1380628877agiculture Report Apr - June - 2013 - August 14mail

About the Project
The need for monitoring and analysis of emerging food scenarios is important for India both because of
significant dependence of output on the monsoon rains and the fact that globally India is one of the major
consumers of food crops influencing markets. Management of agriculture from a public policy perspective
requires organisation of this information and analysis as inputs to policy making.
Against this backdrop the National Food Security Mission (NFSM), Ministry of Agriculture, commissioned a
3Year study to National Council of Applied Economic Research (NCAER) in 201112 to bridge this
important gap in analytical inputs for understanding the emerging agricultural scenarios both in the short-term
of one or two quarters and also in the medium to longer term.
Accordingly, the agricultural outlook and scenario analysis undertaken in this study refers to the main crop
based food items: cereals (specifically rice, wheat, jowar, bajra, maize and overall coarse grains), pulses (gram,
tur), selected fruits and vegetables (banana, potato, onion), sugarcane and edible oils (groundnut, rapeseed/
mustard, soybean). In addition the analysis also covers milk, one livestock product.
The three main outputs of the proposed work will be:
(1) A Quarterly Agricultural Outlook Report that integrates the assessment of key indicators relating to
agriculture with a focus on food sectors. The reports will include assessment of the current situation on
inputs, output and market conditions and also forecasts of key indicators for the full year based on models
developed for the purpose.
(2) A Semi-annual Agricultural Outlook and Scenario Analysis Report which provides a longer term
perspective for the food sector. These reports will present an analysis of alternative scenarios of output and
consumption for the food crops taking into account the available information and based on the suitable
economic models that permit longer term projections.
(3) Monthly briefings on the prevailing agricultural conditions.
Implementation
NCAER has set up a study team to carry out the study
An advisory committee has been formed to provide broad guidance to the implementation of the study. The
Committee comprises of Dr Shekhar Shah, DG, NCAER as Chair, Dr Ashok Gulati, Chairman, Commission
on Agricultural Costs and Prices, Prof. Ramesh Chand, Director, National Centre for Agricultural Policy
(NCAP), New Delhi, Prof. Mahendra Dev, Director, Indira Gandhi Institute for Development Research
(IGIDR), Mumbai, Mr Mukesh Khullar, Joint Secretary (Crops), Ministry of Agriculture and Mrs. S. Bhavani,
Principal Adviser, Ministry of Agriculture. Representative from FAO and DFID are Special Invitees to the
Committee meetings.
A Technical Support Group comprising of key officers from different departments of the government and
experts has also been formed to interact with the study team to improve the work under the study.
Agricultural Outlook and

Situation Analysis Reports
AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS
ii
Agricultural Outlook and

Situation Analysis Reports
Quarterly Agricultural Outlook Report

AprilJune 2013
Under the Project Sponsored by
The National Food Security Mission
Ministry of Agriculture
June, 2013
Prepared by
National Council of Applied Economic Research

11, I.P. Estate, New Delhi 110 002
iv
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Highlights
Growth of GDP from agriculture and allied sectors in constant prices in 201213 has been
estimated at 1.9 per cent over the previous year, lower than 3.6 per cent in the previous
year.
The third advance estimates place foodgrain production in 201213 at 255.4 million
tonnes, about four million tonnes lower than the final estimates for 201112. The rabi
harvest benefitted from the pickup in rainfall in the later months of the monsoon period
in 2012.
The outlook for 201314 is positive with a number of indicators being favourable for a
good harvest. Forecast of a near normal monsoon rainfall this year is a critical leading
indicator of a positive outlook for agriculture this year.
The output price environment has been positive for the outlook. Prices of major food
commodities in the international markets have shown moderating trend following high
levels seen in the second half of 2012. Improved global production in the case of major
grains and vegetable oils has meant higher year end stocks and stability in prices. Only in
the case of dairy products, prices are expected to remain at a higher level.
The minimum support prices (MSP) for kharif crops have been set to maintain incentives
for food production and address the need to raise production of pulses and oilseeds: in the
case of rice, the MSP has been raised by 4.8 per cent and in tur (arhar) by 11 per cent and
soybean even greater by 13-14 per cent.
Among the concerns input prices are important ones, particularly energy and labour.
While consumer level subsidies make the price rise seen in the case of diesel and electricity
at the wholesale level less sharp, continued rise in Consumer Price Index (CPI) may raise
labour costs. Depreciation of the rupee and rising energy prices will also have implications
to fertiliser subsidies.
Based on the expected normal monsoon rainfall in the current year, the present outlook
report estimates kharif foodgrain production of 130.6-135.2 million tonnes as compared
to 128.3 million tonnes in 201213. Soybean production is estimated at 14.1-14.9 million
tonnes, nearly the same level as in 201213.
Sugarcane production is projected to increase to 339.8-347 million tonnes up from 336.1
million tonnes in the previous year. Potato, onion and banana production is projected to
increase from the last years levels. Milk production is projected to increase from 132.1
million tonnes in 201213 to 137.7-138 million tonnes in 201314.
The food price index comprising of WPI of food articles and food products, is projected
to continue to reflect an increase of 8-9 per cent, year on year basis, in the next three
months. Although price rise is seen to be moderating across a number of commodities, the
price level remains high as compared to the prices prevailing a year back.
Although stocks of rice and wheat with the government on June 1 2013 at 77.7 million
tonnes are lower than its level on June 1 last year, it is still well above the needs of PDS
ix
and buffer requirements. The overall supply-demand balances point to adequate supplies
to meet normal domestic and export demand. The overall output price conditions in the
market continue to signal the need for improving market infrastructure and productivity
to achieve stable price conditions.
Acknowledgements
The study team wishes to place on record the guidance, support and assistance received
from a number of organisations and individuals. Mr. Ashsih Bahuguna, Secretary,
Department of Agriculture and Cooperation has been very supportive of the work and has
encouraged us in the conduct of the study. He presides over the monthly briefings which
provide new insights to our work on outlook assessment. Mr. Mukesh Khullar, Joint
Secretary (Crops) and Mission Director, NFSM is a source of constant encouragement in
all stages of the study. A number of officials from the Ministry and DES have provided
data, opportunities for interaction and guidance in the course of the study. Dr. B.
Gangaiah, Economics and Statistics Adviser, Directorate of Economics and Statistics,
Nodal Officer for the study, has encouraged us in our work providing feedback and data
whenever requested.
Mrs. S. Bhavani (Ministry of Agriculture), Prof. Ramesh Chand (NCAP), Prof. Mahendra
Dev (IGIDR), Dr. Ashok Gulati (CACP), Mr. Mukesh Khullar and Dr. Shekhar Shah
(NCAER) have provided guidance as members of the Advisory Committee and Dr. Peter
Kenmore (FAO) as Special Invitee to the Advisory Committee meetings. The Technical
Support Group (TSG) set up for the study has included a number of officials and also
other experts.
Reports of USDA, FAO and Department of Agriculture and Cooperation have been
major sources of data and information for the report. We have used information and data
from a number of other sources also. We have noted the specific references used for our
assessment of outlook in the report.
A number of experts made presentations in the monthly briefings. We acknowledge their
support as they shared their experience and knowledge on different aspects of assessment
of agricultural outlook.
Study Team
Shashanka Bhide (Project Leader), A. Govindan, Saurabh Bandyopadhyay, Laxmi
Joshi, S.K. Mondal, V.P. Ahuja, Mondira Bhattacharya, Charu Jain, Amar Singh,
Palash Barua, Sujoy Kumar Mojumdar, Aditi Jha, Praveen Sachdeva, Prem Mohan
Srivastava, Himani Gupta, Rahul Thakur and D.V. Sethi.
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Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .v
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii
Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ix
Acknowledgements and Study Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xi
List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xv
List of Boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xvi
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xvii
I.
Overview of Agricultural Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
II.
Global Economic Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
III.
Overview of the Domestic Food Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
IV.
Commodity Outlook Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

IV.1
Rice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
IV.2
Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
IV.3
Coarse Grains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
IV.4
Pulses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
IV.5
Edible Oilseeds and Oils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
IV.6
Sugarcane and Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
IV.7
Potato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
IV.8
Onion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
IV.9
Banana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
IV.10 Milk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87

V.
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93
xiii
xiv
List of Tables
I.1
Monsoon scenario for 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
I.2
Kharif 201314 Crop Forecast (million tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
I.3
Production of potato, onion, banana and milk in 201213 and 201314 . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
I.4
Trends in the prices of food commodities, food products and farm inputs WPI, % YOY . . . . . . . . . . . . . . .6
I.5
Trends in the prices of inputs % YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
I.6
MSPs for kharif crops % change, YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
I.7
Projections of WPI Based on ARIMA models % Change Year on Year . . . . . . . . . . . . . . . . . . . . . . . . . . .10
I.8
Projections of Wholesale Prices in Delhi Based on Harmonic Analysis % Change Year on Year . . . . . . . .10
I.9
Food Balances 201314 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
II.1
Global Production Forecasts for Major Food Commodities (Million Tonnes) . . . . . . . . . . . . . . . . . . . . . .16
II.2
CBOT Futures Price Quotes US$/MT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
III.1
Agricultural Outlook Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
III.2
Kharif 201314 Crop Forecasts (million tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
III.3
Year-on-Year Inflation Trend in Major Food Commodities WPI % change . . . . . . . . . . . . . . . . . . . . . . . .34
III.4
Agri- Policy Developments During April June, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
IV.1.1
Government operations in Rice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
IV.1.2
Supply and Demand Balance for Rice (1000 Tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
IV.2.1
Supply and Demand Balance for Wheat (1000metric tonnes) marketing year . . . . . . . . . . . . . . . . . . . . . . .48
IV.3.1
Demand Supply Balance Sheet for Maize (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
IV.4.1
Imports of Pulses by Type and Major Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
IV.4.2
Demand and Supply Balance Sheet for Pulses (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
IV.6.1
State wise Area, Production and Yields of Sugarcane (201112 and 201213) . . . . . . . . . . . . . . . . . . . . . .66
IV.6.2
Sugar Supply and Demand (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
IV.7.1
Area, Production and Yield of Potato in Major Producing States 201213 . . . . . . . . . . . . . . . . . . . . . . . . .69
IV.7.2
Potato Supply and Demand (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
IV.7.3
Futures Prices of Potato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
IV.8.1
Area, Production and Yields of Onion for Major Producing States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
xv
List of Tables
IV.8.2
Onion Supply and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
IV.9.1
Area, Production and Yield of Banana in the major producing states and all-India Level . . . . . . . . . . . . . .83
IV.9.2
Banana Supply and Demand (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
IV.10.1
Production of milk by States (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
List of Boxes
II.1
International Ag Policy Developments Likely to Impact India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
III.1
Assessing Agricultural Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
xvi
List of Figures
I.1
GDP Growth - Agriculture vs. Overall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
I.2
Share of Agriculture & Allied Sectors in Overall GDP in Constant (200405) Prices . . . . . . . . . . . . . . . . .2
I.3
Agricultural Production Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
I.4
Rainfall in Monsoon 2013 to be better than Monsoon 2012 (% of LPA) . . . . . . . . . . . . . . . . . . . . . . . . . . .4
I.5
Trends in International Prices FAO Food Prices Indices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
I.6
Comparison of domestic (WPI) and international (US$) commodity price trends % YOY . . . . . . . . . . . . .9
II.1
Global Price Trends of Major Food Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
II.2
Stocks-to-Use Ratio of Major Ag Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
III.1
Food Inflation Exceeds Overall Inflation Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
IV.1.1
Year on Year Increase in Rice Wholesale Price Index % YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
IV.1.2
Basmati Rice Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
IV.1.3
Parboiled Rice Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
IV.1.4
Other Rice Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
IV.1.5
Broken Rice Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
IV.1.6
Rice Export Price India vis-a-vis International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
IV.1.7
Government rice stocks actual vis buffer Norm (million tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
IV.2.1
Trend in Wheat Procurement by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
IV.2.2
Wheat Price Inflation WPI (% YOY ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
IV.2.3
Wheat Exports by Major Destination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
IV.2.4
Indian Wholesale Wheat Price vis--vis US SRW Wheat Price FOB . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
IV.2.5
Government Wheat StocksActual Vs Buffer Norms (million tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
IV.3.1
Coarse Grain Production Trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
IV.3.2
Maize price comparison US vs. India (US$/tonne) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
IV.3.3
India Maize Exports by Destination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
IV 4.1
Production Trend of Pulses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
IV.4.2
Kharif, Rabi and Total pulses production trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
IV.4.3
Per capita net availability of pulses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
IV.4.4
Price Trends in Total Pulses, Gram and Arhar WPI % Change YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
IV.4.5
Price Trends in Moong, Lentil and Urd WPI % Change YOY, 2013 over 2012 . . . . . . . . . . . . . . . . . . . . .54
IV.4.6
Gram Prices in Different Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
IV 5.1
All India Season-wise Area, Production and Yield of Nine Oilseeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
IV.5.2
Area, production and Yield growth rates of Nine oilseeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59

xvii
List of Figures
IV.5.3
Edible oil Production and Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
IV.5.4
Oilseed and Vegetable Oil Price Inflation (YoY % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
IV.5.5
Whole price index of Rapeseed and Mustard, Palm oil and International Price of
Palm Oil (YOY % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
IV.5.6
Total Imports of Edible Oils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
IV.5.7
Share of different oils in Total Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
IV.5.8
Export of Oil meals and Castor oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
IV.6.1
Area, Production and Yield of Sugarcane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
IV.6.2
Sugarcane and Sugar Production in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
IV.6.3
Percentage change in sugarcane production in 201213 over 201112 . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
IV.6.4
Per Capita Consumption of Sugar across Countries (TE2011) (Kg) . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
IV.6.5
WPI Sugarcane and Sugar % change month over previous month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
IV.7.1
Area, Production and Yield of Potato in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
IV.7.2
Price trends in potato over a longer time horizon Annual average WPI . . . . . . . . . . . . . . . . . . . . . . . . . . .71
IV.7.3
Recent Price trends in Potato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
IV.7.4
Wholesale Prices of Potato in Metro Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
IV.7.5
Retail Prices of Potato in Metro Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
IV.7.6
Per Day Average Arrivals of Potatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
IV.8.1
Area Production and Yields of Onion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
IV.8.2
Wholesale Prices of Onion in Metro Cities (Rs/Quintal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
IV.8.3
Retail Prices of Onion in Metro Cities (Rs/Quintal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
IV.8.4
Wholesale Price Index of Onion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
IV.8.5
Per Day Average Arrivals of Onions (Tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
IV.9.1
Area, Production and Yields of Banana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
IV.9.2
WPI of banana % change YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
IV.9.3
WPI of banana % change month over month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
IV.9.4
Wholesale and Retail Prices of Banana in Delhi (Rs/Dozen) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
IV.9.5
Per Day Average Arrivals of Bananas (Tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
IV.10.1
Annual growth rate of milk production and monsoon rainfall relative to long period
average or normal rainfall during JuneSeptember . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
IV.10.2
Procurement and marketing of milk by the cooperative sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
IV.10.3
WPI for milk and Eggs, fish and meat % change over the previous year . . . . . . . . . . . . . . . . . . . . . . . . . . .90
xviii
PART I
Overview of Agricultural Outlook

I.1 Backdrop
The quarterly reports on Agricultural Outlook and Situation Analysis are prepared by the
National Council of Applied Economic Research under a project commissioned by the
National Food Security Mission, Ministry of Agriculture. The first report in the series was
released in June 2012 and the present report is the fifth quarterly report. The reports cover
selected commodities such as rice, wheat, maize, gram and tur among foodgrains,
groundnut, soybean and rapeseed and mustard among oilseeds, potato, onion and banana
among horticultural crops, sugarcane and sugar, and milk. The main outputs of the project
are,
i. Quarterly reports on commodity outlook focusing on the short term prospects
ii. Semi-annual reports on medium-term prospects for the commodities and
iii. Monthly briefings on prevailing agricultural conditions in the Ministry of Agriculture
The present report provides an assessment of the prospects for kharif season output for the
major food commodities for the current year. It also updates the estimates of production
for 201213 based on the Third Advance Estimates of Production available from the
Ministry of Agriculture. In addition, estimates of production are also reviewed for three
horticultural crops and milk. Various components of outlook review are organised in five
chapters. An overview of the report is provided in the first chapter. We provide an
assessment of the global scenario of the food commodities in the second chapter covering
prospects for production, trade and prices drawing implications to Indias food sector. In
chapter III, we present an assessment of the domestic conditions affecting supply-demand
balances for the selected commodities. Commodity specific discussion is provided in
Chapter IV. The final chapter presents concluding remarks.
I.2 Agricultural Growth Slows in 201213

There has been an upward revision in the production of some of the major crops reflected
in the governments Third Advance Estimates (AE) over the Second AE. However, the
GDP from agriculture and allied sectors in 201213 has shown only a modest growth of
1.9 per cent in real terms against 3.6 percent in 201112 (Figure I.1). The official
estimates now place overall GDP growth rate in 201213 at 5.0 percent against 6.2 percent
in the previous fiscal year (Figure I.1). The GDP share of agriculture and allied sector is
estimated at 13.7 per cent in 201213 against 14.1 per cent in 201112 (Figure I.2).
The GDP share of

agriculture and
allied sector is
estimated at 13.7 per
cent in 201213
against 14.1 per cent
in 201112.
Figure I.1: GDP Growth - Agriculture vs Overall
The Third AE of
production of major
crops in 201213
brought out by the
Ministry of
Agriculture in April
2013 shows an
upward revision in
the production of
rice, wheat, pulses,
soybeans, and
sugarcane to the
earlier estimates in
February 2013.
The Third AE of production of major crops in 201213 brought out by the Ministry of
Agriculture in April 2013 shows an upward revision in the production of rice, wheat, pulses,
soybeans, and sugarcane to the earlier estimates in February 2013. Accordingly, the 201213
rice and wheat production are estimated to be only marginally down from the 201112
record levels despite the weak monsoon of 2012. The foodgrain production of 201112 was
also revised from an initial estimate of 250.42 million tonnes (Second AE) gradually to
259.32 million tonnes in the final estimates brought out in February 2013 (Figure I.3).
While 201213 production of coarse grains, oilseed, and sugarcane, registered marginal
declines over 201112 pulse production is estimated at a near record 18 million tonnes,
thanks to a record gram production of 8.5 million tonnes in the rabi season. 201213 total
foodgrain production is estimated at 255.4 million tonnes against 250.1 million tonnes in
the Second AE.
Figure I.2: Share of Agriculture & Allied Sectors in Overall GDP in Constant (200405) Prices
OVERVIEW OF AGRICULTURAL OUTLOOK
Figure I.3: Agricultural Production Trends
200809
200910
201011
201112
201213 #
Rice
Wheat
C.Grains
Pulses
99.18
89.09
95.98
105.31
104.22
80.68
80.80
86.87
94.88
93.62
40.03
33.55
43.40
42.04
39.52
14.57
14.66
18.24
17.09
18.00
Total Sugarcane
Oilseeds
27.72
285.03
24.88
292.30
32.48
342.38
29.80
361.07
30.72
336.15
Potato
Onion
Bannana
Milk
34.40
36.60
42.30
41.48
42.48
13.57
12.16
15.12
17.51
16.82
26.20
26.50
29.80
28.46
30.28
112.20
116.40
121.80
127.90
132.10
# Third Advance Estimates in the case of rice, wheat, coarse grains, oilseeds and sugarcane; First AE in the case of potato, onion and banana; and our
assessment in the case of milk.
I.3 Agricultural Production Outlook for 201314

Monsoon rainfall is one of the critical factors influencing Indias production prospects for
food commodities. Besides rainfall, the price environment for output and inputs faced by
the farmers, input availability conditions, marketing infrastructure, policies for the sector,
and global trade environment also determine the overall outlook for the food commodities.
A review of a number of factors presented in Chapter III shows that out of the 22 factors
considered, the scenario is positive in 11 indicators, adverse in seven and uncertain in four.
A more specific assessment based on a regression model framework which reduces the
large number of indicators to just two: fertiliser consumption and rainfall indicates
improved outlook conditions in 201314 as compared to 2012.13.
The forecast for 2013 by the Indian Meteorology Department has been one of normal
rainfall during the monsoon season JuneSeptember. While floods have always damaged
standing crops or delayed plantings and weakened normal farming operations, this year the
heavy rains and floods in the state of Uttarakhand in June inflicted massive loss of human
life and property. The floods in the north east also require strategies that minimise the
adverse impact on crop production besides measures to save life and property.
The forecast for the current monsoon period is that the overall rainfall would be 98 per
cent of the Lang Period Average (LPA) or the normal. In comparison the actual rainfall
during the monsoon period of 2012 was 92 per cent of LPA. The rainfall this year is,
therefore, expected to be more copious than last year (Figure I.4).
The forecast for the

current monsoon
period is that the
overall rainfall
would be 98 per cent
of the Lang Period
Average (LPA) or the
normal. In
comparison the
actual rainfall during
the monsoon period
of 2012 was 92 per
cent of LPA. The
rainfall this year is,
therefore, expected
to be more copious
than last year.
Figure I.4. Rainfall in Monsoon 2013 to be better than Monsoon 2012 (% of LPA)
The actual rainfall in June this year has been higher than forecast for the country as a
whole (Table I.1).
Taking into account

the relatively higher
rainfall in June and
July, the second half
of the monsoon
period may see
lower rainfall as
compared to the
normal.
Table I.1: Monsoon scenario for 2013

Region
Northwest
Central
South Peninsula
North-East
All India
JuneSept
2012
93
96
90
89
92
June 12
31
61
71
99
72
Rainfall % of normal
Actual
Jul 12
Aug 12
Sep 12
74
96
81
87
87
116
100
115
74
101
124
120
93
106
112
Forecast
JuneSep
2013
94
98
103
98
98
Actual
June 13
211
163
127
65
129
Source: Based on Indian Meteorology Department publications/ data in their website.
Rainfall in July 2013 for the country as a whole is projected to be 101 per cent of LPA and
in August 96 per cent of LPA. Taking into account the relatively higher rainfall in June
and July, the second half of the monsoon period may see lower rainfall as compared to the
normal. This pattern is in contrast to the one seen in 2012 where the first two months saw
lower rains and the second half experienced above normal rains.
The timely onset of the monsoon and generally well distributed rains so far along with the
expectation of good rainfall for the season as a whole provide positive outlook for the
kharif harvest. Based on rainfall and a trend variable, we have projected a range of output
of major food commodities for kharif 2013. A range of output projections were arrived at
using alternative set of equations. The projected output levels for 2013 kharif are presented
in Table I.2 along with the current official estimates for 201213.
Table I.2: Kharif 201314 Crop Forecast (million tonnes)

Crop
201213 3rd Advance Estimates
Rice
92.8
Maize
16.1
Bajra
8.7
Jowar
2.7
Other coarse grains
2.0
Pulses
6.0
Total Kharif foodgrain
128.3
Groundnut
3.5
Soybean
14.1
Sugarcane
336.1
Projected Kharif 201314

94.2 -95.1
16.6-16.8
9.0-9.7
2.6-2.7
2.2-3.8
6.0-6.1
130.6-135.2
3.5-5.0
14.1-14.9
339.8-347.0
Note: The 201314 Kharif production has been derived based on trend growth rate and the monsoon rainfall deviation from the LPA. In the case of
rice an intercept dummy variable is used for 201112 onwards to reflect the rise in output that was not captured by the trend and may reflect some of
the shifts in production across states besides productivity improvements.
Projected production of potato, onion, banana and milk for the full year 201314 are
summarised in Table I.3.
Table I.3: Production of potato, onion, banana and milk in 201213 and 201314
Commodity
201213 (First Advance Estimate)
201314 (Projected)
Potato
42.5
44.0
Onion
16.8
18.0
Banana
30.3
31.4
Milk
132.1*
137.7-138.0
Note: *Outlook report estimate.
Assessment based on rainfall and trend growth. Only one set of equations were used to estimate production in the case of potato, onion and banana.
In the case of milk, average growth rate in production in years of rainfall within 5 p cent of normal was used for projection of output in 201314.
At the global level, initial global production and price forecasts for 201314 by major
international and national agencies point to replenished supply situationafter last years
setbacks in some crops- for all major commodities such as wheat, rice, coarse grains,
oilseeds, vegetable oils, and sugar provided weather remains normal through harvest.
I.4 The Price Environment

The output price conditions have moderated somewhat from the situation that prevailed
in the last two years. The overall WPI for food articles rose by close to 9.9 per cent in
201213 and food products by 8.1 per cent. In the first three months of 201314, the rate
of increase in food articles dropped to 6 per cent in April before rising to 8.3 per cent in
May and then further to above 9.7 per cent in June (Table1.4).
In the case of food products the year on year increase in WPI during AprilJune was
steadier at about 6.7 per cent, well below the average for 201213. The higher rate of
increase in the WPI for primary articles in AprilJune 2013 is on account of cereals and
vegetables. The price rise in the case of rice, wheat, bajra and maize among foodgrain
crops remains a concern as the year on year rate of increase in these cases is high. The
high rate of price rise in cereals is also reflected in the double digit rate of increase in
the case of grain products.
Among the vegetables, onion prices have nearly doubled in the first three months of
201314 as compared to the same period last year. However, the group level index for
vegetables was below 5 per cent mark rising to double digit rate in June. In the case of
group level index for fruits was below 5 per cent mark although the price index for
At the global level,

initial global
production and price
forecasts for
201314 by major
international and
national agencies
point to replenished
supply situationafter last years
setbacks in some
crops- for all major
commodities such as
wheat, rice, coarse
grains, oilseeds,
vegetable oils, and
sugar provided
weather remains
normal through
harvest.
banana was registering double digit rate in AprilJune period.
The overall output

price conditions in
the market continue
to signal the need for
improving market
infrastructure and
productivity to
achieve stable price
conditions.
The edible oil prices have remained stable with a good rapeseed/ mustard harvest and
adequate supplies of vegetable oils in the international markets.
In the case of sugar, price trends have moderated from the experience of 201213 as
the industry is carrying large stocks from the previous year.
Milk price has remained within 5 per cent increase in the first quarter of 201314 after
it had declined to 7.24 per cent in 201213 from the double digit increase in the
previous year.
The overall output price conditions in the market continue to signal the need for
improving market infrastructure and productivity to achieve stable price conditions.
Table I.4: Trends in the prices of food commodities, food products and farm inputs: WPI, % YOY
Items
201112
201213
201314
Output prices
Apr
May
June
Apr June
Food Price Index
7.24
9.28
6.49
7.64
8.60
7.58
Food Articles
7.30
9.90
6.08
8.25
9.74
8.03
Food Products
7.12
8.13
7.27
6.50
6.41
6.72
Cereals
3.87
13.42
15.52
16.01
17.18
16.24
Rice
3.05
12.69
17.09
18.48
19.11
18.23
Wheat
-1.84
15.51
13.55
12.65
13.83
13.34
Jowar
31.13
-5.13
6.93
4.44
4.67
5.34
Bajra
10.04
20.84
25.87
25.51
26.51
25.96
Maize
21.72
13.81
10.87
11.97
16.56
13.11
Pulses
2.52
19.57
10.52
5.95
1.59
5.92
Gram
29.21
37.43
4.49
-2.23
-9.20
-2.57
Tur
-10.66
8.82
20.63
16.86
14.16
17.15
Groundnut seed
21.36
23.45
16.85
11.03
5.54
11.12
Rapeseed & Mustard seed
10.86
35.31
8.60
2.89
4.91
5.43
9.65
50.49
31.80
22.91
11.05
21.49
Soyabean
Vegetables
-1.95
17.20
-8.88
4.85
16.47
4.28
Potato
-2.25
60.46
-0.63
-3.44
-14.22
-6.75
Onion
-28.09
24.56
90.83
97.40
114.00
101.31
Fruits
14.21
1.30
0.56
0.97
-0.43
0.38
Banana
6.39
21.39
26.51
11.94
11.29
16.10
Groundnut oil
12.79
17.55
9.29
4.88
1.57
5.23
Rapeseed & Mustard Oil
16.85
13.49
-1.06
0.20
0.46
-0.13
7.58
4.21
-6.47
-6.71
-4.32
-5.84
Palm oil
Edible oils
Sugar
Grain mill products
Milk
12.55
9.13
2.01
0.75
0.00
0.92
5.11
11.33
8.67
7.33
7.21
7.73
0.27
6.71
11.04
13.82
12.93
12.59
10.31
7.24
4.04
4.46
3.74
4.08
The input prices are, however, a concern especially in the case of energy inputs. The WPI
for electricity and diesel has increased at double digit level in the first two months of the
year. While subsidies in the case of electricity offset the price increase, increase in diesel
prices affect cost of inputs to the farmers. The double digit increase in consumer price
index puts pressure on wage rates. The depreciation of the rupee would affect fertiliser
prices and more importantly the subsidies. Following a depreciation of 13.4 per cent in
201213 (rupees to dollar), there was further depreciation of 3.6 per cent of the rupee in
the first quarter of the year (Table I.5).
Table I.5: Trends in the prices of inputs: % YOY
Items
201112
201213
Input prices (WPI)
Fertilizers
201314
Apr
May
June
Apr June
13.5
12.4
7.1
7.1
4.92
6.36
8.5
11.6
20.6
21.2
22.77
21.49
Pesticides
1.1
5.5
2.6
3.0
5.09
3.57
Manuf. Prod
7.3
5.4
3.7
3.1
2.75
3.18
Electricity (Agriculture)
5.1
21.8
36.2
36.2
11.12
26.66
WPI All Commodities
8.9
7.4
4.8
4.7
4.86
4.78
CPI Agricultural labour
8.2
10.0
12.3
12.7
NA
12.51*
Exchange rate (Rs/ USD)
5.1
13.4
5.1
1.2
4.4
3.6
Diesel
Other indicators
Note: AprilMay
The MSPs for kharif 2013 season provide a framework for stability in prices for the main
commodities. In the case of rice, the support price has been increased by less than 5 per
cent. Among the coarse grains, bajra price has increased by 6.4 per cent over the MSP in
201213 and in the case of maize, the increase is 11.5 per cent. Among the kharif pulses,
MSP has been increased by 11.7 per cent in the case of tur and there is no increase for
Urad (Table I.6). Kharif oilseed support prices have been increased relatively more than in
the case of cereals. The overall increase in MSPs has been in line with the expectations of
lower rate of inflation in the economy in the current year.
Table I.6: MSPs for kharif crops: % change, YOY
Crop
201112
201213
201314
Paddy ( common)
8.00
15.74
4.80
Jowar (Hybrid)
11.36
53.06
0.00
Bajra
11.36
19.90
6.38
Maize
11.36
19.90
11.49
Ragi
8.81
42.86
0.00
Tur
6.67
20.31
11.69
Moong
10.41
25.71
2.27
Urad
13.79
30.30
0.00
Groundut in shell
17.39
37.04
8.11
Soybean black
17.86
33.33
13.64
Soybean yellow
17.36
32.54
14.29
The input prices are,

however, a concern
especially in the case
of energy inputs. The
WPI for electricity
and diesel has
increased at double
digit level in the first
two months of the
year. While
subsidies in the case
of electricity offset
the price increase,
increase in diesel
prices affect cost of
inputs to the
farmers. The double
digit increase in
consumer price
index puts pressure
on wage rates.
The MSPs for kharif

2013 season provide
a framework for
stability in prices for
the main
commodities.
The overall output price conditions in the market continue to signal the need for
improving market infrastructure and productivity to achieve stable price conditions.
I.5 Assessment of food commodity prices in the short

term
The FAO food price

index declined in
May and June as
compared to April
this year. The decline
in sugar prices index
is the steepest
among the five subgroups of the FAO
Food Price Index.
The cues from global market prices are that prices have come down in 2013 as compared
to the second half of 2012 except for the case of dairy products. The FAO food price index
declined in May and June as compared to April this year. The decline in sugar prices index
is the steepest among the five sub-groups of the FAO Food Price Index (Figure I.5). The
early June CBOT price quotes also show a weakening of prices for most commodities in
the short term reflecting improved crop prospects in 201314.
The trends in WPI for food commodities in the recent three months have shown signs of
moderation barring the case of rice and vegetables, particularly onion. Comparison with
the international prices shows that except for wheat and groundnut oil, the prices in the
international markets rose at a lower rate than in the domestic market (Figure I.6). The
rupee depreciation will add to the increase in international prices and will generally
accentuate the domestic price rise.
Figure I.5: Trends in International Prices: FAO Food Prices Indices
Figure I.6: Comparison of domestic (WPI) and international (US$) commodity price trends: % YOY
Apr 13
May 13
June 13
Apr 13*
May 13*
June 13*
Rice
Wheat
Maize
Banana
17.1
18.5
19.1
-2.2
-9.9
-9.9
13.9
12.6
13.8
9.2
20.7
13.5
11.4
12.0
16.6
10.3
9.9
11.2
26.5
11.9
11.3
-18.5
-5.0
-4.7
Groundnut
oil
2.2
4.9
1.6
38.4
34.4
30.5
R&M
Oil
-2.8
0.2
0.5
-9.8
-9.6
-5.7
Palm
oil
-7.2
-6.7
-4.3
-30.2
-26.0
-17.7
Sugar
Soyabean
8.9
7.3
7.2
-35.7
-34.8
-32.3
31.8
22.9
11.1
8.0
4.1
7.2
Note: * = international prices (in USD rates); other prices are WPI
We have examined the evolution of price trends at the wholesale level in the next 3-4
months using data for the specific market of Delhi and at the aggregate national level
(WPI). Two approaches were adopted for the short term projections as we had done in our
quarterly report for JanuaryMarch 2013. The projections are summarised in Tables I.7I.8.
Key findings are,
Projection of price trends in short run suggests that price pressures are likely to
moderate in the short term in the case of wheat, jowar, bajra and pulses among
foodgrains.
In the case of rice, although the rate of increase is moderating, the price rise over the
last year is significant.
In the case of oilseeds and oils also prices are expected to show declining trend based
on year on year trend.
In the case of onion prices are expected to show significant fluctuations and show
continued high rate of increase year on year basis. Potato prices are projected to show
decline, year on year basis but likely to rise over the next three months.
For the food sector as a whole, rate of increase of 7.4-7.5 per cent is expected in the
period JulySeptember with food articles keeping the upward pressure on prices.
Projection of price
trends in short run
suggests that price
pressures are likely
to moderate in the
short term in the
case of wheat, jowar,
bajra and pulses
among foodgrains.
Table I.7: Projections of WPI Based on ARIMA models: % Change Year on Year
Commodity
% Change YOY
% Change MOM
June13
Jul13
Aug13
Sep13
June13
Jul13
Aug13
Rice
19.1
17.6
16.6
15.0
Wheat
13.8
14.4
10.3
Jowar
4.7
8.1
4.3
Bajra
26.5
17.9
12.1
Maize
16.6
17.4
14.1
Gram
-9.2
-17.0
-19.6
-19.5
-1.9
Tur
14.2
7.9
0.0
0.4
0.0
Pulses
1.6
-6.8
-10.7
-12.6
-0.8
Groundnut Seed
5.5
7.4
4.7
1.9
-5.8
Sep13
2.6
1.6
1.2
0.8
6.0
1.8
1.5
1.1
0.0
2.1
-2.1
1.3
-1.1
-2.8
7.8
0.4
-0.5
0.0
-3.8
9.0
3.5
1.8
0.7
-2.6
1.1
2.7
-0.2
1.1
0.5
1.0
-0.7
1.7
-1.8
0.5
1.5
-1.2
Rapeseed/ Mustard Seed
4.9
3.9
-2.2
-6.5
1.7
3.3
2.5
0.7
Soyabean
11.1
-5.9
-12.0
-8.3
-7.2
-0.3
-1.5
-2.5
Edible oils
0.0
-0.2
-0.5
-1.3
-0.5
1.2
1.2
-0.5
Onion
114.0
66.2
52.6
64.0
23.9
-11.1
-1.4
7.4
Potato
-14.2
-15.9
-20.6
-9.5
1.6
4.5
0.6
4.7
8.6
7.4
7.5
7.5
2.1
0.5
0.7
0.9
Food sector
Food_articles
9.7
9.9
11.3
10.9
3.0
1.6
1.0
0.3
Food_products
6.4
5.5
4.0
3.0
0.4
1.1
1.1
0.5
Note: The figures for June 2013 are actuals and the figures for JulySeptember are projected
Table I.8: Projections of Wholesale Prices in Delhi Based on Harmonic Analysis: % Change Year on Year
Month/ Year
Jun13
Jul13
Aug13
Sep13
4.7
Rice
14.8
6.1
6.1
6.0
Tur Dal
10.1
3.7
-8
8.9
-8
8.7
-11.9
6.4
-2
24.8
-2
23.8
5.6
5.4
5.2
5.1
Moong Dal
21.9
25.3
21.3
17.2
Masur Dal
22.1
-9
9.7
-112.2
-114.3
Potato
-5.1
-110.5
-113.2
-116.2
Onion
71.0
57.6
65.6
89.2
Urad Dal
Sugar
5.1
8.5
6.5
3.9
Soy oil
-4.9
-4
4.6
-3
3.9
-2
2.7
0.1
-0
0.3
1.6
3.8
Palm oil
10
4.8
22.2
Chana Dal

201314 ending
stocks of wheat, rice
and maize are
forecast to increase,
marginally in the
case of rice and
wheat but more
significantly in the
case of maize.
23.9
Wheat
Note: Projections are in bold.
I.6 Supply demand balance

On the back of a normal monsoon, kharif production of most crops is expected to pick up
this year relative to the harvest of 201213. On the basis of emerging scenario, we have
worked out the supply demand balances for the various crop commodities covered in this
report. In most cases, data on stocks is limted and therefore, estimates are based on either
the government stocks, industry stocks (sugar) or assumptions based on past patterns of
production and trade.
At the global level, 201314 ending stocks of wheat, rice and maize are forecast to increase,
marginally in the case of rice and wheat but more significantly in the case of maize. Palm
oil stocks are expected to rise creating downward pressure on vegetable oil prices.
In Part IV of the report, we discuss the short term scenario for specific food commodities.
A summary of the scenario that is developing is the supply-demand balance sheet of the
food commodities which describes how the supply-demand balances are achieved with
fluctuations in production. The overall supply-demand balances are summarised in Table
I.9.
Table I.9: Food Balances (thousand tonnes): 201314 (000 tonnes)
Item
Rice
Wheat
Maize
Pulses Edible oils
Sugar*
Onion*
Potato*
A. Supply side
Beginning stocks
Production
Imports
Total supply
24,000
24,200
550
1800
500
6500
750
1400
107,000
90,000
22,500
18,200
9100
24000
16817
42479
3,800
10000
1500
131,000
114,200
23,055
23,800
19,600
32,000
17,574
43,879
98,000
90,200
18,395
21,800
17979
23000
15177
42243
B. Demand side
Domestic consumption
Exports
Utilisation
C. Closing stocks
8,000
5,000
4,000
200
2000
1640
236
106,000
95,200
22,395
22,000
17,979
25,000
16,817
42,479
25,000
19,000
660
1,800
1,621
7,000
757
1,400
Note: *= for marketing year 201213; in the case of pulses and edible oils small quantities of exports are made but we have ignored them in this
summary sheet. The year 201213 refers to the marketing year for each commodity.
11
12
PART II
Global Economic Context

There has been a modest global economic recovery from last years slowdown but several
economies particularly in the euro zone are still facing significant challenges and unlikely
to quickly resume normal growth rates. The Organisation for Economic Co-operation
and Development (OECD) recently trimmed its world economic growth forecast for 2013
to 3.1 percent from the November 2012 projection of 3.4 percent. Fiscal consolidation and
high joblessness have continued to impede recovery in many countries. OECD forecast
for GDP growth in 2013 for euro zone is -0.6%. The International Monetary Fund (IMF)
has cut its 2013 growth forecast for China to close to 7.8 percent in May 2013 from its
earlier estimate of 8 percent in April 2013 citing a sluggish global recovery. This is likely
to diminish potential for expansion of global food and feed consumption and trade.
II.1 Global Agricultural Outlook
The Organisation for

Economic Cooperation and
Development (OECD)
recently trimmed its
world economic
growth forecast for
2013 to 3.1 percent
from the November
2012 projection of
3.4 percent.
Unfavourable weather events negatively impacted agricultural production in 2012 in some

of the major producing and exporting regions. The US experienced its worst drought in
decades, which resulted in a significant decline in maize production and a smaller decline
in soybean production. A major dry spell also affected South Eastern Europe and Central
Asia during most of the growing season with wheat and coarse grain production
plummeting in these countries causing global prices rising sharply for most agricultural
commodities. International prices of wheat, maize and soybeans surged in 2012 in the
context of tight supply demand balances. .
High commodity prices last year are expected to stimulate crop planting this year in the
northern hemisphere. The 201314 harvest, which, despite yield risks associated with
delayed plantings in the United States, should still lead to lower prices later this year as the
anticipated rebound in crops around the world will help replenish supplies.
Global commodity outlook for 201314 is summarized below:
Wheat: Despite a tight US market, world output is set to recover in 201314, boosting
export competition. Loss of feed demand to maize will weaken prices. Nevertheless,
stocks-to-use ratio is forecast to decline.
Rice: Rice production is forecast at a record level. Because of ample availabilities and /or
rebuilding of inventories, rice prices are expected to be stable or trend downward. Global
rice market is affected by political decisions influencing rice exports, while weather
developments in Asian countries could add volatility to rice production and price.
Maize: World maize production is forecast to increase by around 10 per cent. Feed and
industrial use of maize is expected to rise at a lower rate than production growth which
will boost ending stocks. However, with demand projected to remain quite robust and with
inventories smaller than average, prices may not fall too far from current levels.
Soybeans: South American harvests have provided supply-side relief, but with YoY global
growth for 201314 expected to be smaller than in grains, the price outlook is generally
High commodity
prices last year are
expected to
stimulate crop
planting this year in
the northern
hemisphere. The
201314 harvest,
which, despite yield
risks associated with
delayed plantings in
the United States,
should still lead to
lower prices later
this year as the
anticipated rebound
in crops around the
world will help
replenish supplies.
13
bearish. Stocks to use ratio is likely to improve marginally.

Soybean oil: Although soybean oil underperformed relative to meal in the soy complex,
greater biodiesel demand will support soy oil prices in 201314. Stocks to use ratio is
likely to decline.
The 201314 world

wheat production
forecast currently
ranges from 682
million tonnes by the
International Grain
Council (IGC) to 702
FAO. USDA
production forecast
is at 696 million
tonnes.
Palm oil: Forecast record palm oil production is expected to put further pressure on the
already weak palm oil prices. European debt crisis and Chinas slower pace of economic
growth, with their impact on demand for vegetable oils, will remain the key to palm oil
price outlook. A marginal improvement in stocks to use ratio is forecast.
Sugar: Global sugar production in 201314 is estimated to be a record or near record.
International raw sugar prices are at levels not seen in nearly three years with prices less
than half the peak set in February 2011. Large supply overhang will weigh on prices. Low
prices are expected to stimulate global consumption and trade.
II.2 Early forecasts point to larger crop production

Initial global production and price forecasts for 201314 by major international and
national agencies point to a fairly comfortable situation for all major commodities such as
wheat, rice, coarse grains, oilseeds, vegetable oils, and sugar provided weather remains
normal through harvest (Table II.1). .
In the case of wheat although there is some expected shortfall in production in the United
States due to unfavourable planting conditions, this is likely to be more than offset by
higher production in Russia, Ukraine, and Kazakhstan where production declined sharply
in 201213 due to unfavourable weather conditions. Production is also expected to be
somewhat higher in the E U, Canada and Australia but lower in India, as compared to
201213. The 201314 world wheat production forecast currently ranges from 682
million tonnes by the International Grain Council (IGC) to 702 million tonnes by the
FAO. USDA production forecast is at 696 million tonnes.
Assuming normal
weather, global rice
production forecast
ranges from 479.2
USDA and 499.1
FAO compared with
the 201213 USDA
estimate of 470.2
million tonnes and
FAO estimate of
489.9 million tonnes.
14
In the case of rice also initial forecast points to a comfortable level of output. At this
preliminary stage, virtually all producing countries in Asia are projected to harvest larger
crops, with FAO forecasting both India and Indonesia heading to increases of more than
3 million tonnes each. However, the monsoon holds the key to what will happen to rice
production in 2013. Assuming normal weather, global rice production forecast ranges
from 479.2 million tonnes by the USDA and 499.1 million tonnes by the FAO compared
with the 201213 USDA estimate of 470.2 million tonnes and FAO estimate of 489.9
million tonnes.
201314 maize production is forecast to increase significantly from the drought reduced
crop in 201213 with forecasts ranging from 945 million tonnes by IGC to 963 million
tonnes by the USDA, an increase of about 10 per cent over 201213. Return to a more
normal yields in 2013, is expected to ease supply situation. Most of the increase in
production is expected in the U.S., Argentina, China and Ukraine.
Pulses production forecasts are available for only a few major exporting countries. The
forecasts point to increased production of dry peas in Canada and the United States and a
lower lentil production. In Australia, desi chick pea planted area is forecast to decline by
about 9 per cent and dun peas area by around 7 per cent, whereas lentil area is expected to
be unchanged from the 2012 level. Pulse production in Myanmar is expected to be more
or less unchanged from 2012 level with exports forecast at 1.5 million tonnes.
GLOBAL ECONOMIC CONTEXT
Buoyed largely by higher soybean production, total global oilseed production in 201314
is forecast to scale a record high of 491 million tonnes, an increase of 4.9 per cent over
201213.Prevailing competitive global prices are expected to boost 201314 soybean
production to a record high. According to USDA, a strong rebound for the U.S. crop is
expected to raise global soybean production in 201314 by 6 per cent to 285.3 million
metric tonnes. The U.S. soybean crop for 201314 is projected to increase 12 per cent to a
record large 92.3 million tonnes, based on a recovery in the yield despite a likely marginal
decline in planted area. South American production of soybeans is also forecast to increase
from the record 201213 levels.
Global production of rapeseed in 201314 is projected to increase 4 per cent to 63.1
million tonnes due to improved crops for the EU-27, Canada, Ukraine, Russia, and India.
Sunflower seed producers in Ukraine, Russia, the EU-27, and Argentina are expected to
raise global production by 10 per cent to 40.3 million tonnes. For groundnut, global
production in 201314 is projected to decline 2 per cent to 36.4 million tonnes. The
reduction would be concentrated in the United States, where groundnut area and yields are
expected well below their 201213 record. Output for other major producing countries,
including China and Argentina, would be moderately higher. Indias groundnut
production is expected to remain more or less unchanged from the previous years level of
5 million tonnes.
USDA projects global

production of all
vegetable oils in
201314 at a record
166.1 million tonnes,
an increase of 4 per
cent over 201213.
Most of the increase
is in palm oil and
soybean oil.
USDA projects global production of all vegetable oils in 201314 at a record 166.1 million
tonnes, an increase of 4 per cent over 201213. Most of the increase is in palm oil and
soybean oil. Global soybean oil production in 201314 is forecast at 44.6 million tonnes,
a record, compared with 43.0 million tonnes in 201213, with most of the increase
confined to South America and China. Projected palm oil production for 201314 is up
5 per cent at 58.1 million tonnes with almost all of the increase arising from Indonesia,
which is expected to rise to 31 million tonnes from 28.5 million in 201213. In contrast,
no gains are anticipated for Malaysian palm oil production in 201314 forecast at 19
million tonnes.
Despite an anticipated significant decline in sugar production in India, global sugar
production is expected to reach a record 175 million tonnes. Most of the increase is
expected in Brazil, the worlds biggest sugar producer, where production is likely to climb
to a record of over 40 million tonnes. Production is expected to be higher in Thailand, the
second largest sugar exporter. Output is set to fall in Russia, Ukraine, the U.S. and Mexico.
A steep decline in New Zealands milk production in recent months, following an
abnormally prolonged dry period at the start of the year, and stagnant or declining
production in other major exporting countries such as the Australia and the U.S. led to
sharp increase in global prices of dairy products in recent months. Nevertheless, New
Zealands overall output for the 201213 ( JuneMay) production year is projected to finish
at record levels. In Europe, warmer weather during April has allowed cumulative milk
production to return to the seasonal average in some countries. According to some
sources, milk output from worlds 15 largest dairy exporters is projected to increase by 0.5
per cent in 2013, less than a third of the growth seen in 2012.
Despite an
anticipated
significant decline in
sugar production in
India, global sugar
production is
expected to reach a
record 175 million
tonnes.
15
Table II.1: Global Production Forecasts for Major Food Commodities (Million Tonnes)
FAO
USDA
ABARES
IGC
Change from
previous year*
Wheat
201112
701.5
697.2
696.0
696.0
201213
659.1
655.6
656.0
655.0
201314
702.0
695.9
688.0
682.0
201112
485.3
465.8
463.0
466.0
201213
489.9
470.2
465.0
470.0
201314
499.1
479.2
472.0
NA
201112
884.3
883.3
884.0
876.0
201213
856.1
855.7
849.0
856.0
201314
960.0
962.6
944.0
945.0
201112
1167.5
1154.6
1156.0
1155.0
201213
1160.7
1126.9
1125.0
1131.0
201314
1266.0
1250.0
1223.0
1234.0
Rice
Maize
All coarse grains
Total oilseeds
201112
452.3
442.1
438.0
NA
201213
474.3
467.9
462.0
NA
201314
NA
490.8
478.0
NA
201112
181.2
157.0
152.0
NA
201213
186.7
159.9
155.0
NA
201314
NA
166.1
161.0
NA
Total veg oils
Sugar (Raw equivalent)

201112
173.5
161.9
175.1
NA
201213
177.3
172.0
179.2
NA
201314
NA
174.9
181.9
NA
Milk
201112
737.9
529.8
NA
NA
201213
759.6
544.8
NA
NA
201314
NA
556.1
NA
NA
Note: The change over previous year turns out to be uniform across forecasts in all commodities where more than one forecast is available. represents a decline and +represents an increase.
II.3 Prices
16
After weakening or remaining stagnant during January to April, 2013, world wheat, maize,
and soybean prices strengthened in May due to late season supply squeeze (Figure 2).
However, rice, soybean oil, and palm oil prices weakened in recent months reflecting larger
stocks. Sugar prices also witnessed a downward trend reflecting large carryover stocks and
prospects of another bumper crop. A notable exception was dairy products whose prices
rose sharply since the beginning of the year, peaking in April, causing the overall FAO
global food price index to rise in March and April. However, prices declined in May.
According to FAO, the leap in global prices of dairy products is partly a reflection of the
absence of commercial stocks to cater for such an unexpected reduction in availability,
rather than a more profound shortage of supplies.
Figure II.1: Global Price Trends of Major Food Commodities
Source: FAO
II.4 Price outlook bearish

An expected production rebound in most commodities in 201314 is likely to cause a
weakening in prices in coming months unless growing season weather conditions turn
hostile.
Wheat market is expected to ease moderately in 201314 and prices will dip from last
years record levels but still at a historically high level reflecting lower maize prices leading
to reduced demand for wheat as livestock feed. However, despite rising production,
increased feed consumption and low opening stocks will result in prices of coarse grains
also remaining above the five-year averages to 201112.
The prospect of an improved US harvest, continued export availability from South
America, and a softer pace of purchases by China are likely to keep soybean prices bearish.
A glut of palm oil in Southeast Asia is contributing to soybean oil price weakness. In the
U.S. domestic demand for soybean oil has been sluggish as use for biodiesel in the first
quarter of 201213 was about half its year-earlier level.
Industry sources are mostly bearish on crude palm oil prices for 2013, citing growing
stockpiles and recovery in production of competing vegetable oils. Slowing Chinese
economic growth and a decline in global biodiesel demand are also factors contributing to
weakening palm oil prices.
Global prices of dry peas, lentils, and chick peas are expected to fall in 201314 due to
larger supplies and carryover stocks in major exporting countries such as Canada.
Sugar prices are expected to weaken as the world continues to accumulate stocks. The
mood in the market is reported to be quite downbeat and there is a number of forecasts
around in the market that the price will drop further in coming months just because of the
surplus.
Dairy product prices, after peaking in April, declined in May and are likely to further
weaken in coming months.
Wheat market is
expected to ease
moderately in
201314 and prices
will dip from last
years record levels
but still at a
historically high
level reflecting
lower maize prices
leading to reduced
demand for wheat as
livestock feed.
Global prices of dry

peas, lentils, and
chick peas are
expected to fall in
201314 due to
larger supplies and
carryover stocks in
major exporting
countries such as
Canada.
17
Dairy product prices,

after peaking in
April, declined in
May and are likely to
further weaken in
coming months.
18
CBOT future price quotes (Table II.2) support the price outlook scenario for various
commodities discussed above. The early June CBOT price quotes show a further
weakening of prices for most commodities in coming months with the arrival of the new
crop, reflecting improved crop prospects in 201314. In the case of soybeans, however,
future price quotes have tended to strengthen despite an expected record production but
the direction of change for the forthcoming months is of declining prices.
Table II.2: CBOT Futures Price Quotes US$/MT
Commodity/
$ per Metric Tonne
date of Quote
Soybean CBOT Nov12
Jan13
Mar13 May13
Jul13
Aug13
02Nov12
07Dec12
04Jan13
01Feb13
01Mar13
05Apr13
03May13
07Jun13
Wheat CBOT
561.08
560.98
540.96
510.37
552.53
540.87
502.38
541.69
538.11
540.59
533.98
499.16
538.48
530.40
500.36
534.62
Sep13
Nov13
Jan14
521.48
519.56
491.26
523.97
510.00
484.01
490.62
532.69
Mar14
504.67
503.76
479.32
505.04
483.91
464.81
465.08
497.97
May14
462.22
489.61
463.43
451.21
448.73
479.78
Jul14
471.79
491.17
464.72
453.42
451.49
481.62
Sep14
Mar13
May13
Jul13
Sep13
534.25
529.66
497.88
534.71
524.42
493.74
509.73
561.17
Dec13
02Nov12
07Dec12
04Jan13
01Feb13
01Mar13
05Apr13
03May13
07Jun13
Maize CBOT
322.79
316.36
274.57
281.09
262.07
325.37
319.76
278.06
284.12
264.74
256.84
261.34
Mar13
May13
321.51
321.05
280.45
285.96
265.38
258.77
264.92
256.38
Jul13
324.45
324.26
284.67
290.00
268.14
261.71
268.41
259.23
Sep13
326.93
327.48
289.36
295.42
272.82
266.39
273.83
264.74
Dec13
293.31
299.92
277.41
271.26
278.70
270.25
Mar14
274.20
279.99
273.56
May14
275.49
Jul14
Sep14
02Nov12
07Dec12
04Jan13
01Feb13
01Mar13
05Apr13
03May13
07Jun13
Soya Oil CBOT
292.31
290.24
267.80
289.75
285.12
291.13
291.03
268.00
290.44
278.92
247.62
275.38
287.68
289.55
265.63
286.89
270.46
243.20
260.32
261.11
May13
258.84
258.94
234.04
242.60
230.01
217.31
228.04
227.55
Jul13
250.58
251.07
225.09
233.06
219.18
210.62
217.90
215.83
Aug13
253.23
254.22
229.12
237.19
223.22
214.95
221.84
219.97
Sep13
255.40
256.58
231.98
239.95
225.97
218.10
224.89
222.82
Oct13
233.35
241.42
227.84
220.56
227.55
225.48
Dec13
225.97
232.66
216.33
211.21
220.26
220.66
Jan14
1114.87 1123.68
1148.16 1156.53
1109.58 1117.51
1177.48 1183.87
1095.02 1100.98
1076.51 1082.68
1083.78 1086.21
1061.74
Oct13 Dec13
1125.23
1154.99
1116.85
1183.21
1100.98
1083.34
1080.47
1062.18
Mar14
1115.31
1176.37
1097.89
1082.02
1075.18
1057.99
May14
1109.35
1164.03
1089.29
1076.51
1067.47
1050.27
1105.61
1163.15
1085.55
1073.20
1062.18
1045.20
1110.68
1166.89
1090.17
1074.30
1061.96
1043.44
Jan13
Mar13
02Nov12
07Dec12
04Jan13
01Feb13
01Mar13
05Apr13
03May13
07Jun13
Sugar LCE
1094.58
1127.21
1089.51
1104.73
1138.01
1100.10
1168.22
1090.62
May13
Aug13
02Nov12
07Dec12
04Jan13
01Feb13
01Mar13
526.90
522.20
515.60
511.60
513.90
527.50
525.60
519.10
515.70
502.50
528.20
530.10
522.40
519.10
497.60
537.90
531.00
527.20
504.20
514.20
05Apr13
03May13
07Jun13
504.50
489.90
496.80
482.50
490.20
494.00
469.80
499.40
500.50
474.30
507.70
506.70
480.10
Source: Moore Research Centre, Inc. (www.mrci.com/ohlc/index.php)
510.70
484.60
II.5 Consumption
Most international agencies estimate wheat consumption in 201314 to rise marginally,
with forecasts ranging from 680 million tonnes by IGC to 694 million tonnes by USDA.
Despite low maize prices, feed use of wheat is expected to remain high in countries that
have a tradition of wheat feeding, such as the EU, Russia, and black sea region, where
production is expected to be much higher this year.
Increased competition among exporters and sharply lower prices in 201314 is expected to
encourage coarse grain use around the globe, with total use projected up 7 per cent to
1,220.0 million tons by USDA. Corn ethanol use in the U.S. is forecast to increase by 5.4
per cent. Several factors are likely to hamper further growth in corn use for ethanol,
including the overall decline in U.S. gasoline consumption and weak export prospects
because of increased competition from Brazil. According to the International Energy
Agency (IEA), although there is no clear indication whether the Renewable Fuels
Standard (RFS2) in the U.S. will be amended, there is growing market perception of policy
uncertainty which has introduced an additional downside risk to ethanol production in the
medium-term forecast.
According to USDA, global rice use for 201314 is projected at a record 474.0 million
tons, up 1.5 per cent from a year earlier. Bangladesh, Cambodia, China, India, Indonesia,
Nigeria, and Vietnam account for most of the projected increase in global consumption in
201314. In contrast, consumption is projected to decline in 201314 in Japan, South
Korea, and the United States.
World oilseeds consumption is forecast to increase in 201314 driven by a rise in oilseeds
crush, reflecting increased demand for vegetable oils and protein meals. USDA expects the
worldwide crush of soybeans to climb 4.3 per cent in 201314 to 239.0 million tonnes and
total oilseed crush to increase by 3.4 per cent to 408.0 million tonnes.
Correspondingly world vegetable oil consumption is also forecast to rise by 3 per cent to a
record 162.0 million tonnes, reflecting consumption growth in developing countries,
particularly China and India, and industrial demand. Indonesia, the worlds biggest palm
oil producer, is mulling a move to produce biofuel to manage abundant local supplies
which contributed to falling international prices. The historically large price discounts for
palm oil compared to soybean oil and other oils could quickly raise its use in the EU edible
oil market.
With global sugar prices expected to remain weak in 2013, sugar is expected to attract
market share from alternative sweeteners this year and also encourage increased
consumption in developing markets, which should lead to a general rise in consumption.
Increased
competition among
exporters and
sharply lower prices
in 201314 is
expected to
encourage coarse
grain use around the
globe, with total use
projected up 7 per
cent to 1,220.0
million tons by
USDA.
World vegetable oil

consumption is also
forecast to rise by 3
per cent to a record
reflecting
consumption growth
in developing
countries,
particularly China
and India, and
industrial demand.
II.6 Trade
A record wheat production and ample exportable supplies in the EU, Kazakhstan, Russia,
and Ukraine are partially offset by a smaller U.S. wheat crop. As a result, a small drop in
world trade is forecast both by USDA and IGC to 143.3 million tonnes and 137 million
tonnes respectively. The increase in exports will be from Russia and Ukraine which will
be offset by lower exports from other major exporting countries such as the U.S., Canada,
Australia and EU. The impact of detection of genetically modified rogue wheat strain
growing in a farmers field in Oregon in the U.S. on global wheat trade is expected to be
minimal. This incident resulted in Japan suspending imports of western white wheat and
feed wheat from the U.S. and South Korea imposing increased import inspection.
19
Global rice trade is forecast to remain nearly unchanged at 38 million tonnes or decline
marginally in 201314 as several traditional importers focus efforts on boosting
production. Exports from Thailand are forecast to increase marginally as the government
continues to release stocks. Exports from India are forecast to decline due to high
domestic price vis-a-vis competing exporters such as Vietnam and Pakistan. Sub-Saharan
Africa is projected to remain the largest rice-importing region followed by the Middle
East. In Southeast Asia, imports are projected to decline by around 5-per cent, with
Philippines likely to account for most of the decline.
Higher coarse grain exports are forecast coming principally from Black Sea countries as
the United States gains--and South America loses--about 15 million tons of trade. Most
of the increase is in maize forecast at around 102 million tonnes. China leads the growth
in imports, primarily as lower world prices increase corn trade. The drought in the US last
year has allowed new export opportunities to surface for countries around the world that
have expanded production because of high values.
World trade in oilseeds and vegetable oils is forecast to rise in 201314, reflecting
increased production of all three major oilseeds. Lower prices will greatly benefit the
worlds importers. Global soybean exports are forecast at a record 107.0 million tonnes, up
10.0 million driven by large exportable supplies and strong foreign demand led by China.
Soybean imports for China in 201314 are projected up to 69 million tonnes from a
revised 201213 forecast of 59 million tonnes.
Global pulse trade in

201314 is likely to
remain more or less
unchanged from the
201213 level.
Low prices are

expected to
stimulate global
sugar consumption
and trade,
Global soybean oil trade is forecast to grow slightly due to rising demand in China and
India. Global palm oil trade is also expected to expand on abundant supplies and
competitive prices. While Indonesias exports are forecast at 21.0 million tonnes, up
900,000 tonnes, Malaysias exports are likely to remain more or less unchanged at 17.2
million tonnes.
Global pulse trade in 201314 is likely to remain more or less unchanged from the
201213 level. An increase in dry pea trade will be largely offset by decline in chickpeas
trade from Canada and Australia. Exports from Myanmar is forecast to remain more or
less at the same level as in 201213 at around 1.5 million tonnes, which included mostly
urad, tur, and mung.
Low prices are expected to stimulate global sugar consumption and trade, with the USDA
exports forecast up 4 per cent at 59 million tonnes. Brazil and Thailand will dominate
export expansion.
Supplies of milk products for trade are still constrained by weather related factors affecting
milk production in most of the major exporting countries.
II.7 Stocks
201314 global ending stocks of wheat are forecast to increase marginally, with the USDA
forecast at 181 million tonnes, and IGC forecast at 180 million tonnes. Stocks in the
United States are expected to drop, whereas most other exporter stocks (except India) are
expected to grow. A marginal decline in global stocks-to-use ratio is forecast.
USDA is forecasting a marginal increase in rice stocks by the end of 201314 marketing
year at around 109 million tonnes, the highest ever. Most of the stocks increase is in India
and Thailand but is forecast to remain unchanged in China. Stocks-to-use ratio is placed
at 22.8 per cent, a marginal increase over the previous year.
20
Maize stocks are projected to increase by the end of 201314 marketing year to around
152 million tonnes from the previous years 124 million tonnes. Stocks-to use ratio is also
expected to improve
While soybean oil stocks-to-use ratio is projected to decline, there is a significant
improvement in the stocks to use ratio of palm oil.
Sugar ending stocks and stocks-to-use ratio in 201213 are projected to improve to one of
the highest levels in recent years.
Figure II.2: Stocks-to-Use Ratio of Major Ag Commodities
Lower global price

outlook for Indias
major export items
such as rice, wheat,
maize, and soybean
meal is bearish and
Indian exports of
these commodities
will face increased
competition from
other exporting
countries in coming
months.
II.8 Implications for India

Agricultural trade outlook for India presents a mixed picture. Lower global price outlook
for Indias major export items such as rice, wheat, maize, and soybean meal is bearish and
Indian exports of these commodities will face increased competition from other exporting
countries in coming months. This is further accentuated by the increasing cost of
production for most agricultural commodities in India necessitating higher government
support prices leading to higher market prices. A redeeming factor in recent months has
been a sharp weakening of India rupees against US dollar making it possible for Indian
exporters to offer competitive prices to international buyers.
Setting high export price for wheat by the government could discourage exports in the
context of declining global prices. Furthermore, a significant decline in wheat
procurement this year could make the government more cautious about export allocation,
especially in the context of implementing the National Food Security Ordinance, which
entails statutory provision of highly subsidized food grains to a major proportion of Indian
population. Nevertheless, there could be some comparative advantage for India in exports
of wheat to neighbouring countries such as Bangladesh, which was a major importer of
Indian wheat 201213, due to lower transportation costs.
Setting high export

price for wheat by
the government
could discourage
exports in the
context of declining
global prices.
Indian rice exports in 201314 are likely to be tempered by reduced domestic exportable
surplus and higher domestic requirement with the passing of the National Food Security
Ordinance. The burgeoning rice stocks in Thailand also increase the potential for
decreased exports as Thailand could release supplies from its stocks and promote exports
21
to regain its share of rice trade. Indian rice export price quotes have increased in recent
months vis-a-vis other major exporting countries such as Vietnam and Pakistan, slowing
exports. Efforts to achieve self sufficiency by major importing countries also could
negatively impact global rice trade in general and Indian rice exports in particular. The
only saving factor has been the continuing weakening Indian rupee against US dollar.
Indian exports of maize also face the same dilemma of weakening global prices and
increasing domestic cost of production.
On the import side, vegetable oil, Indias major agricultural import item, should benefit
from declining global prices, which however could be offset to some extent by the
weakening rupee, making imports costlier in rupee terms. Imports of pulse also will
become costlier due to the depreciation of rupee against dollar.
Indias competitiveness in the international sugar market will continue to be under pressure
by lower production, high domestic prices and increasing sugarcane prices in the context
of rising global production and record stocks resulting in declining international prices.
22
Box II.1: International Ag Policy Developments

Likely to Impact India
Cheap Black Sea wheat to get pricier as storage improves
The Black Sea region may no longer be a source of deeply discounted wheat on
world markets this autumn as improving storage and financing conditions mean
farmers will have less need to sell urgently. In the past, farmers in Russia and
Ukraine sold quickly and aggressively, as storage capacity constraints and limited
access to credit forced them to market immediately after harvest. Major investment
in grain infrastructure and storage in recent years in the region has convinced banks
to participate more in financing the trade. While Russia and Ukraine are expected
to store some grain, analysts said they would remain one of the worlds cheap
suppliers, typically attracting interest from price-sensitive buyers in North Africa
and the Middle East. (Source: FAO based on Agrigate Media)
Cambridge-based scientists develop super wheat

British scientists say they have developed a new type of wheat which could increase
productivity by 30%.The Cambridge-based National Institute of Agricultural
Botany has combined an ancient ancestor of wheat with a modern variety to
produce a new strain.
In early trials, the resulting crop seemed bigger and stronger than the current
modern wheat varieties. It will take at least five years of tests and regulatory
approval before it is harvested by farmers. Some farmers, however, are urging new
initiatives between the food industry, scientists and government. (Source FAO
based on BBC)
Egypt seeks end to foreign wheat dependence

Egypt is stepping up its wheat production in a bid to stem the countrys dependence
on foreign imports, Industry and Trade Minister Hatem Saleh said. Wheat
production is expected to reach 10 million metric tons this year, and within two to
three years Egypt will achieve self-sufficiency, according to the Minister. Egypt,
the worlds largest wheat importer, has cut wheat imports for its subsidized bread
program by 35 percent to 3.4 million tons in the 12 months ending in June as the
government struggles to raise funds, the U.S. Department of Agricultures Foreign
Agricultural Service estimates. (Source: FAO based on Business Week)
Saudi Arabia to halt wheat production by 2016

Saudi Arabia is likely to totally depend on wheat imports starting from 2016, says
Waleed El-Khereiji, head of Grains and Silos Flour Management Organization
(GSFMO).
Many foreign traders have been scrambling for deals in the Saudi market after the
Kingdom decided to scrap its 30-year program to boost local wheat output that had
reached self-sufficiency. Since 2008, the government started reducing wheat
purchases from local farmers at an annual rate of 12.5 percent, an official from the
agriculture ministry says. He said the Kingdom halted its wheat production
program to save underground water. (Source: FAO based on Arab News)
23
Thailand-Government estimates Rice Mortgage Program losses at

$7 billion
The losses that the Thailand government had to incur due to rice sales at below
purchase prices under the rice mortgage program is estimated at around Bt 216
billion (about $7 billion, using todays exchange rates) as of January 31, according
to the Deputy Commerce Minister. The minister said today that the exact figures
cant be provided because the government is still holding rice stocks valued at
around Bt 226 billion (about $7.4 billion, using todays exchange rates).The
government has purchased around 40 million tons of paddy (about 25 million tons,
basis milled) from farmers since the implementation of the rice mortgage program
in October 2011. However, most of the details of the purchases, sales, stocks and
prices were kept secret by the government so far. (Source: www.oryza.com)
Thailand to regain spot as Worlds Top Rice Exporter over next

decade, Says OECD
Thailand lost the top rice exporter crown to India in 2012 after remaining at the
top for decades, but the southeast country may soon regain the top rice exporter
status and keep it for at least ten years, according to the Organization for Economic
Cooperation and Development (OECD).OECD expects Thailands rice exports to
bounce to around 8.8 million tons in 2013 and then remain at around 12 million
tons until 2022, making Thailand the top rice exporter in the coming decade.
Thailands rice exports plunged to around 7 million tons in 2012, down around 35%
from around 10.6 million tons exported in the previous year. (www.oryza.com)
Bangladesh plans to increase rice storage to 3 million tons by 2020

Bangladesh is aiming to increase its rice storage capacity to around 3 million tons
by 2020, up around 76% from the present capacity of 1.7 million tons. According
to local sources, the government plans to increase the current rice storage capacity
to 1.9 million tons by 2014 and 2 million tons by 2015. Officials say that increasing
rice storage capacity will play an important role in ensuring food security in the
country, ensuring good returns to farmers and also help the country become a rice
exporter in future. (www.oryza.com)
Argentina biodiesel consumption

Formerly fixed at 7 percent, between April and June, mandatory blending of diesel
fuel with soy oil-based biodiesel will be raised by one percent each month until it
reaches 10 percent. Mandatory blending was introduced in 2010 with the objective
to reduce national outlays on fossil fuel imports as well as to support domestic soy
oil consumption thus reducing the countrys dependence on soy oil exports. The
higher blending rate should lift domestic biodiesel consumption to around 1.4
million tons per year. Increased local demand is said to help the countrys biodiesel
industry, which in recent months has been increasingly suffering from overcapacity
and falling export demand (Source: FAO)
Malaysia palm oil-based biodiesel

After announcing nation-wide implementation of 5% mandatory fuel blending last
January, the government is planning to move to B10 (10% mandatory blending) by
mid 2014. Meanwhile, last month, B10 blends have already been introduced at the
armed forces, the capitals city hall and at the Malaysian Palm Oil Board. In
24
addition to pursuing environmental objectives, the policy aims at increasing palm

oil usage in the domestic market and contributing to price stabilization. The same
objectives are pursued by the recently announced creation of a partly state-owned
biodiesel consortium. The consortium, which includes plantation and biodiesel
companies as well as other investors, is expected to absorb one million out of the
countrys current 2.5 million palm oil stockpile. Reportedly, the consortium is
poised to attract substantial government subsidies, the level of which will depend on
the market price for palm oil. (Source: FAO)
United States biofuel feedstock

The US Environmental Protection Agency (EPA) informed that it accepted a
petition from Canada by which all biofuel and biofuel feedstock, including
rapeseed, approved in Canada automatically meet the requirements of the US
Renewable Fuels Standard programme. EPAs approval opens the doors for the
exportation of Canadian rapeseed to the United States for use in biodiesel
production (Source: FAO)
Indonesia/Malaysia palm oil exports tax

Reflecting recent reductions in international benchmark prices, in Indonesia the tax
collected on crude palm oil exports has been set at 9% for both May and June,
compared to 10.5% applied in the two preceding months. The tax for refined oil and
refined olein has been fixed at, respectively, 0% and 3%. By contrast, Malaysias tax
on crude palm oil shipments will remain unchanged at 4.5% for the fourth
consecutive month. The change in the exports tax pattern could favour Indonesian
exports over those of Malaysia (Source: FAO)
NOTE
Most recent detailed country by country analysis of the commodity situation and outlook
are available in the following reports:
Food and Agriculture Organization of the United Nations
Cereal Supply and Demand Brief June 2013
www.fao.org/worldfoodsituation/wfs-home/csdb/en/
Monthly Soybean Supply and Demand Roundup -Feb 2013
www.fao.org/fileadmin/templates/est/COMM_MARKETS_MONITORING/Oilcrops
/Documents/MSSDR/MSSDR_May__13__.pdf
International Commodity Prices
www.fao.org/economic/est/statistical-data/est-cpd/en/
United States Department of Agriculture Foreign Agricultural Service
Grain: World Markets and Trade, June 2013
http://usda01.library.cornell.edu/usda/current/grain-market/grain-market-06-122013.pdf
Oilseeds: World Market and Trade, June 2013
http://usda01.library.cornell.edu/usda/current/oilseed-trade/oilseed-trade-06-12-2013.pdf
25
Sugar: World Markets and Trade May 2013

http://usda01.library.cornell.edu/usda/current/sugar/sugar-05-23-2013.pdf
United States Department of Agriculture Economic Research Service
Wheat Outlook, May 2013
www.ers.usda.gov/publications/whs-wheat-outlook/whs-13e.aspx#.Ubl3yuc3CHM
Rice Outlook, May 2013
www.ers.usda.gov/publications/rcs-rice-outlook/rcs-13e.aspx#.Ubl5Vec3CHM
Oil Crops Outlook, May 2013
www.ers.usda.gov/publications/ocs-oil-crops-outlook/ocs-13e.aspx#.Ubl5nOc3CHM
Feed Outlook, May 2013
www.ers.usda.gov/publications/fds-feed-outlook/fds-13e.aspx#.Ubl51uc3CHM
ABARES
Agricultural Commodities Outlook, March 2013
http://adl.brs.gov.au/data/warehouse/agcomd9abcc004/agcomd9abcc004201303/AgCom
modities2013.No1_Ver1.0.0.pdf
Agriculture and Agri-Food Canada
Canada-Outlook for Principal Field Crops May 2013
www.agr.gc.ca/pol/mad-dam/index_e.php?s1=pubs&s2=fco-ppc&s3=php&page=fcoppc_2013-05-21
International Grains Council
Grain Market Report, May 2013
www.igc.int/en/downloads/gmrsummary/gmrsumme.pdf
Additional references
OECD, General Assessment of the Macroeconomic Situation, in OECD Economic
Outlook, Volume 2012 Issue 2, OECD Publishing,
http://dxdoiorg/10.1787/eco_otlook_2012-2-enand Volume 2013, Issue 1.
IMF, World Economic Outlook, April 2013 and Press Release No. 13/192May 28,
2013.
26
PART III
Overview of the Domestic Food

Outlook
III.1 Agricultural Production Outlook for 201314
Agricultural outlook is shaped by various factors, internal and external, directly or
indirectly impacting production. These can be broadly classified into (a) weather; (b)
price environment; (c) input supply situation; (d) demand conditions; (e) supply
bottlenecks; (f ) trade environment; and (g) macroeconomic and external factors. In many
of these cases government policies play an important role. Following is the current status
of various factors impacting the 201314 agricultural outlook particularly for the current
kharif season.
III.1.1 Rainfall
Monsoon rains are the most critical factor impacting the agricultural production outlook.
Its arrival, progression, spatial and temporal distribution, and time of withdrawal are
crucial in determining the agricultural outcome. The IMDs latest forecast confirms its
earlier forecast that the Southwest monsoon seasonal rainfall is likely to be 98% of the
Long Period Average (LPA) with a model error of 5%for the country as a whole. The
annual rainfall in the monsoon period of 2012 was 92 per cent of the LPA. The LPA
rainfall over the country as a whole for the period 19512000 is 89 cm.
However, what also matters is the temporal and spatial distribution of rains during the
monsoon season. This assumes greater significance this year as several parts of the country,
particularly Maharashtra, Tamil Nadu, and Karnataka, were facing severe drought
conditions following the deficient rainfall in the last monsoon and inadequate rainfall in
the post monsoon period as well.
According to the IMD forecast, rainfall over the country as a whole for the month of July
2013 is likely to be 101% of its LPA and that for the month of August is likely to be 96%
of LPA both with a model error of 9 %.
Over the four broad geographical regions of the country, rainfall for the 2013 SW
Monsoon Season is likely to be 94% of its LPA over North-West India, 98% of its LPA
over Central India, 103% of its LPA over South Peninsula, and 98% of its LPA over
North-East India all with a model error of 8 %. This year, setting in of southwest
monsoon over the Andaman Sea was 3 days ahead of the normal date of onset.
Last year the monsoon set in over Kerala on June 5, four days later than the normal date
and covered the entire country by July 11. For the country as a whole, the rainfall for the
season ( JuneSeptember) was 92 % of its LPA. Rainfall distribution over time and space
was erratic. The monthly rainfall over the country as a whole was 72% of LPA in June,
87% of LPA in July, 101% of LPA in August and 111% of LPA in September. Seasonal
rainfall was 93% of its LPA over Northwest India, 96% of its LPA over Central India, 90%
of its LPA over south Peninsula and 89% of its LPA over Northeast (NE) India. As a
result, there was a decline in production of most rainfed kharif season crops.
According to the IMD

forecast, rainfall
over the country as a
whole for the month
of July 2013 is likely
to be 101% of its LPA
and that for the
month of August is
likely to be 96% of
LPA.
27
As on July 10, the

cumulative seasonal
rainfall for the
country as a whole is
19% above the LPA.
This year the arrival and progress of the monsoon so far has been extremely good. The
monsoon set in over Kerala on June 1 which is the normal date of onset. On the same day,
it also advanced into Lakshadweep, entire Kerala, some parts of Coastal & South Interior
Karnataka, and most parts of Tamil Nadu. It covered rest Karnataka, entire Arunachal
Pradesh & Goa, most parts of Andhra Pradesh, Assam, Meghalaya, Nagaland, Manipur,
Mizoram, southern parts of Maharashtra and some parts of West Bengal & Sikkim by 8th
June 2013. It further advanced over South Gujarat & Madhya Pradesh, many parts of
Chhattisgarh, entire Orissa and some parts of Jharkhand and some more parts of West
Bengal on 10th June, 2013 and covered the entire country by mid-June. As on July 10, the
cumulative seasonal rainfall for the country as a whole is 19% above the LPA.
The overall price

situation at present
supports a
favourable
agricultural outlook.
The current prices of
most crops are
higher than last year.
Measured by the
Wholesale Price
Indices (WPI), food
articles price index
in June this year was
9.7% higher on yearon-year basis.
III.1.2 Price Environment
Input prices
(fertilizer, diesel,
electricity,
pesticides) showed a
mixed trend.
Input prices (fertilizer, diesel, electricity, pesticides) showed a mixed trend. While WPI of
high speed diesel and electricity (for agriculture) recorded an year-to-year increase of
around 22.7% and 11.2% respectively in June 2013 (11.6% and 22% respectively for FY
201213), fertilizer prices as a group registered an increase of around 5 per cent, with most
of the increase confined to non-nitrogenous fertilizers. Urea price remained almost
unchanged, ammonium sulphate prices declined by 7.3 per cent, while most phosphorous
based fertilizer recorded a significant growth of upto 15%. There was only a marginal
increase in pesticide prices. Urea price is expected to remain more or less unchanged as its
price is controlled by the government and is unlikely to be revised upward this year. Prices
of other decontrolled fertilizers will largely depend on the international prices and exchange
rate although the government is providing subsidies to decontrolled fertilizers to encourage
balanced use of fertilizer. Indications are that global prices of fertilizer will soften in
201314. The budgetary allocation for fertilizer subsidy in 201314 is Rs. 660 billion (Rs.
155.4 billion for imported urea, Rs. 210 billion for domestic urea, and Rs. 294.3 billion for
sale of decontrolled fertilizers with concessions to farmers) almost unchanged from the
201213 level. Overall, energy prices- electricity and diesel would be a concern for farmers.
Depreciation of the
rupee would put
upward pressure on
imported raw
material and
feedstock for fuel
and electricity.
The overall price situation at present supports a favourable agricultural outlook. The
current prices of most crops are higher than last year. Measured by the Wholesale Price
Indices (WPI), food articles price index in June this year was 9.7% higher on year-on-year
basis. For the year as a whole, the average WPI for food articles was almost 10% above the
average for the previous year. Among kharif crops, June rice price is up 19.1%, maize
16.6%, jowar 4.7%, bajra 26.5%, tur 11.7%, groundnut 5.5%, and soybean 11%. Following
the recommendations of CACP the government has announced 4.8% increase in the MSP
for paddy. The MSP for maize, moong, groundnut, and yellow soybeans are increased by
11.5, 2.3, 8.1, and 14.3 per cent, respectively, whereas no increase in MSP is proposed for
ragi, urd, nigerseed and sunflower. With increased focus on procurement of paddy from
eastern states with larger budget allocations for Bringing Green Revolution to Eastern
India program and the hike in its support price, paddy cultivation is likely to remain more
attractive this year followed by maize and soybeans vis--vis other competing cops. Taking
MSP for rice and soybean as two indicative commodities, the overall output prices are
likely to be about 5 per cent above the levels seen in 201213. This is the expected rate of
overall inflation for the current year and, therefore, the crop price scenario for the
producers is in line with the overall WPI inflation rate.
Depreciation of the rupee would put upward pressure on imported raw material and
feedstock for fuel and electricity. The fertiliser prices are likely to remain stable because of
the moderate price conditions in the international markets and subsidies to the domestic
producers of urea.
28
OVERVIEW OF THE DOMESTIC FOOD OUTLOOK
III.1.3 Input supply situation

Input supply situation is generally favourable. The government has adequate supply of
certified and quality seeds of most kharif crops to meet the anticipated requirement,
although the use of such seeds by farmers accounts for only a small share of the total seed
requirement due to prevailing low seed replacement rate in most states. As against the
likely requirement of about 140 lakh quintals, nearly 154 lakh quintal seed is available. For
rice 69.2 lakh quintal seed is available while the requirement is pegged at 62.5 lakh quintal.
Among major cereals, there is reportedly a slight shortfall in the availability of maize seed.
Among pulses, availability exceeds in the case of urad and moong, but there is slight
shortage in the case of arhar (tur). Sufficient quantities of quality seed is available for major
oilseeds grown in kharif season, i.e. groundnut, soybean, sesame and sunflower.
Fertilizer supply situation is adequate although the sales up to mid-May is only 3.0 million
tonnes of urea, 242,000 tonnes of DAP, 107,000 tonnes of MOP and 339,000 tonnes of
complex fertilizers, somewhat lower from the normal requirement. Sales are expected to
pick up with the progress of the monsoon.
Agricultural credit is a key enabler of agricultural production activities. For 201314 the
target for institutional agricultural credit has been set by the government in its annual
budget at 700,000 crore, an increase of 22 per cent from 201213 of over 575,000 crore.
Live water storage available in the CWC monitored 85 major reservoirs on was 31.52
BCM on June 6, marginally down from the previous week. However, with the normal
arrival of the monsoon and its quick progression, the irrigation situation is expected to
improve considerably. Adequate rainfall in the catchment areas of reservoirs is critical
particularly for the southern and central states in the current season so that water would
be available for protective irrigation.
Agricultural credit is
a key enabler of
agricultural
production activities.
For 201314 the
target for
institutional
agricultural credit
has been set by the
government in its
annual budget at
700,000 crore, an
increase of 22 per
cent from 201213 of
over 575,000 crore.
III.1.4 Demand Conditions

Food demand is influenced by income, price, population, and taste factors in the medium
to long term. In the short term, while the impact of these factors is likely to be less
significant, the overall impact is to be seen in terms of changing structure of production
and demand. The sharp slowdown in economic growth for the last two years combined
with higher prices for most food items can be expected to result in lower demand for high
value products in particular which to some extent will be offset by the increasing
population and more efficient use of food, reducing wastage. With the National Food
Security Ordinance (NFSO), the demand for wheat and rice could go up as more supplies
will be available at lower prices through the PDS and the indirect effect may be to increase
demand for more high valued food items as well. However, the overall impact would be
determined by the roll out of the program across states. A number of states already have
in place PDS matching the norms of NFSO. Successive NSS Consumer Expenditure
Surveys indicate a change in food preferences in India with per capita consumption of
most food grains declining where as demand for high value food products such as meat,
fruits, milk and milk products increasing. As these changes would increase feed demand
for grains and oilseeds, the overall domestic demand for food commodities is expected to
be supported by such changes even in the short term.
National Food
Security Ordinance
(NFSO), the demand
for wheat and rice
could go up as more
supplies will be
available at lower
prices through the
PDS and the indirect
effect may be to
increase demand for
more high valued
food items as well.
III.1.5 Supply chain bottlenecks

The major supply bottleneck the country facing currently is inadequate storage capacity for
foodgrains procured by the government. With a significant decline in wheat procurement
this year, the storage situation is unlikely to accentuate now. But, in the absence of
29
adequate government grain procurement facilities in some states such as Uttar Pradesh and
Bihar, farmers fail to get the minimum support price, acting as a disincentive to increase
production. Poor logistics and port congestion often adversely impact export potential of
bulk agricultural commodities. While there have been fresh investments in these sectors,
the impact of additional capacities is likely to be felt only in the longer term.
III.1.6 Trade environment
Positive impact of
improved global
production
conditions is the
larger domestic
supplies and lower
prices for the
consumers. The
weakening Indian
rupee, however,
offsets some of the
price effects and
providing some
relief to exports,
while raising prices
of imported
vegetable oils and
pulses.
30
The government has not placed any fresh storage restrictions on most food items which
should result in increased private participation in trade, both domestic and international.
Exports of most agricultural commodities remain unrestricted with the exception of pulses
and vegetable oils. No significant change in the trade policy is expected this year in the
case of grains and edible oils given that the rainfall distribution is expected to be normal.
Domestic sugar industry is facing increasing competition from imports despite a 10%
import duty raising the possibility of an upward revision in the duty. The import duty was
further enhanced to 15% in July. However, sugar sector has also seen some significant
policy reforms, dismantling restrictions on the sale of sugar and supporting fresh
investments in the sector. Import duty on vegetable oils is likely to remain unchanged
because of the widening supply-demand gap.
III.1.7 External factors

External or global factors are not as conducive to agricultural exports this year unlike last
year due to improved global production outlook for most traded commodities such as
wheat, rice maize, soybean/soybean meal and sugar. This could reduce Indian exports of
these commodities as compared to the significant increase last year. However, the positive
impact of improved global production conditions is the larger domestic supplies and lower
prices for the consumers. The weakening Indian rupee, however, offsets some of the price
effects and providing some relief to exports, while raising prices of imported vegetable oils
and pulses.
The following Table summarises the current status of factors impacting the Agricultural
Outlook Scenario:
Table III.1: Agricultural Outlook Indicators
Indicator no.
Indicators
Status vis-a-vis last year
Impact on Outlook for Production
Monsoon
1
Onset
Expected rainfall
+
+
Output prices
MSP of major crops
+Neutral?
Fertiliser Prices
+
+
Prices
Diesel Prices
Subsidy on fertilisers
Fertilisers
Seeds
10
Credit
11
Reservoir water level
12
Electricity
+
+
+
-
Exchange rate
+?
14
FAO cereal price index
+?
15
FAO vegetable oil price index
+?
16
Global sugar price
17
Global fertilizer price
Rice
19
Wheat
20
Oilmeal
21
Sugar
+?
22
Pulses
23
Edible oils
+
+
Input availability
8
External factors
13
Export outlook
18
Global supplies
Note: = improvement or better, = decline or less favourable, = stable or neutral
The discussion on outlook prospects summarised in the above (Table 1) suggests that the
overall outlook prospects are positive with 11 indicators rated to be positive for outlook,
seven adverse and another four uncertain. To provide an alternative assessment, we
examined the relationship between overall agricultural production and variables that can
be tracked to assess production index. The analysis suggests that the present set of
conditions point to improved agricultural production performance in 201314 relative to
the previous year (Box III.1 below for details).
The overall outlook

prospects are
positive with 11
indicators rated to be
positive for outlook,
seven adverse and
another four
uncertain.
31
Box III.1: Assessing Agricultural Outlook

We present here a quantitative assessment of agricultural outlook for 201314 using
the overall agricultural production index as a measure of outlook. This is more
comprehensive than the production of food crops alone as it includes non-food
crops also. The agricultural production index (API) was regressed on major
exogenous factors impacting production such as rainfall, fertilizer use (NPK), %
gross irrigated area, and a trend variable to account for technological and other
improvements in conditions affecting production. Using this regression equation,
we forecast API for 201314 based on available information on rainfall, input use,
and other exogenous factors, which essentially reflects the agricultural outlook. All
the exogenous variables have been converted into index measures using the base
year data as 100. It was found that rainfall, fertilizer use (Total NPK) and trend are
significant factors impacting the API.
The estimated linear regression equation using the API1 and other data for the
period 199899 to 201112 is:
API = 0.543966 RAINI + 0.348383 FERTI + .004884 T
(0.0541)
(0.0626) (0.0041)
R2 = 0.9995
Where API = Agricultural Production Index; RAINI = Rainfall Index for rainfall
during JuneSeptember; FERTI = Fertilizer Index; T = Trend variable. Figures in
parentheses are t values.
An alternative proxy for agricultural outlook was the FAO production index for
India2. The estimated linear regression equation using the data for 199899 to
201112 is:
APIFAO = 0.49019 RAINI + 0.419938 FERTI + 0.006283 T
(0.0732)
(0.0846)
(0.0055)
R2 = 0.9992
The estimated API for 201213 using the regression equation is: 113.7 using the
DES data and 122.42 using the FAO data depicting a decline of around 8% and 9%
respectively over 201112.
API for 201314 using the current forecast of the monsoon (98% of LPA) and
projected fertilizer consumption (NPK nutrients) at marginally higher than the
201213 level at 27.7 million tonnes, is 118.9 using DES data and 127.8 using the
FAO data, 4.5 percent and 4.4 percent, respectively, higher than in 201213. This
implies that based on prevailing conditions, a better agricultural outlook is expected
for 201314 vis--vis 201213. The outlook will be updated as additional
information become available as the season progresses.
1. The base year for the API has changed over the period of analysis. However, using a link factor all
data are converted to base year of T.E. 200708 =100
2. http://faostat.fao.org/site/612/DesktopDefault.aspx?PageID=612#ancor
32
III.2 Projection of kharif output for 201314

Based on analysis of recent trends and the impact of total rainfall we present a set of
projections for the major kharif crops in Table III.2.
Table III.2: Kharif 201314 Crop Forecasts (million tonnes)
Crop
201213 3rd Advance Estimates
Rice
Projected Kharif 201314
92.8
94.2 -95.1
Maize
16.1
16.6-16.8
Bajra
8.7
9.0-9.7
Jowar
2.7
2.6-2.7
Other coarse grains
2.0
2.2-3.8
Pulses
6.0
6.0-6.1
128.3
130.6-135.2
3.5
3.5-5.0
Total Kharif foodgrain

Groundnut
Soybean
Sugarcane
14.1
14.1-14.9
336.1
339.8-347.0
Note: The 201314 Kharif production has been derived based on trend growth rate and the monsoon rainfall deviation from the LPA. In the case of
rice an intercept dummy variable is used for 201112 onwards to reflect the rise in output that was not captured by the trend and may reflect some of
the shifts in production across states besides productivity improvements.
III.3 Food inflation continues to remain high but

expected to moderate in the short term
Year on Year food inflation based on wholesale price index for food articles, after peaking
at 12.4 percent in January 2013, showed a declining trend dropping to 6.1 percent in April.
However, in May there was again a spurt in food inflation rising to 8.3 per cent and 9.7
per cent in June. While price inflation of most commodities remained stable or declined
during JanMay 2013, there was a spurt in the price of rice and onion. Rate of increase of
onion price continued to remain high at close to 100 percent during the same period.
Wheat, pulses, and potato price rise showed a generally downward trend with the harvest
of the new crop (Table III.3). Food inflation continued to remain above the overall
inflation (Figure III.1).
While there are macroeconomic level factors that may have an impact on food inflation,
more proximate direct factors are the significant increases in the cost of production which
then led to the increased minimum support prices, increased government procurement of
wheat and rice that reduce availability of grain in the open market.
(Contd...)
While there are

macroeconomic
level factors that
may have an impact
on food inflation,
more proximate
direct factors are the
significant increases
in the cost of
production which
then led to the
increased minimum
support prices,
increased
government
procurement of
wheat and rice that
reduce availability of
grain in the open
market.
33
Table III.3: Year-on-Year Inflation Trend in Major Food Commodities: WPI % change YOY
Food articles Rice
Wheat
Pulses
Potato
Onion
Milk
Veg oils
Jan12
Sugar
-0.68
0.94
-3.42
11.01
-23.15
-75.62
12.33
9.43
2.54
6.12
1.53
-3.95
7.86
-2.22
-48.66
11.70
7.65
4.07
Mar
10.11
5.03
-0.58
10.10
18.43
-24.06
15.29
9.94
2.87
Apr
10.92
5.98
5.97
11.29
59.30
-11.03
15.68
11.18
3.16
May
10.63
4.89
6.75
16.77
72.17
-8.05
11.90
10.37
5.24
Jun
10.91
7.46
6.76
20.59
84.91
-9.46
7.46
9.52
7.13
Jul
10.17
9.95
6.44
28.57
73.24
-10.05
8.01
10.85
9.38
Aug
9.34
10.35
12.97
34.54
70.74
-20.71
6.68
10.91
16.91
Sep
8.06
12.58
18.87
28.98
52.45
-24.69
6.45
10.71
19.87
Oct
6.72
14.97
19.78
19.86
49.13
-9.12
6.35
9.38
18.88
Nov
8.80
15.28
23.25
18.77
67.85
16.55
6.18
9.76
15.48
Dec
10.63
17.10
22.63
16.25
58.03
72.79
6.15
9.20
9.84
Jan13
12.35
17.77
21.87
15.89
73.10
125.17
4.52
7.54
10.09
Feb
11.95
17.75
21.81
13.95
50.14
182.36
4.52
7.04
10.49
Feb
Mar
8.63
17.56
19.35
10.84
15.80
110.74
4.42
3.60
9.35
Apr
6.08
17.09
13.55
10.52
-0.63
90.83
4.04
2.01
8.67
May
8.25
18.48
12.65
5.95
-3.44
97.40
4.46
0.75
7.33
June
9.74
19.11
13.83
1.59
-14.22
114.00
3.74
0.00
7.21
Figure III.1: Food Inflation Exceeds Overall Inflation Rate
Projection of price trends in short run suggests that price pressures are likely to moderate
in the short term. Details of the price projections are presented in Chapter I.
III.4 Policies
A summary of the policy initiatives on agriculture and related sectors taken during the past
quarter is provided in Table III.4.
34
Table III.4: Agri- Policy Developments During April June, 2013

Commodity
Mar13
Apr13
1 Sugar
April 5, 2013
CCEA
May13
Jun13
The Regulated Release Mechanism
of sugar is dispensed with.
The requirement of sugar for PDS

will be procured by the states
through open market. Centre to
provide financial support to bridge
the gap between PDS price and
market price.
Remarks: The decision will help sugar mills make timely payment of cane price to farmers as their price
realisations will improve. PDS consumers will continue to get sugar at the existing rates.
2 Continuation of monthly allocation of May 16, 2013
CCEA
Approval of continuation of the same
food grains to Above Poverty Line
scale of allocation to APL families
(APL) during 201314
during 201314 under the Targeted
Public Distribution System (TPDS).
The Government of India has been
making allocation of food grains to
the APL families at subsidized rates
for 15 kg per family per month in 22
States/ UTs and at the rate of 35 kg
per family per month in 13
States/UTs under TPDS since June,
2011.
The offtake under PDS is expected to remain at the levels seen in 201213.
3 Fertilizer
May 1, 2013
CCEA
Approval to the proposals of the
Department of Fertilizers for fixation
of Nutrient Based Subsidy rates for
the year 201314.
Remarks: The implementation of new rates will result in reduction of subsidy by about 15%. The price of DAP
and MOP is expected to be reduced by a minimum of Rs.1500 and Rs.1000 per MT, respectively from the current
level which will provide relief to the farmers.
4 Tariff Value of Vegetable Oils
May 31, 2013
Central Board Tariff values of various imputed
of Excise
vegetable oils notified
and Customs
Remarks: Balancing objectives of protecting domestic oilseed production, refining industry and meeting
consumer demand by lower cost imports.
5 Dairy and Livestock products
June 11, 2013 DGFT
Requirements of Sanitary Import
Permit issued by Department of
Animal Husbandry, Dairying &
Fisheries, GoI have been
incorporated under relevant
Chapters of ITC(HS), 2012
The measure will streamline procedures relating to imports of dairy products.
6 MSP for kharif crops for
28th June
CCEA
Approval of the Minimum Support
201314 season
2013
Prices (MSPs) for kharif crops of
201314 season. The MSPs of Jowar
(Hybrid), Jowar (Maldandi), and Ragi
have been retained at last year`s
level of Rs. 1,500 per quintal, Rs.
1,520 per quintal and Rs. 1,500 per
quintal respectively. The MSP of
Urad has also been retained at last
year`s level of Rs 4,300 per quintal.
The increase is expected to boost the sowing of paddy, oilseeds like soybean, millets and pulses.
Note: Press releases of Press Information Bureau and various Government Websites.
35
References
Third Advance Estimate for 201213:
(http://eands.dacnet.nic.in/Advance_Estimate/3rdadv_est_English_5-5-13.pdf )
Second Advance Estimate for 201213:
(http://eands.dacnet.nic.in/Advance_Estimate/2nd-adv-est-2012-13-Eng.pdf )
IMD monsoon Forecast
(www.imd.gov.in/section/nhac/dynamic/press_eng_update.pdf )
36
PART IV
Commodity Outlook Assessment

IV.1 Rice
IV.1.1 Production trends
Sowing of kharif rice crop this year has received an impetus due to the timely onset of
south west monsoon and its rapid progress covering the entire country by mid-June, two
weeks ahead of the normal date. However, a well distributed rainfall over time and space
is a precondition for achieving another record production. A long break in the monsoon
activity during any of the critical growth stages could prove to be more harmful than a late
arrival of monsoon.
As noted earlier, many of the factors influencing kharif agricultural production, namely
rainfall, input availability, price and demand factors are favourable for rice production this
year. Some of the surplus rice growing states in the north are moving to diversify the
intensive rice/wheat rotation due to ecological concerns such as a declining water table and
soil degradation. Nevertheless, a significant shift away from rice cultivation is not
imminent in the absence of a more profitable crop rotation and due to the governments
continued emphasis on rice and wheat production for food security reasons.
Based on the IMD forecast of 98% of Normal rainfall this monsoon season, our statistical
analysis using trend variable, rainfall departure from normal and dummy variable (to
capture the large increase in production in 201112) gives a forecast of 94.2- 95.1 million
tonnes for kharif rice production. Rice production in the rabi season will depend upon
irrigation availability, particularly in the southern states. Estimated equations indicate
increase in output in 201314 over 201213. Using average production in recent years of
around 11.8 million tonnes for the 201314 rabi crop, total 201314 rice production is
forecast at 107 million tonnes.
Despite below normal rainfall during last kharif season and unfavourable growing
conditions during the rabi season in major rice growing states of south India, according to
governments Third Advance Estimate, rice production in 201213 was a near record
104.2 million tonnes, only marginally down from the record 201112 production of 105.3
million tonnes. Whereas 201213 kharif rice production equalled the previous years
record production of 92.75 million tonnes, rabi production declined by about 1 million
tonnes to 11.47 million tonnes, the lowest since 200506. The governments focussed
efforts to increase rice production in East India through various programs such as Bringing
Green Revolution to Eastern India and the National Food Security Mission seems to have
contributed to increased production of kharif rice. However, the declining trend in rabi
season rice production is a matter of concern. Most of the increase in rice production in
recent years is due to increase in yield.
Based on the IMD

forecast of 98% of
Normal rainfall this
monsoon season,
our statistical
analysis using trend
variable, rainfall
departure from
normal and dummy
variable (to capture
the large increase in
production in
201112) gives a
forecast of 94.2- 95.1
million tonnes for
kharif rice
production.
37
IV.1.2 Consumption growth higher

Despite near record rice production in MY 201213, open market rice prices have
remained firm. On year-on-year basis, rice wholesale prices since the beginning of
201213 marketing year have remained well above the 201112 (Figure IV.1.1), mainly
due to the government purchases at the MSP which was increased in MY 201213 by
more than 15 per cent over the previous year (Table IV.1.1).
Figure IV.1.1: Year on Year Increase in Rice Wholesale Price Index: % YOY
The rice MSP for MY

201314 has
increased by 4.8 per
cent. Operation of
PDS and open
market sale of grain
from the
government stocks
would remain a
strategy to keep
prices under check.
Despite higher prices, rice food use is estimated to have increased by around 3.5 percent
in MY 201213 to 93 million tonnes. To overcome the high rice prices in the open market,
the government has been distributing more rice from its stocks through the PDS,
contributing to consumption growth. Rice consumption in MY 201314 is forecast to
register a growth of around 2.5%.
The rice MSP for MY 201314 has increased by 4.8 per cent. Operation of PDS and open
market sale of grain from the government stocks would remain a strategy to keep prices
under check. On June 19, the government approved open market sale of 0.5 million tonnes
of rice from its stocks. The average monthly offtake of rice through the PDS including
various welfare programs in 201213 was around 2.7 million tonnes. The ordinance on
food security provides for distribution of grain at subsidised prices across the country. As
the program is implemented, offtake is expected to increase marginally to 2.8 million
tonnes per month3.
3. http://cacp.dacnet.nic.in/BufferStockingNorms.pdf
38
COMMODITY OUTLOOK ASSESSMENT
Table IV.1.1: Government operations in Rice

Marketing Year
Govt
MSP for
(OctSep)
Procurement
Paddy
Million tonnes
Rs. per tonne
Common
Grade A
PDS
Offtake
Million
Tonnes**
PDS Issue Price for

Milled Rice
Rs. Per tonne
APL Grade A
BPL
Govt.
Food
Subsidy
Billion
Rs.
AAY
200203
16.4 (22.8)
5,500
5,800
26.1
8,300
5,650
3,000
241.8
200304
22.9 (25.8)
5,500
5,800
25.1
8,300
5,650
3,000
251.8
200405
24.7 (29.7)
5,600
5,900
20.8
8,300
5,650
3,000
258.0
200506
27.6 (30.1)
5,700
6,000
24.0
8,300
5,650
3,000
230.8
200607
25.1 (26.9)
6,200
6,500
24.8
8,300
5,650
3,000
240.1
200708
28.7 (29.7)
7,450
7,750
25.2
8,300
5,650
3,000
313.3
200809
34.1 (34.4)
9,000
9,300
24.7
8,300
5,650
3,000
437.5
200910
31.4 (35.2)
10,000
10,300
27.6
8,300
5,650
3,000
584.4
201011
34.2 (35.6)
10,000
10,300
30.0
8,300
5,650
3,000
638.4
201112
35.0 (33.3)
10,800
11,100
32.1
8,300
5,650
3,000
728.2
201213
*36.0 (34.5)
12,500
12,800
32.6
8,300
5,650
3,000
850.0
*Estimated ** Fiscal year basis
IV.1.3 Exports outlook less optimistic

Indias rice exports in MY 201112 were a record 10 million tonnes, thus emerging as the
worlds topmost rice exporter surpassing Thailand. A significant drop in rice exports from
Thailand due to domestic policy initiative to support domestic prices through a rice
mortgage program combined with a gradual depreciation of India rupee against U.S. dollar
helped Indian exports. Exports to Iran have also bounced back, thanks to shippers being
paid up front in rupees from a huge pool of oil money owed to Iran by India.
On a fiscal year basis, Indias rice exports in 201213 were 10 million tonnes, compared
with 7.1 million tonnes in 201112. 201213 exports (with 201112 exports in
parentheses) included 3.46 (3.18) million tonnes of basmati rice; 4.04 (2.78) million
tonnes of parboiled rice; 1.39 (0.69) million tonnes of other milled rice; 0.87 (0.42) million
tonnes of broken rice; 1.0 (0.17) million tonnes of brown rice, and small quantities of
paddy rice. While Iran, Saudi Arabia, Iraq, and Kuwait were major buyers of basmati rice,
parboiled rice exports were mostly destined to Nigeria, and other African countries.
Broken rice exports were mostly to African countries, whereas other (non-basmati, nonparboiled) exports were mostly to UAE, Nepal, and Benin (Figures IV.1.2- IV.1.5).
201213 exports
(with 201112
exports in
parentheses)
included 3.46 (3.18)
million tonnes of
basmati rice; 4.04
(2.78) million tonnes
of parboiled rice;
1.39 (0.69) million
tonnes of other
milled rice; 0.87
of broken rice; 1.0
of brown rice, and
small quantities of
paddy rice.
39
Figure IV.1.2: Basmati Rice Exports
Figure IV.1.3: Parboiled Rice Exports
40
Figure IV.1.4: Other Rice Exports
Figure IV.1.5: Broken Rice Exports
It looks unlikely that India will be able to maintain its export tempo in 2013 and 2014 due
to both domestic and international developments. Due to decline in rice production in
201213 and higher production cost, Indian rice exports have become less competitive in
the international market in 2013. A further increase in the MSP makes Indian rice even
less competitive. Furthermore, larger global rice production in 201213 and record rice
stocks in Thailand which will sooner or later find its way into the export market, could
depress international prices, making Indian rice exports more difficult.
It looks unlikely that

India will be able to
maintain its export
tempo in 2013 and
2014 due to both
domestic and
international
developments.
There are reports that in response to rising political opposition, the Thai government has
recently announced a 20% cut to the intervention price for white paddy rice to 12,000 baht
(about $390) per ton from 15,000 baht (about $490) per ton effective June 30 September
15. Rice exports from other exporting countries such as Pakistan and Vietnam have
41
become more competitive in recent months (Figure IV.1.6). Furthermore, domestic

production in some of the major markets for Indian rice such as Nigerias expected to be
higher in MY 201314. One positive development has been significant weakening of
Indian rupee against US$, which nevertheless, has added another layer of uncertainty in
export trade. As a result, Indian rice exports in MY201213 (CY 2013) and MY 201314
(CY 2014) are forecast to decline by at least 20% to 8 million tonnes, almost equally
divided between basmati and non-basmati rice.
Figure IV.1.6: Rice Export Price India vis-a-vis International
Government rice
stocks on October 1,
2012, were 23.4
million tonnes, 3
million tonnes more
than a year ago level
and over three times
the governments
desired October 1
minimum buffer
stock plus security
reserve level of 7.2
million tonnes. With
continued high rice
procurement from
the 201213 crop,
stocks increased to
33.3 million tonnes
on June 1, 2013,
compared with 32.1
million tonnes a year
ago. MY 201213 is
likely to end with
carryover stocks of
around 24 million
tonnes.
42
Source: FAO
IV.1.4 Stocks
Government rice stocks on October 1, 2012, were 23.4 million tonnes, 3 million tonnes
more than a year ago level and over three times the governments desired October 1
minimum buffer stock plus security reserve level of 7.2 million tonnes. With continued
high rice procurement from the 201213 crop, stocks increased to 33.3 million tonnes on
June 1, 2013, compared with 32.1 million tonnes a year ago (Figure IV.1.7). MY 201213
is likely to end with carryover stocks of around 24 million tonnes.
Figure IV.1.7: Government rice stocks actual vs.buffer Norm (million tonnes)
Table IV.1.2: Supply and Demand Balance for Rice (1000 Tonnes)
Rice
201011
201112
OctSep
OctSep
201213E
OctSep
201314F
OctSep
Production
95,980
105,310
104,220
107,000
Beginning Stocks
18,444
20,360
23,370
24,000
Imports
Total Supply
Exports
Food Use
Seed, Feed, Waste, Other
Total Use
114,424
125,670
127,590
131,000
2,774
10,400
8,000
8,000
89,090
89,920
93,090
95,400
2,200
2,000
2,500
2,600
91,290
91,900
95,590
98,000
Ending Stocks
20,360
23,370
24,000
25,000
Total Distribution
114,424
125,670
127,590
131,000
22
25
25
26
18,444
20,360
23,370
24,000
Procurement
34,196
35,000
36,000
37,000
Total Availability
52,640
55,360
59,370
61,000
PDS Offatke
32,280
31,990
35,370
36,000
Stocks to Use Ratio %

Government Rice Operation
Beginning Stocks
Imports
Exports
Ending Stocks
20,360
23,370
24,000
25,000
Total Distribution
52,640
55,360
59,370
61,000
Note: Stocks are only government stocks. Total use is the residual and includes private stocks change. We assume no significant change in PDS
offtake due to food security ordinance in the current year.
43
IV. 2 Wheat
IV.2.1 Production estimates for 201213
Wheat utilisation
including food, feed,
seed, and waste in
MY 201314 is
forecast to increase
above trend line due
to larger stocks with
private trade this
year.
The governments 3rd Advance Estimate raised the MY 201314 wheat production to
93.62 million tonnes from the 2nd Advance Estimate of 92.3 million tonnes, only
marginally down from the 201213 record production of 94.88 million tonnes. However,
a significant (13 million tonne) decline in government wheat procurement from the
previous years record level to 25 million tonnes has brought into question the strong
relationship between procurement and production observed in the past. The explanations
for this disruption in the long held relationship include (1) that private trade and flour
millers have become more active and bought more wheat this year than usual because of
the subdued prices during the post-harvest season and (2) relatively modest increase of 5
per cent in MSP for wheat in the current rabi season. The drop in prices in the postharvest period may have led to holding back output by farmers from the market. Untimely
rains in northwest India combined with fluctuations in temperature and an increased
incidence of wheat diseases may have caused decline in wheat yield, this was to some
extent offset by higher production in the other states.
However, without adequate storage capacity, private traders and flour mills are unlikely to
invest in buying suddenly significantly larger quantities of grain. The same constraint is
also likely to affect the ability of the farmers to hold back significant quantities of grain
from the market. The sharp decline in procurement in UP also is not fully explained by
channelling production to the private sector.
In recent years, procurement by the government has averaged around 30% of production
of wheat. Although requirements of private trade are not necessarily proportional to
production, this ratio was observed even in 201112 when wheat production reached a
peak. With a likely procurement of 25.5 million tonnes this year, on the basis of norm of
30 per cent production should have been around 85 million tonnes. Making a provision of
5 million tonnes for larger private trade purchase over their normal purchases, production
works out to be 90 million tonnes at the most. On this basis, wheat production in 201213
appears to be in the range of 90-93 million tonnes.
IV.2.2 Consumption to pick up

Wheat utilisation including food, feed, seed, and waste in MY 201314 is forecast to
increase above trend line due to larger stocks with private trade this year inferred from the
discussion above which would have to be disposed off in the domestic market given the
easy global supplies and recent government decision to make lager open market sales in
coming months to contain price rise. Government wheat procurement after scaling a
record level of 38.2 million tonnes in MY 201213 has declined sharply to around 25.1
million tonnes in MY 201314, leaving larger quantities of wheat in the open market. All
wheat growing states recorded a decline in wheat procurement this year, with shaper
declines in Uttar Pradesh and Haryana. (Figure IV.2.1).
The monthly offtake of wheat from government stocks for PDS, open market sale, and
other welfare programs (excluding exports) averaged 2.5 million tonnes per month in
201213.Even with the implementation of the NFSO in its present form, offtake is
expected to remain more or less at the same level in the current year.
44
Figure IV.2.1: Trend in Wheat Procurement by State
200910
201011
201112
201213
201314 #
Punjab
Haryana
10.73
10.03
10.96
12.83
10.89
6.72
6.37
6.93
8.67
5.87
Madhya
Pradesh
1.97
3.54
4.96
8.49
6.36
Uttar
Pradesh
3.88
1.65
3.46
5.06
0.68
Rajasthan
Other
Total
1.15
0.48
1.30
1.96
1.25
0.93
0.45
0.72
1.13
0.05
25.38
22.51
28.34
38.15
25.10
# As on June 5, 2013
IV.2.3 Wheat price inflation decelerates but still high

Despite back-to-back record or near record wheat production and excessive grain stocks
with the government, domestic wheat prices in 2012 have progressively increased (Figure
IV.2.2) due to tight open-market wheat supplies combined with strong export demand.
After peaking at 23.3% in November 2012, year-on-year wheat price inflation measured
by wholesale price index has weakened reaching 12.7% in May 2013. However, prices have
again started strengthening. The upward pressure is likely to continue unless government
releases large quantities of wheat from its stocks to contain the price rise. Adequate
purchases by the private trade should also have a moderating impact on prices. The
decision of the Cabinet Committee on Economic Affairs on June 20th to release 10.5
million tonnes of grain of which wheat accounts for 10 million tonnes to the open market
is aimed at containing prices.
The decision of the

Cabinet Committee
on Economic Affairs
on June 20th to
release 10.5 million
tonnes of grain of
which wheat
accounts for 10
million tonnes to the
open market is
aimed at containing
prices.
45
Figure IV.2.2: Wheat Price Inflation: WPI(%YOY)
IV.2.4 Export outlook less promising

Indian wheat exports
are likely to face
increased
competition during
MY 201314 because
of improved global
wheat production
situation and lower
prices.
46
Wheat exports in MY 201213 (AprMar) are officially placed at 6.8 million tonnes
including 300,000 tonnes of wheat flour (wheat equivalent), compared with 900,000
metric tonnes in MY 201112 (including 140,000 tonnes of wheat flour on wheat
equivalent basis). Major export destinations were Bangladesh, Korea RP, Yemen, UAE,
Djibouti, and Ethiopia (Figure IV.2.3). Wheat flour exports were mainly to UAE, Oman,
and Indonesia. Of the total quantity of 6.5 million tonnes of wheat exported in MY
201213, about 3.1 million tonnes were from government stocks and 3.4 million tonnes
on private account. Almost the entire quantity of wheat exported in 201112 was on
private account.
Indian wheat exports are likely to face increased competition during MY 201314 because
of improved global wheat production situation and lower prices. Due to tight openmarket wheat supplies and higher prices, private exports of wheat have declined
significantly since November 2012. Most of the recent wheat exports have been from
government-held stocks. Unless the government continues to release large quantity of
wheat from its stocks for exports and revises minimum wheat export prices downward,
significant increase in wheat exports seems unlikely during 201314.
However,
considering the significant decline in government wheat procurement this year and
concerns about meeting the requirements when the NFSO is implemented, it is unlikely
that the government will release large quantities of wheat for exports. Currently we
forecast MY 201314 wheat exports at 4 million tonnes.
Figure IV.2.3: Wheat Exports by Major Destination
With exports permitted, Indian wheat prices have been closely tracking international
prices and remained competitive until December 2012. However, with global wheat prices
weakening in recent months, Indian wheat has lost its competitive edge in the world
market (Figure IV.2.4). The recent significant depreciation of Indian rupee against US $
should provide some competitiveness to Indian exports in coming months. Currently we
forecast MY 201314 wheat exports at 5 million tonnes.
Figure IV.2.4: Indian Wholesale Wheat Price vis--vis US SRW Wheat Price FOB
Source: US Price World Bank; Indian Price: Department of Consumer Affairs

Note: US SRW has typically sells at a premium over Indian wheat. Indian FOB price will be higher than the indicated Delhi wholesale price by around
$40 per tonne on account of transportation cost and other handling charges.
IV.2.5 Stocks fail to scale new high

Following a steep decline in government wheat procurement this marketing year,
government wheat stock on June 1, 2013 at 44.4 million tonnes, fell short of the previous
47
Stocks are likely to

decline to around 19
end of the 201314
marketing year on
April 1, 2014 from
24.2 million tonnes
on April 1, 2013.
peak stock of 50.2 million tonnes on June 1, 2012, thus relieving some pressure on
government storage facilities. Total food grain stocks with the government on June 1, 2013
were 77.7 million tonnes against 82.4 million tonnes a year ago. Stocks are likely to
decline to around 19 million tonnes by the end of the 201314 marketing year on April 1,
2014 from 24.2 million tonnes on April 1, 2013. The supply demand balances for wheat
are summarised in Table IV.2.1.
Figure IV.2.5: Government Wheat Stocks-Actual Vs Buffer Norms (million tonnes)
Table IV.2.1: Supply and Demand Balance for Wheat (1000metric tonnes) marketing year
Rice
201011
201112
201213E
AprMar
AprMar
AprMar
Production
80,800
86,870
94,880
Beginning Stocks
16,125
15,364
19,952
Imports
188
2
0
Total Supply
97,113
102,236
114,832
Exports
Food Use
Seed, Feed, Waste, Other
Total Use
Ending Stocks
Total Distribution
Stocks to Use Ratio %
Govt Wheat Operation
Beginning Stocks
Imports
Procurement
Total Availability
PDS & other Offtake
Exports
Un accounted
Total Distribution
Ending Stocks
68
74,920
6,761
81,681
15,364
97,195
872
76,200
5,212
81,412
19,952
102,236
6,800
78,332
5,500
83,832
24,200
114,832
5,000
84,200
6,000
90,200
19,000
114,200
19
25
29
21
16,125
0
22,347
38,472
23,072
0
36
23,108
15,364
15,364
0
28,335
43,699
24,162
100
-515
23,747
19,952
19,952
0
38,148
58,100
30,140
3,100
660
33,100
24,200
24,200
0
25,500
49,700
29,700
1,000
0
30,700
19,000
E-Estimate; F - Forecast
Note: Stocks are government stocks. Total use is residual and would include private stocks change.
*- We have assumed lower limit of the range for production of wheat in 201213 which would be utilised in 201314.
Source: Food Corporation of India, Directorate of Economics and Statistics, NCAER Estimate
48
201314F
AprMar*
90,000
24,200
0
114,200
IV.3 Coarse Grains

IV.3.1 Production
Erratic monsoon rains in major coarse growing states of Rajasthan, Gujarat, Maharashtra,
and Karnataka last year resulted in a significant decline in 201213 kharif coarse grain
production, which was partly offset by higher production in the rabi season. Governments
Third Advance Estimate places 201213 total coarse grain production at 39.5 million tonnes
compared to 42.0 million tonnes in 201112, with most of the decline confined to kharif
season production estimated at 29.5 million tonnes. The 201213 coarse grain production
by type with the 201112 production in parentheses in million tonnes is: maize - 21.8 (21.8);
bajra - 8.7 (10.3); jowar - 5.3 (6.0); ragi - 1.61 (1.93); and small millet - 0.43 (0.45).
Assuming normal monsoon this year as forecast by the IMD, kharif coarse grain
production is forecast at 30-33 million tonnes (16.6-16.8 million tonnes maize, 9-9.7
million tonnes bajra, 2.6-2.7 million tonnes jowar, and 2.2-3.8 million tonnes of ragi and
small millet). Figure IV.3.1 shows the production trend of various coarse grains and
forecast for 201314 assuming normal rabi crops.
Figure IV.3.1: Coarse Grain Production Trend
200607
200809
200910
201011
201112
201213
201314F
19
19.7
16.7
21.7
21.8
21.8
22.5
8.4
10
8.9
6.5
10.4
10.3
8.7
9.7
7.2
7.9
7.3
6.7
5.3
5.5
Millet
1.9
2.7
2.4
2.3
2.6
2.3
2.2
Barley
1.3
1.2
1.7
1.4
1.7
1.6
1.7
1.7
33.9
40.8
40
33.6
43.4
42
39.5
41.6
Maize
15.1
Bajra
Jawar
Total
200708
Note: Estimates are for the year as a whole (kharif plus rabi).
Indias coarse grain crops, dominated by maize and bajra, are mainly grown under rain-fed
conditions that leads to significant year-to-year production variations depending on
rainfall received during the monsoon season With the exception of some jowar, maize, and
barley, a major share of coarse grain crops, 77 per cent, is produced in the kharif season.
Assuming normal
monsoon this year as
forecast by the IMD,
kharif coarse grain
production is
forecast at 30-33
million tonnes (16.616.8 million tonnes
maize, 9-9.7 million
tonnes bajra, 2.6-2.7
million tonnes jowar,
and 2.2-3.8 million
tonnes of ragi and
small millet).
With the exception of

some jowar, maize,
and barley, a major
share of coarse grain
crops, 77 per cent, is
produced in the
kharif season.
49
IV.3.2 Consumption, Trade and Price

The major use of coarse grains remains as food. In the case of maize, however, more than
50 per cent of total production is used as livestock feed primarily for poultry. Another 1.2
to 1.5 million tonnes of maize is used by the starch industry.
High maize and soybean prices (major feed ingredients) in recent years resulted in high
prices for livestock feed contributing to high prices of milk and meat products.
Industrial use of maize is also increasing. However, the slowdown in the global economy
may reduce the demand for starch (produced using maize), mainly used by the textile
industry.
A lower production during the kharif season, a significant increase in the support price for
maize and large exports spurred by lower global production and high international prices
kept maize and other coarse grain prices high in 201213. The average maize price at the
indicative Nizamabad market currently is around Rs. 14,000 per tonne compared to Rs.
10,600 a year ago.
Figure IV.3.2: Maize Price Comparison US vs India (US$/tonne)
Maize exports in MY
201213 were
around 4.8 million
tonnes compared
with 4.6 million
tonnes in MY
201112.
50
Maize exports in MY 201213 were around 4.8 million tonnes compared with 4.6 million
tonnes in MY 201112. Exports are likely to decline in MY 201314 due to lower
international prices and high domestic prices. However, the continuing depreciation of
Indian rupee against U.S. $ and the geographic proximity to Asian markets should prove
beneficial for Indian exports. Currently we forecast MY 201314 exports at 4.0 million
tonnes. On a fiscal year basis, maize exports in 201213 totalled 4.8 million tonnes
compared with 3.86 million tonnes in 201112. Exports by destination are shown in
Figure IV.3.3.
Figure IV.3.3: India Maize Exports by Destination
Table IV.3.1: Demand Supply Balance Sheet for Maize (000 tonnes)
(OctSep)
201011
201112
Opening stocks
Production
Imports
Domestic Availability
Exports
Domestic Utilisation
Closing Stocks
201213
201314 F
200
600
600
550
21,730
21,760
21,820
22,500
19
10
21,949
22,363
21,670
23,055
3,526
4,600
4,800
4,000
17,823
17,763
18,120
18,395
600
600
550
660
The latest official

estimates (Third AE)
now place 201213
pulse production at a
near record 18
million tonnes
compared with 17.1
million tonnes in
201112.
IV.4 Pulses
The latest official estimates (Third AE) now place 201213 pulse production at a near
record 18 million tonnes compared with 17.1 million tonnes in 201112. Rabi pulses
production set a new record at 12 million tonnes while kharif pulses declined marginally
to 6 million tonnes due to poor monsoon rains last year. Disaggregate data show gram
production reached a new high of 8.5 million tonnes in 201213, up from the previous
years 7.70 million tonnes. (Figure IV.4.1).
51
Figure IV.4.1: Production Trend of Pulses
There has been a significant growth in production some of the pulses since 2001: gram by
6.48% per year; tur 1.50%, total kharif pulses 2.95 %; total rabi pulses 4.78 %; and total
pulses is 4.02%. The production trends in kharif and rabi pulses are presented in Figure
IV.4.2.
Pulses grown both during the kharif and rabi seasons include gram , tur, moong, urd, masur
and mutter. The sharp increase in both the MSP and wholesale prices of pulses in the recent
years has been an incentive to increase production. Policy initiatives such as Integrated
Scheme of Oilseeds, Pulses, Oil Palm and Maize (ISOPAM) and National Food Security
Mission (NFSM) have also contributed to higher pulse production in recent years.
Introduction of gram crop into non-traditional areas like south Indian states is an example
of technological and institutional breakthrough. Although MSPs have been increased for
pulses, effective marketing support is lacking constraint.
Figure IV.4.2: Kharif, Rabi and Total pulses production trend
52
Madhya Pradesh leads in pulses production in the country with a share of 26%, followed
by Maharashtra (15%), Rajasthan (13%), Uttar Pradesh (13%), Andhra Pradesh (9%), and
Karnataka (8%) during TE 2011/12 , which together account for about 83% of the total
pulse production.
Pulses are mostly rainfed crops hence dependent on the monsoon rains. The early arrival
of the monsoon this year in most parts of the country has resulted in increased pulse
planting during the kharif season. Based on forecast of normal monsoon and trend
analysis, 201314 kharif pulse production is forecast at 6.0-6.1 million tonnes. Assuming
normal rabi pulse production total 201314 pulse production is forecast at 18.1 million
tonnes.
IV.4.2 Consumption
Per capita pulse consumption showed a generally downward trend upto 2001and has then
remained stable despite increasing consumer income as the price effect on demand has
apparently outstripped the income effect. Limited availability of pulses in the global
market has also limited their consumption. Per capita net pulse availability has declined
from around 60 grams per day in the 1950s to 40 grams in the 1980s and further to around
35 grams per day in 2000s. But in the past four years, there has been a marginal increase
in consumption averaging around 38 grams due to higher production and larger imports,
mostly of dry peas from Canada and Australia (Figure IV.4.3).
Figure IV.4.3: Per capita net availability of pulses
IV.4.3 Price Trends
Based on forecast of
normal monsoon
and trend analysis,
201314 kharif pulse
production is
forecast at 6.0-6.1
million tonnes.
Assuming normal
rabi pulse
production total
201314 pulse
production is
forecast at 18.1
million tonnes.
Since September
2012, the pace of
pulse price inflation
has shown a
declining trend
dropping to 5.9 per
cent in May 2013.
The pulses Wholesale Price Index rose sharply during January to August 2012, the rate of
increase peaking at over 35 per cent in August (Figure IV.4.4) due to a decline in 2012 rabi
pulse production, unfavourable outlook for a poor 201213 kharif pulse production due to
erratic monsoon rains, combined with a significant increase in the MSP, which signals the
base for wholesale prices. Most of the price increase was in gram. However, since
September 2012, the pace of pulse price inflation has shown a declining trend dropping to
5.9 per cent in May 2013.
53
Figure IV.4.4: Price Trends in Total Pulses, Gram and Arhar: WPI % Change YOY
Figure IV.4.5: Price Trends in Moong, Lentil and Urd: WPI % Change YOY, 2013 over 2012
Chana (gram) prices tend to follow a seasonal pattern, with prices tending to decline
during the harvest period, bottoming out when arrivals reach its peak in May. Recovery in
prices is to be expected from June onwards with the announcement of MSP for kharif
crops and the demand from stockists for trade during the year.
54
Figure IV.4.6: Gram Prices in Different Markets
IV.4.4 Trade
Total imports of pulses during 201213 were 4.01 million tonnes, which included 1.37
million tonnes of dry peas and dun peas (mutter), 506,000 tonnes of pigeon pea (tur),
642,000 tonnes of moong, 698,000 tonnes of chick peas, 506,000 tonnes of lentil (masur),
84,000 tonnes of kidney beans (rajma), 180,000 tonnes of other beans and 24,000 tonnes
of other pulses. Imports of pulses by type and major suppliers are given in Table IV.4.1.
Because of a higher rabi season pulse production this year, imports are likely to decline
marginally in 201314.
Total imports of
pulses during
201213 were 4.01
million tonnes,
which included 1.37
million tonnes of dry
peas and dun peas
(mutter), 506,000
tonnes of pigeon pea
(tur), 642,000
tonnes of moong,
698,000 tonnes of
chick peas, 506,000
tonnes of lentil
(masur), 84,000
tonnes of kidney
beans (rajma),
180,000 tonnes of
other beans and
24,000 tonnes of
other pulses.
55
Table IV.4.1: Imports of Pulses by Type and Major Suppliers

Commodity/ Country
Values in Rs. Lakh
201112
201213
Quantity (000 tons)

201112
201213
Dry peas
Canada
Russia
268480
173013
1339
707
51123
50082
250
214
Australia
24946
30660
128
119
USA
20025
33365
92
119
France
20137
27139
92
118
Ukraine
14125
10774
68
47
413668
338120
2039
1371
Total
Tur
Myanmar
82893
99890
263
274
Tanzania rep
15088
25392
50
74
Malawi
7625
17848
29
56
13937
16769
50
53
China
7594
4413
24
13
USA
1965
1041
143940
176815
471
506
Myanmar
131504
176704
318
479
Australia
10839
21538
20
43
China
11418
7890
26
17
Tanzania Rep
4658
6531
12
16
Uzbekistan
1053
5941
12
916
5226
12
180487
252383
430
642
42527
180638
129
465
2598
38007
96
Mozambique
Total
Moong Beans
Indonesia
Total
Chickpea
Australia
Russia
Tanzania rep
Myanmar
USA
Mexico
Total
4121
15766
11
36
13868
13082
29
33
2742
6883
12
408
7016
10
77226
280295
206
698
Lentil
Canada
28229
118619
94
374
Australia
1237
21156
65
USA
3252
14198
45
705
1578
Myanmar
153
1194
Taiwan
302
359
36575
161046
118
506
China
Total
56
Table IV.4.1: Imports of Pulses by Type and Major Suppliers (contd...)

Commodity/ Country
Values in Rs. Lakh
201112
201213
Quantity (000 tons)

201112
201213
Kidney Beans
China p rp
17542
37242
38
53
Myanmar
3665
5748
11
Ethiopia
2684
4494
10
USA
559
747
Germany
392
642
59
469
27375
53071
63
84
Canada
Total
Other Beans
Myanmar
34058
25231
86
73
Brazil
2608
10495
25
Madagascar
2926
4424
11
Tanzania Rep
887
3530
10
France
209
2215
10
88
2877
51711
61093
131
180
Afghanistan
Total
Other Dried Legumes
Myanmar
11719
7054
31
21
China
720
620
USA
125
196
43
112
Mexico
44
Denmark
45
13824
8294
37
24
944806
1331117
3496
4012
Canada
Total
TOTAL
The government had extended the ban on export of pulses by one more year, but allowed
outbound shipments of kabuli chana, organic pulses and lentils with some
riders.Prohibition on export of pulses has been extended by one more year from March
31, 2013 to March 31, 2014. But, there are two exceptions to this. One is the export of
kabuli chana. Second is the export of organic pulses and lentils; but with a ceiling of 10,000
metric tonnes (MTs) per annum..., Export of pulses was initially prohibited for a period
of six months in 2006 which was extended from time-to-time. Export of kabuli chana has
increased by more than 218 per cent - from 61,300 tonnes in 200607 to 194,913 tonnes
in 201213. The supply- demand balance sheet for pulses is provided in Table IV.4.2.
Table IV.4.2: Demand and Supply Balance Sheet for Pulses (000 tonnes)
Total pulses
201011
201112
201213
201314
Production
18,000
18,200
Imports
Total supply
Total Export
18,240
17,090
2,780
3,500
4,012
3,800
21,020
20,590
22,012
22,000
209
175
203
200
Domestic Use
20,811
20,415
21,809
21,800
Total utilization
21,020
20,590
22,012
22,000
15.2
20.5
22.3
21.0
% imports to production
The government had

extended the ban on
export of pulses by
one more year, but
allowed outbound
shipments of kabuli
chana, organic
pulses and lentils
with some riders.
57
IV.5 Edible Oilseeds and Oils

The third advance estimates for 201213 place production of total nine oilseed crops at
30.72 million tonnes, marginally higher from previous years production.
Rapeseed/mustard, the main rabi oilseed, is currently estimated at 7.44 million tonnes
compared with 6.60 million tonnes in 201112. The largest rapeseed and mustard
production was 8.2 million tonnes in 201011. Weather conditions were favourable for
rabi oilseed production until the late rains in April which adversely affected mustard crop.
Kharif oilseed production has expanded faster in recent years as compared to the rabi
oilseed production (Figure IV.5.1). Soybean is the main driver of kharif oilseed production
with the estimated production of 14.1 million tons in 201213. The other major oilseed
crop, groundnut, is grown in both the seasons and estimated to yield 5.4 million tonnes in
201213.
Figure IV.5.1: All India Season-wise Area, Production and Yield of Nine Oilseeds
During the decade

20002001 to
201112 there has
been acceleration in
area under soybean,
rapeseed-mustard
and sesame and
castor, while area
stagnated/
decelerated in the
case of groundnut,
safflower,
sunflower, linseed
and niger seed.
58
Oilseed area and output are concentrated in the central and southern parts of India, mainly
in the states of Madhya Pradesh, Gujarat, Rajasthan, Andhra Pradesh and Karnataka.
Among different oilseeds, groundnut, rapeseed mustard and soybean account for about 81
per cent of area and 96 per cent of production of oilseeds in the country (TE 201112).
During the decade 20002001 to 201112 there has been acceleration in area under
soybean, rapeseed-mustard and sesame and castor, while area stagnated/ decelerated in the
case of groundnut, safflower, sunflower, linseed and niger seed (Figure IV.5.2). Safflower,
sunflower, linseed and nigerseed indicate clear signals of deceleration in area and also
production.
Figure IV.5.2: Area, Production and Yield Growth Rates of Nine Oilseeds
There is a high degree of variation in annual production of oilseeds owing to their

cultivation predominantly under low and uncertain rainfall situations. The productivity of
all oilseeds crops is much lower than world average except castor. Only 28% of area under
oilseeds is irrigated that too for rabi.
There is large regional variation in the pattern of changes in area, production and
productivity of oilseeds. Haryana, Madhya Pradesh, Maharashtra, Rajasthan and West
Bengal increased their oilseeds production both through area expansion and productivity
improvement. Gujarat increased oilseeds production mainly through productivity
improvement. In Punjab, oilseeds production declined mainly due to decline in area.
Total edible oil production from the cultivated oilseeds and other sources such as cottonseed,
coconut and solvent extracted oils in 201213 is estimated by trade sources at 7.7 million
tonnes4, marginally higher than in 201112. Edible oil production for the year 201213
includes about 2.3 million tonnes of rapeseed oil, 1.8 million tonnes of soybean oil, 300,000
tonnes of groundnut oil, 200,000 tonnes of sunflower seed oil, 1.1 million tonnes of cotton
seed oil, 400,000 tonnes of coconut oil, and 900,000 tonnes of rice bran oil.
For the current marketing season 201314 total edible oil production is expected be 7.6
million tonnes. Rapeseed oil, mustard oil as well as soybean and groundnut oil, will account
for most of this increase. Edible oil production for current marketing year is estimated at
7.2 million tonnes, which includes 2.5 million tons of rapeseed oil, 1.7 million tons of
soybean oil, 1.2 million tons of groundnut oil, 1.1 million tons of cottonseed oil, and
690,000 tons of coconut, palm and sunflower oils.
The GOI plans to launch a national mission on oil seeds and oil palm under the XIIth
five-year plan. This effort will incorporate the existing integrated scheme for oilseeds,
pulses, oil palm and maize, the central sector scheme on tree-borne Oilseeds and Oil Palm
Area Expansion (OPAE). This program is expected to bring 49,682 hectares (33,182
hectares from FY 2011/12 and an additional 16,500 hectares in FY 2012/13) under oil
palm cultivation. Andhra Pradesh is leading the expansion drive, followed by Tamil Nadu,
Karnataka, Odisha, Gujarat, Mizoram, Maharashtra and Chhattisgarh.
Haryana, Madhya
Pradesh,
Maharashtra,
Rajasthan and West
Bengal increased
their oilseeds
production both
through area
expansion and
productivity
improvement.
Gujarat increased
oilseeds production
mainly through
productivity
improvement. In
Punjab, oilseeds
production declined
mainly due to decline
in area.
For the current

marketing season
201314 total edible
oil production is
expected be 7.6
million tonnes.
4. http://www.seaofindia.com/images/67/PR%20051%20dt_18th%20March,%202013-%20Press%
20Release%20-%20COOIT%27s%20Trade%20Estimate.pdf
59
IV.5.2 Consumption and Price
Edible vegetable oil

production and
consumption are
expected to increase
to 7.6 million tonnes
and 18.6 million
tonnes, respectively.
Edible vegetable oil production and consumption are expected to increase to 7.6 million
tonnes and 18.6 million tonnes, respectively. During the period from 20012012, edible oil
production grew at the rate of 3.97% per year and consumption increased at a 4.77 % per
year. With the growing population, changing demographic pattern and rising per capita
income per capita consumption of edible oils is also projected to increase over the medium
term (Figure IV.5.3). Indias per capita edible oil consumption at 14.1 kg for 2012/13 still
remains far below the world average per capita consumption of 21.6 kg.
Figure IV.5.3: Edible oil Production and Consumption
The WPI of oilseeds rose at a relatively high rate in 2012 peaking at around 31 per cent
in November before declining substantially in March 2013 continuing the declining trend
upto May. However, vegetable oil price increase remained at around 10 per cent during
most of 2012 and declined to 0.8 percent in May. This decline is mainly due to significant
increase of rapeseed and mustard oil production, palm oil supplies and lower international
prices particularly palm oil (Figures IV.5.4 and IV.5.5). Oilseed and vegetable oil price
increase is likely to moderate in the next 2-3 months due to large rapeseed crop and
softening international prices.
60
Figure IV.5.4: Oilseed and Vegetable Oil Price Inflation (YoY % Change)
Figure IV.5.5: Whole price index of Rapeseed and Mustard, Palm oil and International Price of Palm Oil
(YOY % Change)
Note: palm oli*= International price of palm oil ( Malaysian Futures, US$/metric tonnes)
IV.5.3 Trade
India is the worlds largest importer of edible vegetable oil, followed by China and the EU27. As per capita consumption of edible oils has risen significantly, domestic demand has
also increased and the rising gap between domestic production and consumption is filled by
imports. Import of edible oil was 9.98 million tonnes in 201112 (Figure IV.5.6).
According to Solvent Extractors Association of India, India has imported 641,327 tonnes
of edible oil during April 2013 compared to 897,404 tons in April 2012. However, overall
import of edible oils during Nov.12 to Apr.13 is reported at 5,138,763 tons compared to
4,603,143 during Nov.11 to Apr.12 i.e. up by 11.64%. Among imports, palm oil remained
the biggest item of import. Soybean oil is the second most important item of import. RBD
India is the worlds

largest importer of
edible vegetable oil,
followed by China
and the EU-27.
61
palm olein and sunflower oil are also emerging as the important items. During this period
share of crude palm oil in total imports is 65.28 % whereas refined oil (RBD palm olein) is
17 % and rest 18 % is contributed by soybean, sunflower and other oils.
Vegetable oil
imports (crude) were
allowed duty free,
whereas refined
vegetable oil imports
attract 7.5 per cent
import duty.
However, a 2.5 per
cent duty has now
been imposed on
imports of crude
edible oils since
January 2013.
Vegetable oil imports (crude) were allowed duty free, whereas refined vegetable oil imports
attract 7.5 per cent import duty. However, a 2.5 per cent duty has now been imposed on
imports of crude edible oils since January 2013. The Cabinet Committee on Economic
Affairs also approved a plan to defreeze the tariff values of all edible oils and notify their
tariff values on a regular basis based on their prevailing international prices. The measure
will benefit the domestic refining industry oilseed producers. The prevailing tariff values
of various vegetable oils per tonne are: crude palm oil - $838; RBD palm oil - $870; other
palm oil - $854; crude palm olein - $871; RBD palm olein - $874; other palm olein - $873;
crude soybean oil - $1147.
Figure IV.5.6: Total Imports of Edible Oils
Source: http://www.seaofindia.com
Figure IV.5.7: Share of different oils in Total Imports
62
Among the exports of oilseed sector oil meal exports have increased from 3.32 million tons in
2003 to 4.85 million tons in 201213. Castor oil is the second most important item of export
in oilseed sector registering significant increase during the period from 20067 to 201213.
During the period August 2012 to March 31, 2013, the GOI allowed oilmeal imports at
zero duty as an effort to augment domestic supplies. While there are no quantitative
restrictions on oilmeal imports, availability of other feed material continues to generally
discourage imports, even at zero import duty. Aside from animal feed use, oil meals like
soymeal are increasingly used in processed food products, healthcare products, and also as
low-cost high-protein supplements. Soymeal is also finding new niche markets as a
texturized protein (chunks, flakes, nuggets, and grains), to fortify other food products
(wheat flours, biscuits etc), or for the extraction of protein isolates (with a 90 percent or
more protein content, it is a good substitute for animal protein).
Sesame seed oil is premium oil, exported in small but significant quantities to cater to
niche demand from overseas buyers. According to industry sources, sesame oil exports in
MY 2011/12 were worth $10.6 million. Countries such as China, Mexico, Taiwan, UAE,
Singapore, the United States of America, the Netherlands and the United Kingdom are
the major buyers of Indian sesame oil.
Figure IV.5.8: Export of Oil meals and Castor oil
Recent Policy Developments

1.
Under DGFT notification No 32 (RE-2012)/20092014, the GOI has extended the

prohibition on export of edible oils until further notice (the previous order expired
on October 2012). However, export of branded consumer packs up to 5 kg are
permitted with a minimum export price of USD 1500 per metric ton. The export
restriction does not apply to non-edible grade castor oil, coconut oil, and certain other
specific tree oils.
2.
The GOI has again extended the subsidized edible oil program for the year ending
September 30, 2013. The program is intended to reach target beneficiaries, providing
1 million tons of imported edible oils at a subsidy of Rs 15 per kg through state
governments public distribution system (PDS).
During the period

August 2012 to
March 31, 2013, the
GOI allowed oilmeal
imports at zero duty
as an effort to
augment domestic
supplies. While there
are no quantitative
restrictions on
oilmeal imports,
availability of other
feed material
continues to
generally
discourage imports,
even at zero import
duty.
63
IV.6 Sugarcane and Sugar

IV.6.1 Recent Trends in Production
Sugarcane
production declined
in 201213 partly
because of the
deficient monsoon in
the key growing
regions in
Maharashtra and
Karnataka in 2012.
Sugarcane
production in
201213 is now
estimated at 336.15
million tonnes as per
the third advance
estimates by the
Ministry of
Agriculture, down
from 361.14 million
tonnes in the
previous year.
Sugarcane production declined in 201213 partly because of the deficient monsoon in the
key growing regions in Maharashtra and Karnataka in 2012. Sugarcane production in
201213 is now estimated at 336.15 million tonnes as per the third advance estimates by
the Ministry of Agriculture, down from 361.14 million tonnes in the previous year.
Another factor that depressed production is the rising stocks of sugar with the sugar mills
in the past two years affecting demand for cane. The closing stock of sugar with the sugar
mills (September 30) in 201112 were 6.2 million tonnes as per the estimates of Indian
Sugar Mills Association, the highest since 200708. The stocks are projected by ISMA to
rise to 8 million tonnes by the end of September 2013.
Sugarcane production in India grew at a trend rate of 2.05 per cent per annum between
200001 and 201213. Sugarcane yields have been relatively stagnant growing at less than
1 per cent between 200001 and 201213 (Figure IV.6.1). Between 201112 and 201213
sugarcane area increased by 0.39 per cent while production and yields declined by 6.89 and
7.26 per cent respectively, as a result of the deficient monsoon in 201213.
Figure IV.6.1: Area, Production and Yield of Sugarcane
Source: Directorate of Economics and Statistics, Ministry of Agriculture. Data on production of Sugarcane for 201213 is the Third Advance Estimates
of the Ministry of Agriculture.
Sugar production in India grew at a trend rate of 3.72 per cent per annum between
200102 and 201213. It declined from 26.34 million tonnes in 201112 to 24 million
tonnes in 201213.
64
Figure IV.6.2: Sugarcane and Sugar Production in India
Source: Directorate of Economics and Statistics and Indian Sugar Mills Association
Sugar production of 201213 - ISMA estimate
The recent policy reforms in the sugar sector have eliminated levy of a portion of sugar to
be sold to the government at a fixed price. The government- state governments- will
procure sugar from the free market. This would let the sugar industry sell based on market
forces and generally improve their price realisations based on market demand conditions.
The state advised prices for sugar cane, however, will continue such that for the
consumers, price will be determined by the cost to the industry affected significantly by the
cane prices. The reforms may not have significant impact on consumer prices in the short
run.
IV.6.2 State level production of sugarcane

Sugarcane production declined sharply in Maharashtra and Karnataka in 201213 by 30.3
and 9.5 per cent over the previous year. Among the cane producing southern states,
Andhra Pradesh also saw declining production but in Tamilnadu there was an increase in
production. Production increased in Bihar by 15.91 per cent in Bihar by 15.9 per cent
(Figure IV.6.3). Crop area increased in Bihar, Tamil Nadu and UP but fell in the other
major sugarcane producing states (Table IV.6.1).
The recent policy

reforms in the sugar
sector have
eliminated levy of a
portion of sugar to be
sold to the
government at a
fixed price. The
government- state
governments- will
procure sugar from
the free market. This
would let the sugar
industry sell based
on market forces and
generally improve
their price
realisations based
on market demand
conditions.
65
Figure IV.6.3. Percentage change in sugarcane production in 201213 over 201112
Table IV.6.1: State wise Area, Production and Yields of Sugarcane (201112 and 201213)
STATES
Area (000 ha)
Production (000 tonnes)
Yield (tonnes/ ha)
201011
201112 201213 201011
201112
201213 201011 201112 201213
Bihar
248
218
253
12764
11289
13085
51.5
Gujarat
190
202
185
13760
12750
13300
72.4
63.1
71.9
Andhra Pradesh
192
204
196
14964
16686
16105
77.9
81.8
82.2
Karnataka
423
430
417
39657
38808
35059
93.8
90.3
84.1
Tamil Nadu
316
346
393
34252
38576
39682
108.4
111.4
101.0
Maharashtra
965
1022
937
81896
86733
60490
84.9
84.9
64.6
Uttar Pradesh
2125
2162
2212
120545
128819
130508
56.7
59.6
59.0
Others
All India
51.7
51.8
426
453
465
24544
27376
27916
57.6
60.4
60.1
4885
5038
5057
342382
361037
336146
70.1
71.7
66.5
Source: Directorate of Economics and Statistics
IV.6.3 Supply and Demand of Sugar

There has been surplus domestic sugar production now for three years in a row. The
opening balance for 201314 is expected to be over 8 million tonnes. Globally, there has
been an increase in sugar production in 2012 leading to decline in prices international
markets.
In the recent years sugar exports as a percentage of total availability has been fluctuating
from 0.02 per cent in 200405 to 10.56 per cent in 201112 (Table IV.6.2). Low prices in
the international markets and high domestic prices led to Indias import of 1.5 million
tonnes of Sugar. But due to availability of stocks about 1.5-2 million tonnes of sugar was
also exported even as production declined5.
5. http://www.thehindubusinessline.com/industry-and-economy/agri-biz/india-may-remain-netsugar-exporter-in-201213/article3349872.ece
66
Table IV.6.2: Sugar Supply and Demand (000 tonnes)

Item
200607
200708
200809
200910
201011
201112
201213
Sugarcane (mill tonnes)

Production
355.5
348.2
285.0
292.3
342.4
361.0
334.5
4.3
11.0
10.5
4.4
5.0
6.8
6.5
Sugar (mill tonnes)

Beginning stocks
Production
28.3
26.4
14.5
18.9
24.4
26.3
24.0
Imports
0.0
0.0
2.4
4.1
0.0
0.0
1.5
Supply
32.6
37.4
27.4
27.4
29.4
33.1
32.0
1.7
5.0
0.2
0.2
2.6
3.5
2.0
Exports
Domestic utilisation
19.9
21.9
22.9
21.3
20.8
22.0
23.0
Ending stocks
11.0
10.5
4.4
5.9
6.0
7.6
7.0
Total utilisation
32.6
37.4
27.4
27.4
29.4
33.1
32.0
Note: Data on sugar production, domestic utilisation and beginning year stocks are from Indian Sugar Mills Association,
http://blog.indoasiancommodities.com/?tag=sugar-stocks
Over the medium term Indias consumption of sugar is expected to increase steadily with
the increase in income and population. The present level of per capita consumption of
sugar in the country is lower than world average. FAO data suggests that across the
countries, there is variation in consumption pattern: Indias per capita consumption is
much higher than China and slightly higher than Japan. However, per capita consumption
in Thailand is higher than India, US and Indonesia (Figure IV.6.4). ISMA also estimates
that about 65 per cent of sugar consumption in India is by bulk consumers such as
beverage, biscuit, confectionery etc manufacturers.
Sugarcane is used to produce biofuel in countries such as Brazil. Rising petrol prices make
use of biofuel competitive. India produces ethanol from molasses of sugarcane to blend
with petrol. Use of sugarcane directly to produce biofuel is not likely in India given the
need for producing food from scarce land and water resources.
Figure IV.6.4: Per Capita Consumption of Sugar across Countries (TE-2011) (Kgs)
Over the medium

term Indias
consumption of
sugar is expected to
increase steadily
with the increase in
income and
population. The
present level of per
capita consumption
of sugar in the
country is lower than
world average.
Source: ISMA
67
IV.6.4 Prices
The declining price
trend and excess
supply in the global
markets have
adversely affected
the margins of sugar
industry. The impact
on cane producers is
also adverse in the
short term as their
price realisations
would also be
affected if sugar
prices weaken.
The WPI of sugar rose sharply in July 2012 and continued to increase as concerns
regarding production prospects began to emerge due to erratic and inadequate rainfall in
Maharashtra and Karnataka. As crushing season commenced WPI began to decline in
October and has shown declining trend since then. WPI began to firm up in April and
May 2013 as the seasonal peak in demand for beverages and ice cream emerged.
The declining price trend and excess supply in the global markets have adversely affected
the margins of sugar industry. The impact on cane producers is also adverse in the short
term as their price realisations would also be affected if sugar prices weaken. The
government has responded by raising import tariff on sugar by 10 per cent and further to
15% in early July. However, this is only a temporary measure as the sector will have to
improve its productivity to maintain its global competitiveness.
Figure IV.6.5: WPI Sugarcane and Sugar: % change month over previous month
Source: Office of Economic Adviser, Govt. of India
Sugar prices are

expected to see
modest increase
upto October when
the new crushing
season begins.
Increase in
consumption is likely
in the short term
only if prices at the
consumer level
decline.
IV.6.5 Outlook
Stocks of sugar are presently at a high level and the cost of holding the stocks will have
adverse impact on industry. However, significant reduction in prices to clear these stocks
is not taking place given the high cost at which sugar is produced. Sugar prices are
expected to see modest increase upto October when the new crushing season begins.
Increase in consumption is likely in the short term only if prices at the consumer level
decline.
IV.7 Potato
IV.7.1 Trends in Production
Initial official estimates of production for 201213 indicate increase of one million tonnes
from 41.48 million tonnes harvested in 201112. However, these estimates appear to be
based on the assumption of unchanged production level for potato in the two important
68
producing states of Gujarat and West Bengal besides a few smaller states. Potato is mainly
a rabi crop, the season estimated to account for more than 90 of annual production. It is
also cultivated with significant irrigation coverage in the rabi season. Karnataka is one of
the states with significant kharif season production of potato. As the late monsoon rains
in 2012 improved availability of irrigation water in the subsequent rabi, potato production
201213 is expected to be larger than in the previous year. Our own estimates place
production in 201213 to be 43 million tonnes, 1.5 million tonnes higher than in 201112.
Much of the increase is based on expansion in crop area. Recent trends suggest that
improvement in yield is necessary for significant further increases in production (Figure
IV.7.1).
Figure IV.7.1: Area, Production and Yield of Potato in India
Our own estimates

place production in
201213 to be 43
million tonnes, 1.5
million tonnes
higher than in
201112.
Source: Directorate of Economics and Statistics, Ministry of Agriculture; estimates for 201213 are first advance estimates.
The yield of potato varies between 20-25 tonnes per hectare across the major producing
states (Table IV.7.1). However, there are also yields outside of this range: in Gujarat, yield
is much higher at 29.7 tonnes per hectare and in Assam it is below 9 tonnes per hectare.
Besides addressing the marketing issues of this vegetable crop, improvement in
productivity will determine its potential to meet the rising demand in the coming years.
Table IV.7. 1: Area, Production and Yield of Potato in Major Producing States: 201213
State/ India
Area
Production
Thous ha
Thous tonnes
Yield
Tonnes/ ha
Karnataka
47.5
504.1
10.6
Gujarat
80.7
2395.5
29.7
25.0
Punjab
85.1
2129.8
Assam
90.3
799.1
96.8
1998.4
20.6
315.4
6308.0
20.0
Madhya Pradesh
Bihar
8.9
West Bengal
376.8
9693.3
25.7
Uttar Pradesh
579.0
14695.7
25.4
1930.9
42478.7
22.0
India
Source: NHRDF (First Advanced Estimates)
69
IV.7.2 Potato Supply and Demand

Nearly all of potato produced in the country is consumed within the country. Less than
one per cent of production is exported. However, exports provide an important stimulus to
the markets. It is estimated that 8.2 per cent of production is processed into products, 68.5
per cent is utilised as table consumption and 10.5 per cent is used as seed material. A
substantial 12.5 per cent is estimated to be the post-harvest loss6.
Exports during April

2012February 2013
were 22.6 thousand
tonnes lower than in
the same period of
previous year.
Exports in 201213 were lower than in 201112. Exports during April 2012February
2013 were 22.6 thousand tonnes lower than in the same period of previous year. We have
revised the export figures in the supply-demand balance sheet for 201112 and 201213
earlier reported in the quarterly report for AprilJune 2013, based on the updated available
data (Table IV.7.2).
Table IV.7.2: Potato Supply and Demand (000 tonnes)
Item
200506
200607
200708
200809
Production
200910
201011
201112
201213
23905
22181
28471
34391
35889
42339
41483
42479
23908
22181
28471
34391
35889
42339
41483
42479
78
92
82
196
97
174
203
236
23829
22089
28389
34195
35792
42165
41280
42243
0.33
0.42
0.29
0.57
0.27
0.41
0.49
0.56
Share of Domestic 99.67
99.58
99.71
99.43
99.73
99.59
99.51
99.44
(000 Tonnes)
Imports
(000 Tonnes)
Total Supply
(000 Tonnes)
Exports
(000 Tonnes)
Total Utilisation
(000 Tonnes)
Share of Exports
to Production (%)
Consumption to Total Supply (%)

Source: NHRDF & FAOSTAT
* Export figures for 201112 and 201213 are based on a review of recent trends.
IV.7.3 Trade
There have been sharp fluctuations in potato exports in the last 10 years. The average
annual growth rate between 200001 and 201112 is 35.6 per cent. Between 200506 and
201112, the average growth rate is 30 per cent per year. There are no export barriers on
the crop. However, given the perishable nature of the commodity, exports have been
limited to geographically close destinations in Middle-east and South Asia.
Lack of adequate post- harvest infrastructure has been a major factor affecting marketing
of vegetables including potato. In the recent years, cold storage facilities have been built up
in the major producing regions. In Uttar Pradesh the storage capacity is about 60 per cent
of production and in West Bengal, the capacity it is about 40 per cent. Managing the sharp
increase in supplies in the immediate post- harvest period remains a challenge for the
markets.
Potato is also traded in the futures market which provides additional marketing support to
the various stake holders.
70
6. Baseline data for Potato & Onion, Small Compiled by Agriwatch for Farmers Agribusiness
Consortium www.sfacindia.com, April 2012.
IV.7.4 Prices
The WPI of potato registered a sharp decline in 201011 after reaching a peak in 200910
and stayed at the lower level for another year (Figure 2). However, prices began to rise
sharply from the beginning of 2012 and the average WPI for 201213 was 60 per cent
higher than in the previous year (Figure IV.7.2).
Figure IV.7.2: Price trends in potato over a longer time horizon: Annual average WPI
The annual averages, however, mask the changes within a year. The first half of 201213
saw steep rise in the prices following a smaller crop in 201112 but then began to decline
as the crop prospects in 201213 appeared to improve. However, since February 2013
prices have again increased reflecting the relatively small increase in production.
Improvement in yields along with better post- harvest infrastructure is needed to reduce
sharp fluctuations in prices within a year and over the years.
Improvement in
yields along with
better post- harvest
infrastructure is
needed to reduce
sharp fluctuations in
prices within a year
and over the years.
71
Figure IV.7.3: Recent Price trends in Potato
The spatial variation

in prices at the
wholesale and retail
level is significant
although the
direction of change
across the main
consuming centres
is similar.
Note: Wholesale price is for Potato White and Retail price is for FAQ, both in Lucknow.
The spatial variation in prices at the wholesale and retail level is significant although the
direction of change across the main consuming centres is similar. The wholesale prices of
potato have risen in all the four metro cities form the beginning of 2013. The retail prices
showed declining trend a little longer in 2013 but have shown rising trend since March in
all the four metro cities. in the beginning of the year but have been increasing in the
months of March and April in three out of four metros. Retail price in Mumbai are stable
in the first four months of 2013.
Figure IV.7.4: Wholesale Prices of Potato in Metro Cities
Source: Directorate of Economics and Statistics, Ministry of Agriculture
72
Figure IV.7.5: Retail Prices of Potato in Metro Cities
Figure IV.7.6 shows the per day market arrivals in major mandis for Potato. In Delhi the
per day market arrivals (average of 20082012) are highest in the month of November and
December with a decline during the summer months. The Potato arrivals in the first few
months of 201304 are following the average trends, registering a decline with the
approach of summer. However, the arrivals in 201314 are much higher than the
corresponding average figures of the previous four years. The average arrivals in Mumbai
show a mixed trend, however arrivals are relatively lower during the summer and monsoon
season. In Lucknow arrivals have been much lower over the years compared to the arrivals
in 2013. In Kolkata arrivals are quite similar throughout the year with a decline during the
summers. In Ahmedabad average arrivals are high in December and January, decline in
February and once again increase in March, showing a gradual decline in the summer
months. The arrivals in 2013 have shown an exactly similar trend so far.
The Potato arrivals

in the first few
months of 201304
are following the
average trends,
registering a decline
with the approach of
summer. However,
the arrivals in
201314 are much
higher than the
corresponding
average figures of
the previous four
years.
73
Figure IV.7.6: Per Day Average Arrivals of Potatoes (Tonnes)
74
Source: : www.agmarknet.nic.in
Trends in the futures market suggest a slight decline in prices in the coming few months.
The Aug 14, 2013 futures price in MCX commodity exchange is expected to reduce to Rs
792.00 per quintal from Rs. 902 per quintal in June 15, 2013 (Table IV.7.3).
Table IV.7.3: Futures Prices of Potato
Launch Date
Expiry Date
16Dec12
Futures Price (Rs.Qtl)

as on 12thJune 2013*
15Jun13
902.00
16Jan13
15Jul13
842.00
16Feb13
14Aug13
792.00
Source: www.mcxindia.com
75
IV.7.5 Outlook
A good potato production in 201213 despite a deficient monsoon had a moderating effect
on prices in January and February 201314. However prices have been increasing in the
following months probably due to infrastructure and transportation problems. As the
future prices state, potato prices should reduce the next 2-3 months, provided market
infrastructure, transportation and storage facilities are improved.
IV.8 Onion
As per the first
advance estimates
by the Ministry of
Agriculture, onion
production in
201213 is projected
at 16.8 million
tonnes, lower by
3.96 per cent as
compared to the
previous year.
IV.8.1 Trends in production

As per the first advance estimates by the Ministry of Agriculture, onion production in
201213 is projected at 16.8 million tonnes, lower by 3.96 per cent as compared to the
previous year. The assessment based on rainfall and trend model also provides an estimate
of 16.8 million in production in 201213, provided in April 2013 quarterly report matches
the first advance estimates.
The first advance estimates show that the decline is estimated to come from lower area
planted under the crop. Improvement in crop yield has narrowed the decline in output due
to the reduction in area (Figure IV.8.1). However, these advance estimates are based on
limited information as estimates for major producing states of Gujarat and Rajasthan are
the same as in the previous year. The erratic monsoon and drought in the major onion
producing state of Maharashtra in 201213 led to sharp decline in planted area by 25 per
cent in the state. Although rainfall was unfavourable, area under onion increased in
Karnataka by about 3 per cent although yield per hectare was stagnant (Table IV.8.1).
Figure IV.8.1: Area Production and Yields of Onion
Significant increase in crop area (10-12 per cent) is projected in 201213 in Madhya
Pradesh, Chhattisgarh and Tamil Nadu. However, only in Tamil Nadu there is significant
increase of yield by about 7 per cent. These patterns suggest that expansion of area does
76
not necessarily lead to increase in yield. Time is required to establish high yielding
practices in the new areas before higher yields are achieved.
Table IV.8.1: Area, Production and Yields of Onion for Major Producing States
States
Area (000 ha)
Production (000 tonnes)
20112012
201213
20112012
20122013
Haryana
27.5
28.0
589.8
516.4
Rajasthan
73.5
73.5
664.2
664.2
Tamil Nadu
37.1
41.6
556.5
667.7
Andhra Pradesh
48.5
50.0
824.8
849.5
Bihar
53.8
54.5
1236.7
1280.7
Gujarat
61.3
61.3
1562.2
1562.2
Madhya Pradesh
88.1
96.9
1957.0
2153.0
Karnataka
177.2
182.4
2451.2
2523.5
Maharashtra
382.0
287.0
5638.0
4546.0
Others
138.3
138.9
2030.7
2053.7
Grand Total
1087.2
1014.0
17511.1
16817.0
Yield(tonnes/ ha)
20112012
201213
21.5
18.5
9.0
9.0
15.0
16.1
17.0
17.0
23.0
23.5
25.5
25.5
22.2
22.2
13.8
13.8
14.8
15.8
14.7
14.8
16.1
16.6
Source: NHB (First Advanced Estimates)
About 75 per cent of onion area and production in 201213 was in the rabi season and the
remaining area and production are obtained almost equally in kharif and late kharif.
IV.8.2 Onion Supply and Demand

About 90 per cent of production is utilised within the country, the balance being exported.
Exports as a percentage of production have declined over the years (Table IV.8.2). Exports
are affected by policy responses to availability situation of this commodity for domestic
consumers. Exports have risen marginally in 201213.
Table IV.8.2: Onion Supply and Demand
Item
200506
200607
200708
200809
Production
200910
201011
201112
201213
8683
8885
9138
13588
12191
15118
17511
16817
8689
8885
9138
13588
12191
15123
17517
16824
962
1382
1009
1671
1677
1364
1534
1640
7727
7504
8129
11917
10514
13759
15983
15177
11.08
15.55
11.05
12.30
13.76
9.02
8.76
90.24
Share of Domestic 88.93
84.45
88.95
87.70
86.24
90.98
91.24
10.04
(000 Tonnes)
Imports
(000 Tonnes)
Total Supply
(000 Tonnes)
Exports
(000 Tonnes)
Total Domestic
Utilisation (000 Tonnes)

Share of Exports
to Production (%)
Consumption to Total Supply (%)

Source: NHRDF & FAOSTAT.
* Export projections of 201213 from DGCIS.
77
IV.8.3 Prices
Wholesale prices in metro cities dropped sharply in February 2013 but in March onwards
started to decline at a slower rate in the metro cities of Mumbai, Delhi and Chennai. In
Kolkata, wholesale prices increased March 2013 onwards (Figures IV.8.2 and IV.8.3).
Retail prices showed declining pattern form February 2013 but there were variations in the
pattern across the metro cities.
In general prices peak in DecemberJanuary, decline upto April, remain stable till
September and begin to rise again (Figure IV.8.4).
Prices are expected

to remain volatile
until the production
gains are registered
with the normal
monsoon rains this
year.
Market arrivals in the first few months of 2013 are higher than average for the recent five
years in Delhi and Ahmedabad. However, they are lower than average in Kolkata and
Mumbai, and match the average in Bangalore indicating variation in regional supplies
affected by the harvest in the producing regions (Figure IV.8.5). The overall price patterns
in different consumption centres are likely to show significant variation. Prices are
expected to remain volatile until the production gains are registered with the normal
monsoon rains this year.
Figure IV.8.2: Wholesale Prices of Onion in Metro Cities (Rs/Quintal)
78
Figure IV.8.3: Retail Prices of Onion in Metro Cities (Rs/Quintal)
Figure IV.8.4: Wholesale Price Index of Onion
79
Figure IV.8.5: Per Day Average Arrivals of Onions (Tonnes)
80
Source: : www.agmarknet.nic.in
IV.8.4 Outlook
Following some set back to production due to deficient rainfall conditions in kharif 2012,
there has been a recovery in onion output in rabi but total output in 201213 is expected
to be lower than 201112. There has been a sharp increase in onion prices in the latter half
of 2012 peaking in December. While prices have declined from this peak, as compared to
the previous year, prices in the recent months of AprilJune 2013 are double the levels seen
in the same period of 2011. Wholesale prices are expected to show sharp fluctuations in
the coming 2-3 months. Retail prices remain a concern as supplies are affected by a
number of constraints in the marketing infrastructure. With normal rainfall in the present
monsoon period, gains in production would help in stabilising prices.
Wholesale prices are

expected to show
sharp fluctuations in
the coming 2-3
months. Retail
prices remain a
concern as supplies
are affected by a
number of
constraints in the
marketing
infrastructure. With
normal rainfall in the
present monsoon
period, gains in
production would
help in stabilising
prices.
81
IV.9. Banana
Banana production
was estimated at
30.28 million tonnes
in 201213 as per the
first Advance
Estimates. This was
6.42 per cent higher
than the final
estimates for
201112.

Banana production was estimated at 30.28 million tonnes in 201213 as per the first
Advance Estimates. This was 6.42 per cent higher than the final estimates for 201112.
The area and yields in 201213 increased by 2.2 and 4.13 per cent respectively from their
levels in 201112. After a spurt in 200506 to 200809 increase in yield has slowed down
(Figure IV.9.1). While the demand pressures are expected to rise, measures to improve the
supplies in terms of protection from pests and diseases, storage and transportation would
become critical to keep this ubiquitous fruit affordable to the consumers.
Figure IV.9.1: Area, Production and Yields of Banana
In the first advance estimates of production, data for Gujarat has been taken at the same
level as in 201112. In some other major producing states such as Madhya Pradesh, West
Bengal Andhra Pradesh and Karnataka, yield estimates for 201213 also appear to be the
same as in 201112 (Table IV.9.1). The production estimates for 201213 are, therefore,
likely to be revised. Based on trend and rainfall in 201213, we estimate production at 31.4
million tonnes, slightly higher than the first advance estimates.
The state level data point to the stagnation in yields across a number of states. Only Bihar
and Kerala have recorded higher yields in 201213 over the previous two years.
82
Table IV.9.1: Area, Production and Yield of Banana in the major producing states and all-India level
States
Area (thous ha)
Production (thous tonnes)
Yield (tonnes/ ha)
201011
201112 201213 201011
201112
201213 201011 201112 201213
Kerala
58.7
52.5
32.4
484
420
404
8.2
8.0
12.5
Chhattisgarh
14.8
16.4
19.2
351
382
431
23.7
23.3
22.4
Orissa
26.9
27.5
27.5
489
506
521
18.2
18.4
18.9
Assam
47.6
49.1
50.0
724
745
760
15.2
15.2
15.2
West Bengal
42.0
43.7
44.7
1010
1054
1078
24.0
24.1
24.1
Uttar Pradesh
32.5
32.5
33.1
1346
1346
1401
41.5
41.5
42.3
Madhya Pradesh 38.1
24.8
26.0
1720
1379
1448
45.2
55.7
55.7
Bihar
31.9
32.1
33.0
1517
1581
1683
47.6
49.2
51.0
Karnataka
111.8
91.6
96.2
2282
2352
2469
20.4
25.7
25.7
Andhra Pradesh 79.3
82.9
92.0
2775
2900
3219
35.0
35.0
35.0
Gujarat
65.0
65.0
3978
4048
4048
61.5
62.2
62.2
64.7
Maharashtra
82.0
82.0
82.0
4303
4315
4100
52.5
52.6
50.0
Tamil Nadu
125.4
130.4
146.0
8253
6736
8016
65.8
51.7
54.9
India
830.5
796.5
814.0
29780
28455
30283
35.9
35.7
37.2
Source: NHB (First Advance Estimates)
IV.9.2 Banana Supply and Demand

The share of domestic use in total supply has been nearly 100 per cent over the years.
Exports as a percentage of production are less than 1 per cent (Table IV.9.2).
Table IV.9.2: Banana Supply and Demand (000 tonnes)
Item
200809
Production (000 Tonnes)
26217
Imports (000 Tonnes)
0
Total Supply (000 Tonnes)
26217
Exports (000 Tonnes)
30
Total Domestic Utilisation (000 Tonnes)
26187
Share of Exports to Production (%)
0.12
Share of Domestic Consumption to Total Supply (%)
99.88
200910
26470
0
26470
54
26416
0.20
99.80
201011
29780
0
29780
58
29722
0.19
99.81
201112
28455
0
28455
46
28409
0.16
99.84
201213
30283
0
30283
50
30233
0.17
99.83
Source: NHB & DGCI&S
IV.9.3 Prices
The wholesale prices for bananas have shown significant fluctuations over the years. Yearon-year basis WPI for banana rose by 6.4 per cent in 201112 after three consecutive years
of nearly double digit increase. In 201213, prices rose more sharply than any other
previous year in the period since 200001 (Figure IV.9.2).
While the modest expansion in production in the last three years increases the potential
for price rise, there are also short term factors leading to sudden spurts in prices. Monthly
pattern of changes in WPI points to the sharp rise in prices in May and then again in
November 2012 well above the seasonal pattern. Prices did decline in September and
December following the seasonal pattern and the overall increase for the year remained
above 20 per cent (Figure IV.9.3).
While the modest

expansion in
production in the last
three years
increases the
potential for price
rise, there are also
short term factors
leading to sudden
spurts in prices.
83
Figure IV.9.2: WPI of banana: % change YOY
Figure IV.9.3: WPI of banana: % change month over month
The wholesale and retail prices have moved in the same direction during 201213 in a
major consumption centre, Delhi. Retail prices appear to be more volatile than the
wholesale prices reflecting lack of appropriate storage infrastructure at the consuming
centres (Figure IV.9.4).
84
Figure IV.9.4: Wholesale and Retail Prices of Banana in Delhi (Rs/Dozen)
Source: Directorate of Economics and Statistics, Ministry of Agriculture.
The average pattern of market arrivals in Delhi (average of 20082012) reflects the highest
arrivals in the month of September after which they decline (Figure IV.9.5). The arrivals
in the first few months of 201304 are following the average trends. In Jalgaon, a
production centre, the average arrivals increase from September onwards and decline in the
summer months. However, in 201314 arrivals have increased considerably ever since
January, reaching a peak in March and declining thereafter. In Bangalore, a consumption
centre, average arrivals show a slight decline during the summer months. However, in
201314 arrivals have shot up in April and showed a decline in May. In Ahmedabad,
average arrivals are the highest in August and September showing gradual decline
thereafter. The arrivals in 201314 have not shown significant fluctuations between the
months January to May. The prospects of normal monsoon in 2013, point to the average
seasonal pattern to continue on the price front in the current year.
The prospects of
normal monsoon in
2013, point to the
average seasonal
pattern to continue
on the price front in
the current year.
85
Figure IV.9.5: Per Day Average Arrivals of Bananas (Tonnes)
86
Source: www.agmarknet.nic.in
IV.9.5 Outlook
Banana prices have remained stable at the beginning of 201314, although they are high
relative to the level seen at the same period last year. Following the seasonal pattern, prices
are expected to show a rising trend upto AugustSeptember.
IV.10 Milk
Indias total milk production in 201112 is estimated at 128 million tonnes, an increase of
about 6 million tonnes over the previous year with 5 per cent growth. Milk production has
increased at a fairly steady rate of 4.5 per cent per year in the last 5 years, between 200708
and 201112. Although there appear to be some cyclical pattern in milk production over
the years, annual growth rate has ranged between 3.5 - 5.2 per cent since 200405 (Figure
IV.10.1). The current phase of production growth is on the rising phase and with a normal
monsoon in the current year, growth rate in milk production is also expected to be in the
range of 4.25-4.5 per cent over the previous year reaching 137.7-138 million tonnes. The
growth rate has been generally between 4-4.5 per cent when the monsoon rainfall has been
above 95 per cent of normal. Production in 201213 is also expected to increase by 3.75
per cent over the previous year.
The current phase of

production growth is
on the rising phase
and with a normal
monsoon in the
current year, growth
rate in milk
production is also
expected to be in the
range of 4.25-4.5
per cent over the
previous year
reaching 137.7-138
million tonnes.
87
Figure IV.10.1: Annual Growth Rate of Milk Production and Monsoon Rainfall Relative to Long Period
Average or Normal Rainfall During JuneSeptember
IV.10.2 State wise trends in production

Uttar Pradesh leads the states in milk production with a share of 17.64% and Madhya
Pradesh has shown highest growth in milk production during 201112 over the previous
year (8.45%) among the major milk producing states. Andhra Pradesh, Uttar Pradesh,
Haryana, Gujarat and Maharashtra have also achieved a growth rate of over 5% in
201112 over the previous year (Table IV.10.1).
Table IV.10.1: Production of Milk by States (000 tonnes)
Sl. No. State
200910
201011
1
2
3
4
5
6
7
8
9
10
11
Uttar Pradesh
Rajasthan
Andhra Pradesh
Gujarat
Punjab
Maharashtra
Madhya Pradesh
Tamil Nadu
Haryana
Bihar
Others
All India
20203
12330
10429
8844
9389
7679
7167
6787
6006
6124
21467
116425
21031
13234
11203
9321
9423
8044
7514
6831
6267
6517
22463
121848
201112
22556
13512
12088
9817
9551
8469
8149
6968
6661
6643
23490
127904
% age growth on
previous year
7.25
2.10
7.90
5.32
1.36
5.28
8.45
2.01
6.29
1.93
4.57
4.97
% share in
201112
17.64
10.56
9.45
7.68
7.47
6.62
6.37
5.45
5.21
5.19
18.37
100.00
Source: Department of AHD&F, GOI
Although India remains the largest milk producer in the world, productivity of its milch
animal stock is low. Within the country also, there is considerable variation in milk yield
per milch animal ranging from less than 1.5 kg/day in most eastern and northeastern states
and close to or more than 5.0 kg/day in Punjab, Haryana and Delhi. The highest average
milk yield of a crossbred cow (10.54kg/day) and buffalo (8.51kg/day) are seen in Punjab7.
7. The Report of the Working Group on Animal Husbandry & Dairying for the 12th Five Year Plan.
88
Deficiency of fodder alone is seen to account for half of the milk yield gap between global
average and Indias average milk yield. The deficiency of dry fodder, concentrates, and
green fodder currently, in the country is estimated to be 10, 33 and 35 per cent,
respectively. Further green fodder crops are usually area, region and season specific and do
not receive much attention in terms of inputs. Although availability of crop residue and
concentrate feed ingredients has improved in recent years with the increasing production
of food crops, production and availability of green fodder has to keep pace with the
growing requirement of livestock production. The National Livestock Mission is expected
to address issues relating to improving availability of feed and fodder to achieve higher
productivity of milch animals.
IV.10.3 Consumption and prices

The cooperative dairy network in the country has over 1,48,000 village-level dairy
cooperative societies with a total membership of more than 14 million farmers. During
201112, these village-level dairy cooperative societies together supplied 28.7 million kg
of milk per day. Liquid milk marketing by the cooperative sector reached 22.9 million litres
per day during the same period, which is less than 10 per cent of total production in the
country. The balance of liquid milk procured by the cooperatives is used for manufacture
a wide range of value-added products. The volume of milk procurement and marketing by
cooperatives has been rising steadily since 198081 (Figure IV.10.2).
Deficiency of fodder
alone is seen to
account for half of
the milk yield gap
between global
average and Indias
average milk yield.
The deficiency of dry
fodder,
concentrates, and
green fodder
currently, in the
country is estimated
to be 10, 33 and 35
per cent,
respectively.
Figure IV.10.2: Procurement and Marketing of Milk by the Cooperative Sector
The Department of Animal Husbandry, Dairying and Fisheries, Ministry of Agriculture,

Government of Indias assessment is that the private sector plants- domestic and foreigntogether handle an equal amount of milk as the cooperative sector on daily basis. Besides
supplying liquid milk these companies also manufacture value added products like ghee,
dairy whitener, cheese, milk-food, condensed milk, UHT milk, and Dahi.
Milk prices- in terms of WPI- have gone up by 7.24 per cent during 201213 over the
previous year, as compared to the increase of 9.9 per cent in WPI of food articles and 8.13
per cent in the case of food products. The WPI for milk has continued to show stable
pattern in the recent months with the year on year increase at less than 5 per cent since
Milk prices- in terms

of WPI- have gone up
by 7.24 per cent
during 201213 over
the previous year, as
compared to the
increase of 9.9 per
cent in WPI of food
articles and 8.13 per
cent in the case of
food products. The
WPI for milk has
continued to show
stable pattern in the
recent months.
89
January 2013. This is in contrast to the double digit rate of increase in the WPI for eggs,
fish and meat (Figure IV.10.3). The retail prices of milk and milk products were also
revised upward by cooperatives and milk producing companies in April and May 2013
with the onset of lean season (AprilJuly).
Figure IV.10.3: WPI for Milk and Eggs, Fish and Meat: % Change Over the Previous Year
In the domestic
market, with the
early onset of
monsoon this year
availability of green
fodder is expected to
improve with the
consequent
beneficial impact on
milk production.
Prices are likely to
stabilise at the
present level for the
next 3-4 months.
90
International dairy products prices after showing an upward trend during the first four
months of 2013, dropped in May, but still remained substantially higher than the previous
year level. This was because of the limited export surplus in the main exporting countries.
The FAO Dairy Price Index reached 259 points in April, close to its historic peak in late
2007, and dropped to 250 points in May. The current higher prices of milk products are
likely to remain at elevated levels for the next few months because of the absence of
substantial growth in milk output in the principal exporting countries.
In the domestic market, however, with the early onset of monsoon this year availability of
green fodder is expected to improve with the consequent beneficial impact on milk
production. Prices are likely to stabilise at the present level for the next 3-4 months.
IV.10.4 Trade
The value of export of dairy products from India has been estimated at Rs.1,412 crore
during 201112, which is less than 0.5 per cent of the total value of milk. Bangladesh,
Egypt, UEA, Saudi Arabia, Algeria, Yemen Republic and Iran are the major importing
countries. South East Asia, Russia and Africa are seen as emerging markets for India
Dairy products. However, India has to compete with the advanced economies such as US,
EU, Australia in the market in emerging developing economies.
Dairy industry is regulated in most countries with the imports generally restricted and
exports subsidised. However, India also has restrictions on exports given the limited
surpluses available for exports and the impact of exports on prices when the production
drops below trend growth. India permitted export of casein in April 2012, SMP in June
2012. India also permitted export of whole milk powder (WMP), dairy whitener, infant
milk foods and other milk products in November 2012 till the close of the financial year
2013. FAO has forecasted that world trade in dairy products will expand by a modest 1.9
per cent in 2013, as compared to an average of 7 per cent in recent years and is expected
to reach 54.7 million tonnes of milk equivalent. Asia will remain the main market for dairy
products, accounting for some 54 percent of world imports, followed by Africa, with 16
percent.
IV.10.5 Outlook
Our assessment of milk production during 201213 for India is 132.1 million tonnes or an
increase of 3.75% over the previous year. In view of the normal and well distributed
monsoon predictions for the current year milk production in 201314 is projected to grow
by 4.25-4.5 per cent to reach at 137.7-138 million tonnes. Against the backdrop of
favourable production conditions, prices are expected to remain stable in the next 3-4
months.
In view of the normal

and well distributed
monsoon predictions
for the current year
milk production in
201314 is projected
to grow by 4.25-4.5
per cent to reach at
137.7-138 million
tonnes.
91
92
PART V
Conclusions
The outlook for agriculture in 201314 is positive with a number of indicators being
favourable for a good harvest. Forecast of a near normal monsoon rainfall this year is a
critical leading indicator of a positive outlook for this year. The rainfall in June has been
well above normal at the all India level with less than normal precipitation only in the East
and North Eastern region. The prediction for July is for close to normal rainfall which
augurs well for kharif plantings.
At the global level, prices of major food commodities have shown moderating trend from
the high levels seen in the second half of 2012. Projected increased production of major
grains and vegetable oils in the current year is lending stability in prices. Only in the case
of dairy products, prices are seen to be rising. Although global economic growth is
expected to register only modest improvement, Indias exports of grains would be affected
by their competitiveness in the world markets.
The minimum support prices (MSP) for kharif crops this year maintain incentives for food
production and address the need to raise production of pulses and oilseeds: in the case of
rice, the MSP has been raised by 4.8 per cent and in the case of tur (arhar) the increase is
about 11 per cent and for the oilseed crop of soybean it is set even greater by 13-14 per
cent.
Among the concerns input prices are important ones, particularly energy and labour.
While consumer level subsidies make the price rise seen in the case of diesel and electricity
at the wholesale level less sharp, continued rise in Consumer Price Index (CPI) may raise
labour costs for agriculture as well. Depreciation of the rupee and rising energy prices will
also have implications to fertiliser subsidies.
The third advance estimates place foodgrain production in 201213 at 255.4 million
tonnes, about four million tonnes lower than the final estimates for 201112. The rabi
harvest benefitted from the pickup in rainfall in the later months of the monsoon period
in 2012.
Based on the expected normal monsoon rainfall in the current year, the present outlook
report estimates kharif foodgrain production of 130.6-135.2 million tonnes as compared
to 128.3 million tonnes in 201213. Soybean production is estimated at 14.1-14.9 million
tonnes, nearly the same level as in 201213.
Sugarcane production is projected to increase to 339.8-347 million tonnes from 336.1
million tonnes in the previous year. Potato, onion and banana production is projected to
increase from the last years levels. Milk production is projected to increase from 132.1
million tonnes in 201213 to 137.7-138 million tonnes in 201314.
The food price index comprising of WPI of food articles and food products, is projected
to continue to reflect an increase of 8-9 per cent, year on year basis, in the next three
months. Although price rise is seen to be moderating across a number of commodities, the
price level remains high as compared to the prices prevailing a year back.

prices of major food
commodities have
shown moderating
trend from the high
levels seen in the
second half of 2012.
Projected increased
production of major
grains and vegetable
oils in the current
year is lending
stability in prices.
Only in the case of
dairy products,
prices are seen to be
rising.
Among the concerns

input prices are
important ones,
particularly energy
and labour. While
consumer level
subsidies make the
price rise seen in the
case of diesel and
electricity at the
wholesale level less
sharp, continued rise
in Consumer Price
Index (CPI) may raise
labour costs for
agriculture as well.
93
The stocks of rice

and wheat on June 1,
2013 were about
lower than 82
million tonnes on
June 1, 2012 they are
higher than the
requirements of
buffer and
operational
requirements of
PDS. The stock of
wheat has declined
in 2013 as a result of
decline in
procurement.
Fruits and vegetables prices show sharp fluctuations due to seasonality in production and
inadequate marketing infrastructure. In the case of onions, prices have doubled in the first
three months of the current financial year of 201314 over the same period last year. Set
back to production in 201213 due to deficient rainfall conditions in kharif 2012 led to
sharp increase in prices in the latter half of 2012. While prices have declined from this
peak, in the recent months of AprilJune 2013 they are double the levels seen in the same
period of 2012. Wholesale prices are expected to show sharp fluctuations in the coming 23 months. Retail prices, therefore, remain a concern as supplies are affected by a number
of constraints in the marketing infrastructure. With normal rainfall in the present
monsoon period, gains in production would help in stabilising prices.
Banana prices have remained stable at the beginning of 201314, although they are high
relative to the level seen at the same period last year. Following the seasonal pattern, prices
are expected to show a rising trend upto AugustSeptember.
Milk production during 201213 is estimated in the report to increase by 3.75% over the
previous year. In view of the normal and well distributed monsoon predictions for the
current year milk production in 201314 is projected to rise by 4.25-4.5 per cent. Against
the backdrop of favourable production conditions, prices are expected to remain stable in
the next 3-4 months.
The stocks of rice and wheat on June 1, 2013 were about 77.7 million tonnes, lower than
82 million tonnes on June 1, 2012 they are higher than the requirements of buffer and
operational requirements of PDS. The stock of wheat has declined in 2013 as a result of
decline in procurement. The implementation of National Food Security Ordinance
announced in early July would increase demand for wheat and rice to some extent as more
supplies will be available at lower prices for the consumers eligible under the program and
the indirect effect would increase demand for more high valued food items. However, the
overall impact would be determined by the roll out of the program across states.
The overall supply-demand balances point to adequate supplies to meet normal domestic
and export demand. The overall output price conditions in the market continue to signal
the need for improving market infrastructure and productivity to achieve stable price
conditions.
94
Meetings/ Workshops Organised under the Project Outlook and

Situation Analysis for Food Security during the Quarter April June
2013.
Monthly briefings held in the Ministry of Agriculture, Krishi Bhawan
Eighteenth monthly briefing under the Project was held on 29th April, 2013, under the Chairmanship of
Secretary (A&C). Dr. Holger Matthey, Economist, FAO, Rome and Dr. Gregoire Tallard, Agricultural Policy
Analyst, OECD, Paris made a presentation on India specific outlook results in the OECD-FAO Agricultural
Outlook.
Nineteenth monthly briefing under the Project was held on 28th May, 2013. The meeting was chaired by
Secretary (Agriculture & Cooperation). Dr. Shashanka Bhide, NCAER gave a presentation on the progress of
NFSM-FAO supported work on the use of Personal Digital Assistant (PDAs) to collect information relating
to production, and marketing related variables relevant for assessing emerging agricultural outlook scenario.
Twentieth monthly briefing under NCAER Project on Outlook and Situation Analysis for Food Security was
held under the Chairmanship of Secretary (A&C) on 26th June, 2013. Prof. U.C. Mohanty, Centre for
Atmospheric Sciences, Indian Institute of Technology, Delhi, made a Presentation on Assessment of Monsoon
2013 and Mr. Abinash Verma, Director General, Indian Sugar Mills Association (ISMA) made a Presentation
on Sugar and Sugarcane: Policies and Outlook for the Sector.
Workshop
A three days workshop on OECD-FAO Agricultural Outlook Processes, Methods and Results was organised
on Agricultural Outlook and Situation Analysis for Food Security during 29th April1st May, 2013. The first
session was at Krishi Bhawan on April 29th and the remaining two days at National Agricultural Science
Centre, ICAR, New Delhi. Senior officials in the ministry and a number of researchers participated in the
workshop. Dr. Holger Mathey from FAO, Rome and Dr. Gregoire Tallard from OECD, Paris introduced the
modelling work involved in the medium term agricultural outlook assessment provided in the OECD-FAO
reports.

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About the Project

Agricultural Outlook and

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

Agricultural Outlook and

Quarterly Agricultural Outlook Report

National Council of Applied Economic Research

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

Overview of Agricultural Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Global Economic Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Overview of the Domestic Food Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

Commodity Outlook Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

Coarse Grains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

Edible Oilseeds and Oils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58

Sugarcane and Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64

IV.10 Milk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87

Monsoon scenario for 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Kharif 201314 Crop Forecast (million tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Production of potato, onion, banana and milk in 201213 and 201314 . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Trends in the prices of inputs % YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

MSPs for kharif crops % change, YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Projections of WPI Based on ARIMA models % Change Year on Year . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Food Balances 201314 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

CBOT Futures Price Quotes US$/MT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Agricultural Outlook Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

Kharif 201314 Crop Forecasts (million tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

Year-on-Year Inflation Trend in Major Food Commodities WPI % change . . . . . . . . . . . . . . . . . . . . . . . .34

Agri- Policy Developments During April June, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

Government operations in Rice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

Supply and Demand Balance for Rice (1000 Tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43

Demand Supply Balance Sheet for Maize (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51

Imports of Pulses by Type and Major Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56

Sugar Supply and Demand (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67

Potato Supply and Demand (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70

Futures Prices of Potato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75

Onion Supply and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77

Banana Supply and Demand (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83

Production of milk by States (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88

International Ag Policy Developments Likely to Impact India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Assessing Agricultural Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

GDP Growth - Agriculture vs. Overall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Agricultural Production Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Rainfall in Monsoon 2013 to be better than Monsoon 2012 (% of LPA) . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Trends in International Prices FAO Food Prices Indices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Global Price Trends of Major Food Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Stocks-to-Use Ratio of Major Ag Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Food Inflation Exceeds Overall Inflation Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34

Year on Year Increase in Rice Wholesale Price Index % YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Basmati Rice Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

Parboiled Rice Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

Other Rice Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

Broken Rice Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

Rice Export Price India vis-a-vis International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

Trend in Wheat Procurement by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45

Wheat Price Inflation WPI (% YOY ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

Wheat Exports by Major Destination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47

Government Wheat StocksActual Vs Buffer Norms (million tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . .48

Coarse Grain Production Trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

Maize price comparison US vs. India (US$/tonne) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50

India Maize Exports by Destination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51