crisil stated.
Domestic manufacturing of cereals has grown persistently up to now 50 years. However, costs of cereals have risen sooner. The weighted common crop value index for cereal crops logged 3-4% CAGR (Compounded Annual Growth Rate) over fiscals 2017-2022, it stated in a report.
Even within the present fiscal, costs of cereals have risen considerably on-year within the first 9 months – of wheat and paddy by 8-11% and of maize, jowar and bajra by 27-31%, it added.
“The price sentiment for cereal crops is expected to be strong in absolute terms,” Crisil stated.
Anticipation of upper manufacturing of wheat in present rabi season is anticipated to enhance the inventory situation, which can put downward strain on costs, although heatwaves stay a key monitorable, it stated.
For kharif crops reminiscent of paddy, maize, and millets, the manufacturing expectations can be optimistic if regular, well-spread monsoon prevails.
“However, prediction of higher chances of El Nino impact on south-west monsoon by the National Oceanic and Atmospheric Administration would be a major monitorable as El Nino had resulted in 14% lower rainfall and a 2-3% lower kharif cereal production during 2015,” the report added.
Source: www.thehindu.com