Source: Business Standard
With its output falling steeply this kharif season, there is a high dependence on the monsoon. Following record production of 16.64 million tonnes (mt) in 2010-11, output was lower in the next two years. Now, the 2nd Advance Estimates put the kharif crop at 15.59 mtin 2012-13, 5.5% less than the previous year; rabi sowing was down 9% till the first week of March. Prices started to rise in the second half of 2012, with lower output from major global suppliers like the US and high demand. Moreover, the MSP for maize was raised 19.8% in the 2012-13 kharif season to Rs.1,175 a quintal.
With the given demand-supply situation, the International Grain Council anticipates though there will be slight seasonal variation as harvests come in, there will be a sustained upward pressure on prices this year. Further, maize being a key input for poultry feed, the starch industry, etc, these price impulses will move through the system impacting inflation on other items.
IPM data till week ending March 16, 2013. The Indicus Price Monitor (IPM), a product of Indicus Analytics Pvt. Ltd. tracks real time wholesale prices of 60 agricultural products from about than 3,000 mandis across the country. Due to differences in methodology, the actual levels of the IPM differ from the corresponding WPI. However, broad trends are in sync with each other.