Agiculture Report Apr June 2013

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
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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
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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
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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. II. III. IV. Overview of Agricultural Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Global Economic Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Overview of the Domestic Food Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Commodity Outlook Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 IV.1 IV.2 IV.3 IV.4 IV.5 IV.6 IV.7 IV.8 IV.9 Rice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Coarse Grains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Pulses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Edible Oilseeds and Oils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58 Sugarcane and Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64 Potato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68 Onion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76 Banana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
IV.10 Milk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87 V. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93
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List of Tables
I.1 I.2 I.3 I.4 I.5 I.6 I.7 I.8 I.9 II.1 II.2 III.1 III.2 III.3 III.4 IV.1.1 IV.1.2 IV.2.1 IV.3.1 IV.4.1 IV.4.2 IV.6.1 IV.6.2 IV.7.1 IV.7.2 IV.7.3 IV.8.1 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 food commodities, food products and farm inputs WPI, % YOY . . . . . . . . . . . . . . .6 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 Projections of Wholesale Prices in Delhi Based on Harmonic Analysis % Change Year on Year . . . . . . . .10 Food Balances 201314 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Global Production Forecasts for Major Food Commodities (Million Tonnes) . . . . . . . . . . . . . . . . . . . . . .16 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 Supply and Demand Balance for Wheat (1000metric tonnes) marketing year . . . . . . . . . . . . . . . . . . . . . . .48 Demand Supply Balance Sheet for Maize (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Imports of Pulses by Type and Major Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56 Demand and Supply Balance Sheet for Pulses (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 State wise Area, Production and Yields of Sugarcane (201112 and 201213) . . . . . . . . . . . . . . . . . . . . . .66 Sugar Supply and Demand (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 Area, Production and Yield of Potato in Major Producing States 201213 . . . . . . . . . . . . . . . . . . . . . . . . .69 Potato Supply and Demand (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70 Futures Prices of Potato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75 Area, Production and Yields of Onion for Major Producing States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
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List of Tables
IV.8.2 IV.9.1 IV.9.2 IV.10.1 Onion Supply and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77 Area, Production and Yield of Banana in the major producing states and all-India Level . . . . . . . . . . . . . .83 Banana Supply and Demand (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83 Production of milk by States (000 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
List of Boxes
II.1 III.1 International Ag Policy Developments Likely to Impact India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Assessing Agricultural Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
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List of Figures
I.1 I.2 I.3 I.4 I.5 I.6 II.1 II.2 III.1 IV.1.1 IV.1.2 IV.1.3 IV.1.4 IV.1.5 IV.1.6 IV.1.7 IV.2.1 IV.2.2 IV.2.3 IV.2.4 IV.2.5 IV.3.1 IV.3.2 IV.3.3 IV 4.1 IV.4.2 IV.4.3 IV.4.4 IV.4.5 IV.4.6 IV 5.1 IV.5.2 GDP Growth - Agriculture vs. Overall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Share of Agriculture & Allied Sectors in Overall GDP in Constant (200405) Prices . . . . . . . . . . . . . . . . .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 Comparison of domestic (WPI) and international (US$) commodity price trends % YOY . . . . . . . . . . . . .9 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 Government rice stocks actual vis buffer Norm (million tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Trend in Wheat Procurement by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Wheat Price Inflation WPI (% YOY ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46 Wheat Exports by Major Destination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Indian Wholesale Wheat Price vis--vis US SRW Wheat Price FOB . . . . . . . . . . . . . . . . . . . . . . . . . . . .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 Production Trend of Pulses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Kharif, Rabi and Total pulses production trend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Per capita net availability of pulses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 Price Trends in Total Pulses, Gram and Arhar WPI % Change YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54 Price Trends in Moong, Lentil and Urd WPI % Change YOY, 2013 over 2012 . . . . . . . . . . . . . . . . . . . . .54 Gram Prices in Different Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 All India Season-wise Area, Production and Yield of Nine Oilseeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58 Area, production and Yield growth rates of Nine oilseeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
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List of Figures
IV.5.3 IV.5.4 IV.5.5 IV.5.6 IV.5.7 IV.5.8 IV.6.1 IV.6.2 IV.6.3 IV.6.4 IV.6.5 IV.7.1 IV.7.2 IV.7.3 IV.7.4 IV.7.5 IV.7.6 IV.8.1 IV.8.2 IV.8.3 IV.8.4 IV.8.5 IV.9.1 IV.9.2 IV.9.3 IV.9.4 IV.9.5 IV.10.1 IV.10.2 IV.10.3 Edible oil Production and Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Oilseed and Vegetable Oil Price Inflation (YoY % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Whole price index of Rapeseed and Mustard, Palm oil and International Price of Palm Oil (YOY % Change) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Total Imports of Edible Oils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Share of different oils in Total Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Export of Oil meals and Castor oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Area, Production and Yield of Sugarcane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64 Sugarcane and Sugar Production in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65 Percentage change in sugarcane production in 201213 over 201112 . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Per Capita Consumption of Sugar across Countries (TE2011) (Kg) . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 WPI Sugarcane and Sugar % change month over previous month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68 Area, Production and Yield of Potato in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69 Price trends in potato over a longer time horizon Annual average WPI . . . . . . . . . . . . . . . . . . . . . . . . . . .71 Recent Price trends in Potato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72 Wholesale Prices of Potato in Metro Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72 Retail Prices of Potato in Metro Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73 Per Day Average Arrivals of Potatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74 Area Production and Yields of Onion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76 Wholesale Prices of Onion in Metro Cities (Rs/Quintal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Retail Prices of Onion in Metro Cities (Rs/Quintal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79 Wholesale Price Index of Onion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79 Per Day Average Arrivals of Onions (Tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80 Area, Production and Yields of Banana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82 WPI of banana % change YOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84 WPI of banana % change month over month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84 Wholesale and Retail Prices of Banana in Delhi (Rs/Dozen) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85 Per Day Average Arrivals of Bananas (Tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86 Annual growth rate of milk production and monsoon rainfall relative to long period average or normal rainfall during JuneSeptember . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 Procurement and marketing of milk by the cooperative sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89 WPI for milk and Eggs, fish and meat % change over the previous year . . . . . . . . . . . . . . . . . . . . . . . . . . .90
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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
Rice 200809 200910 201011 201112 201213 # 99.18 89.09 95.98 105.31 104.22
Wheat 80.68 80.80 86.87 94.88 93.62
C.Grains 40.03 33.55 43.40 42.04 39.52
Pulses 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 34.40 36.60 42.30 41.48 42.48
Onion 13.57 12.16 15.12 17.51 16.82
Bannana 26.20 26.50 29.80 28.46 30.28
Milk 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 JuneSept 2012 93 96 90 89 92 June 12 31 61 71 99 72 Actual Jul 12 74 96 81 87 87
Rainfall % of normal Aug 12 116 100 115 74 101 Sep 12 124 120 93 106 112 Forecast JuneSep 2013 94 98 103 98 98 Actual June 13 211 163 127 65 129
Northwest Central South Peninsula North-East All India
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 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 Food Articles Food Products Cereals Rice Wheat Jowar Bajra Maize Pulses Gram Tur Groundnut seed Rapeseed & Mustard seed Soyabean Vegetables Potato Onion Fruits Banana Groundnut oil Rapeseed & Mustard Oil Palm oil Edible oils Sugar Grain mill products Milk 7.24 7.30 7.12 3.87 3.05 -1.84 31.13 10.04 21.72 2.52 29.21 -10.66 21.36 10.86 9.65 -1.95 -2.25 -28.09 14.21 6.39 12.79 16.85 7.58 12.55 5.11 0.27 10.31 9.28 9.90 8.13 13.42 12.69 15.51 -5.13 20.84 13.81 19.57 37.43 8.82 23.45 35.31 50.49 17.20 60.46 24.56 1.30 21.39 17.55 13.49 4.21 9.13 11.33 6.71 7.24 6.49 6.08 7.27 15.52 17.09 13.55 6.93 25.87 10.87 10.52 4.49 20.63 16.85 8.60 31.80 -8.88 -0.63 90.83 0.56 26.51 9.29 -1.06 -6.47 2.01 8.67 11.04 4.04 7.64 8.25 6.50 16.01 18.48 12.65 4.44 25.51 11.97 5.95 -2.23 16.86 11.03 2.89 22.91 4.85 -3.44 97.40 0.97 11.94 4.88 0.20 -6.71 0.75 7.33 13.82 4.46 8.60 9.74 6.41 17.18 19.11 13.83 4.67 26.51 16.56 1.59 -9.20 14.16 5.54 4.91 11.05 16.47 -14.22 114.00 -0.43 11.29 1.57 0.46 -4.32 0.00 7.21 12.93 3.74 7.58 8.03 6.72 16.24 18.23 13.34 5.34 25.96 13.11 5.92 -2.57 17.15 11.12 5.43 21.49 4.28 -6.75 101.31 0.38 16.10 5.23 -0.13 -5.84 0.92 7.73 12.59 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 Diesel Pesticides Manuf. Prod Electricity (Agriculture) WPI All Commodities Other indicators CPI Agricultural labour Exchange rate (Rs/ USD)
Note: AprilMay
201314 Apr 7.1 20.6 2.6 3.7 36.2 4.8 May 7.1 21.2 3.0 3.1 36.2 4.7 June 4.92 22.77 5.09 2.75 11.12 4.86 Apr June 6.36 21.49 3.57 3.18 26.66 4.78
13.5 8.5 1.1 7.3 5.1 8.9
12.4 11.6 5.5 5.4 21.8 7.4
8.2 5.1
10.0 13.4
12.3 5.1
12.7 1.2
NA 4.4
12.51* 3.6
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 Paddy ( common) Jowar (Hybrid) Bajra Maize Ragi Tur Moong Urad Groundut in shell Soybean black Soybean yellow 8.00 11.36 11.36 11.36 8.81 6.67 10.41 13.79 17.39 17.86 17.36
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.
201213 15.74 53.06 19.90 19.90 42.86 20.31 25.71 30.30 37.04 33.33 32.54
201314 4.80 0.00 6.38 11.49 0.00 11.69 2.27 0.00 8.11 13.64 14.29
The MSPs for kharif 2013 season provide a framework for stability in prices for the main commodities.
I.5 Assessment of food commodity prices in the short term

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
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.
Figure I.6: Comparison of domestic (WPI) and international (US$) commodity price trends: % YOY
Rice Apr 13 May 13 June 13 Apr 13* May 13* June 13* 17.1 18.5 19.1 -2.2 -9.9 -9.9
Wheat 13.9 12.6 13.8 9.2 20.7 13.5
Maize 11.4 12.0 16.6 10.3 9.9 11.2
Banana 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 8.9 7.3 7.2 -35.7 -34.8 -32.3
Soyabean 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 Wheat Jowar Bajra Maize Gram Tur Pulses Groundnut Seed Rapeseed/ Mustard Seed Soyabean Edible oils Onion Potato Food sector Food_articles Food_products 19.1 13.8 4.7 26.5 16.6 -9.2 14.2 1.6 5.5 4.9 11.1 0.0 114.0 -14.2 8.6 9.7 6.4 17.6 14.4 8.1 17.9 17.4 -17.0 7.9 -6.8 7.4 3.9 -5.9 -0.2 66.2 -15.9 7.4 9.9 5.5 16.6 10.3 4.3 12.1 14.1 -19.6 0.0 -10.7 4.7 -2.2 -12.0 -0.5 52.6 -20.6 7.5 11.3 4.0 15.0 6.0 2.1 7.8 9.0 -19.5 0.4 -12.6 1.9 -6.5 -8.3 -1.3 64.0 -9.5 7.5 10.9 3.0 2.6 1.8 -2.1 0.4 3.5 -1.9 0.0 -0.8 -5.8 1.7 -7.2 -0.5 23.9 1.6 2.1 3.0 0.4 1.6 1.5 1.3 -0.5 1.8 1.1 1.1 -0.7 0.5 3.3 -0.3 1.2 -11.1 4.5 0.5 1.6 1.1 1.2 1.1 -1.1 0.0 0.7 2.7 0.5 1.7 1.5 2.5 -1.5 1.2 -1.4 0.6 0.7 1.0 1.1
Sep13 0.8 0.0 -2.8 -3.8 -2.6 -0.2 1.0 -1.8 -1.2 0.7 -2.5 -0.5 7.4 4.7 0.9 0.3 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 Wheat Rice Tur Dal Chana Dal Urad Dal Moong Dal Masur Dal Potato Onion Sugar Soy oil Palm oil 22.2 14.8 10.1 -11.9 5.6 21.9 22.1 -5.1 71.0 5.1 -4.9 0.1 23.9 6.1 3.7 6.4 5.4 25.3 -9 9.7 -1 10.5 57.6 8.5 -4 4.6 -0 0.3 4.8 6.1 -8 8.9 -2 24.8 5.2 21.3 -1 12.2 -1 13.2 65.6 6.5 -3 3.9 1.6 4.7 6.0 -8 8.7 -2 23.8 5.1 17.2 -1 14.3 -1 16.2 89.2 3.9 -2 2.7 3.8
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.
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
10
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 A. Supply side Beginning stocks Production Imports Total supply B. Demand side Domestic consumption Exports Utilisation C. Closing stocks 98,000 8,000 106,000 25,000 90,200 5,000 95,200 19,000 18,395 4,000 22,395 660 21,800 200 22,000 1,800 17979 0 17,979 1,621 23000 2000 25,000 7,000 15177 1640 16,817 757 42243 236 42,479 1,400 24,000 107,000 0 131,000 24,200 90,000 0 114,200 550 22,500 5 23,055 1800 18,200 3,800 23,800 500 9100 10000 19,600 6500 24000 1500 32,000 750 16817 7 17,574 1400 42479 0 43,879 Sugar* Onion* Potato*
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.
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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

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
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.
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.
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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. 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.
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.
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 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.
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.
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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. 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.
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.
Despite an anticipated significant decline in sugar production in India, global sugar production is expected to reach a record 175 million tonnes.
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Table II.1: Global Production Forecasts for Major Food Commodities (Million Tonnes) FAO USDA ABARES IGC Wheat 201112 201213 201314 Rice 201112 201213 201314 Maize 201112 201213 201314 All coarse grains 201112 201213 201314 Total oilseeds 201112 201213 201314 Total veg oils 201112 201213 201314 Sugar (Raw equivalent) 201112 201213 201314 Milk 201112 201213 201314 737.9 759.6 NA 529.8 544.8 556.1 NA NA NA NA NA NA 173.5 177.3 NA 161.9 172.0 174.9 175.1 179.2 181.9 NA NA NA 181.2 186.7 NA 157.0 159.9 166.1 152.0 155.0 161.0 NA NA NA 452.3 474.3 NA 442.1 467.9 490.8 438.0 462.0 478.0 NA NA NA 1167.5 1160.7 1266.0 1154.6 1126.9 1250.0 1156.0 1125.0 1223.0 1155.0 1131.0 1234.0 884.3 856.1 960.0 883.3 855.7 962.6 884.0 849.0 944.0 876.0 856.0 945.0 485.3 489.9 499.1 465.8 470.2 479.2 463.0 465.0 472.0 466.0 470.0 NA 701.5 659.1 702.0 697.2 655.6 695.9 696.0 656.0 688.0 696.0 655.0 682.0
Change from previous year*
+ +
+ +
+ +
+ +
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
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.
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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.
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Dairy product prices, after peaking in April, declined in May and are likely to further weaken in coming months.
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 02Nov12 07Dec12 04Jan13 01Feb13 01Mar13 05Apr13 03May13 07Jun13 Maize CBOT 02Nov12 07Dec12 04Jan13 01Feb13 01Mar13 05Apr13 03May13 07Jun13 Soya Oil CBOT 02Nov12 07Dec12 04Jan13 01Feb13 01Mar13 05Apr13 03May13 07Jun13 Sugar LCE 02Nov12 07Dec12 04Jan13 01Feb13 01Mar13 05Apr13 03May13 07Jun13 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 324.45 324.26 284.67 290.00 268.14 261.71 268.41 259.23 Sep13 258.84 258.94 234.04 242.60 230.01 217.31 228.04 227.55 Jul13 534.25 529.66 497.88 534.71 524.42 493.74 509.73 561.17 Dec13 326.93 327.48 289.36 295.42 272.82 266.39 273.83 264.74 Dec13 250.58 251.07 225.09 233.06 219.18 210.62 217.90 215.83 Aug13 1125.23 1154.99 1116.85 1183.21 1100.98 1083.34 1080.47 1062.18 Mar14 521.48 519.56 491.26 523.97 510.00 484.01 490.62 532.69 Mar14
Sep13 504.67 503.76 479.32 505.04 483.91 464.81 465.08 497.97 May14
Nov13
Jan14
Mar13 322.79 316.36 274.57 281.09 262.07
May13 325.37 319.76 278.06 284.12 264.74 256.84 261.34 May13 291.13 291.03 268.00 290.44 278.92 247.62 275.38 Mar13 1104.73 1138.01 1100.10 1168.22 1090.62
Jul13 321.51 321.05 280.45 285.96 265.38 258.77 264.92 256.38 Jul13 287.68 289.55 265.63 286.89 270.46 243.20 260.32 261.11 May13
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 292.31 290.24 267.80 289.75 285.12
293.31 299.92 277.41 271.26 278.70 270.25 Mar14 253.23 254.22 229.12 237.19 223.22 214.95 221.84 219.97 Sep13
274.20 279.99 273.56 May14 255.40 256.58 231.98 239.95 225.97 218.10 224.89 222.82 Oct13
275.49 Jul14
Sep14
Jan13 1094.58 1127.21 1089.51
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
May13 526.90 522.20 515.60 511.60 513.90 504.50
Aug13 527.50 525.60 519.10 515.70 502.50 489.90 496.80 482.50
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 528.20 530.10 522.40 519.10 497.60 490.20 494.00 469.80 537.90 531.00 527.20 504.20 499.40 500.50 474.30
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
514.20 507.70 506.70 480.10 510.70 484.60
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Source: Moore Research Centre, Inc. (www.mrci.com/ohlc/index.php)
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 162.0 million tonnes, 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.
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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.
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.
Low prices are expected to stimulate global sugar consumption and trade,
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.
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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. 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
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Setting high export price for wheat by the government could discourage exports in the context of declining global prices.
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.
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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)
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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
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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
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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.
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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.
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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

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. 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 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.
Input prices (fertilizer, diesel, electricity, pesticides) showed a mixed trend.
Depreciation of the rupee would put upward pressure on imported raw material and feedstock for fuel and electricity.
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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
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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

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.
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.
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.
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The following Table summarises the current status of factors impacting the Agricultural Outlook Scenario:
Table III.1: Agricultural Outlook Indicators Indicator no. Indicators Monsoon 1 2 Prices 3 4 5 6 7 Input availability 8 9 10 11 12 External factors 13 14 15 16 17 Export outlook 18 19 20 21 Global supplies 22 23 Pulses Edible oils Rice Wheat Oilmeal Sugar Exchange rate FAO cereal price index FAO vegetable oil price index Global sugar price Global fertilizer price +? +? +? Fertilisers Seeds Credit Reservoir water level Electricity Output prices MSP of major crops Fertiliser Prices Diesel Prices Subsidy on fertilisers Onset Expected rainfall Status vis-a-vis last year Impact on Outlook for Production
+ + +
+Neutral?
+ + + + + -
+ +?
+ +
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.
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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) 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) 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. (0.0846) (0.0055) (0.0626) (0.0041)
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
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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 Maize Bajra Jowar Other coarse grains Pulses Total Kharif foodgrain Groundnut Soybean Sugarcane 92.8 16.1 8.7 2.7 2.0 6.0 128.3 3.5 14.1 336.1 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.
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.
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...)
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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 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan13 Feb Mar Apr May June -0.68 6.12 10.11 10.92 10.63 10.91 10.17 9.34 8.06 6.72 8.80 10.63 12.35 11.95 8.63 6.08 8.25 9.74 0.94 1.53 5.03 5.98 4.89 7.46 9.95 10.35 12.58 14.97 15.28 17.10 17.77 17.75 17.56 17.09 18.48 19.11 -3.42 -3.95 -0.58 5.97 6.75 6.76 6.44 12.97 18.87 19.78 23.25 22.63 21.87 21.81 19.35 13.55 12.65 13.83 11.01 7.86 10.10 11.29 16.77 20.59 28.57 34.54 28.98 19.86 18.77 16.25 15.89 13.95 10.84 10.52 5.95 1.59 -23.15 -2.22 18.43 59.30 72.17 84.91 73.24 70.74 52.45 49.13 67.85 58.03 73.10 50.14 15.80 -0.63 -3.44 -14.22 -75.62 -48.66 -24.06 -11.03 -8.05 -9.46 -10.05 -20.71 -24.69 -9.12 16.55 72.79 125.17 182.36 110.74 90.83 97.40 114.00 12.33 11.70 15.29 15.68 11.90 7.46 8.01 6.68 6.45 6.35 6.18 6.15 4.52 4.52 4.42 4.04 4.46 3.74 9.43 7.65 9.94 11.18 10.37 9.52 10.85 10.91 10.71 9.38 9.76 9.20 7.54 7.04 3.60 2.01 0.75 0.00
Sugar 2.54 4.07 2.87 3.16 5.24 7.13 9.38 16.91 19.87 18.88 15.48 9.84 10.09 10.49 9.35 8.67 7.33 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.
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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.
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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 )
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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.
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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
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COMMODITY OUTLOOK ASSESSMENT
Table IV.1.1: Government operations in Rice Marketing Year Govt MSP for (OctSep) Procurement Paddy Million tonnes Rs. per tonne
PDS Offtake Million Tonnes**
PDS Issue Price for Milled Rice Rs. Per tonne
Govt. Food Subsidy Billion Rs. AAY 241.8 251.8 258.0 230.8 240.1 313.3 437.5 584.4 638.4 728.2 850.0
Common 200203 200304 200405 200506 200607 200708 200809 200910 201011 201112 201213 16.4 (22.8) 22.9 (25.8) 24.7 (29.7) 27.6 (30.1) 25.1 (26.9) 28.7 (29.7) 34.1 (34.4) 31.4 (35.2) 34.2 (35.6) 35.0 (33.3) *36.0 (34.5) 5,500 5,500 5,600 5,700 6,200 7,450 9,000 10,000 10,000 10,800 12,500
Grade A 5,800 5,800 5,900 6,000 6,500 7,750 9,300 10,300 10,300 11,100 12,800 26.1 25.1 20.8 24.0 24.8 25.2 24.7 27.6 30.0 32.1 32.6
APL Grade A 8,300 8,300 8,300 8,300 8,300 8,300 8,300 8,300 8,300 8,300 8,300
BPL 5,650 5,650 5,650 5,650 5,650 5,650 5,650 5,650 5,650 5,650 5,650
3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000
*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 (0.42) million tonnes of broken rice; 1.0 (0.17) million tonnes of brown rice, and small quantities of paddy rice.
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Figure IV.1.2: Basmati Rice Exports
Figure IV.1.3: Parboiled Rice Exports
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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. 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 $490) per ton effective June 30 September 15. Rice exports from other exporting countries such as Pakistan and Vietnam have
It looks unlikely that India will be able to maintain its export tempo in 2013 and 2014 due to both domestic and international developments.
41
become more competitive in recent months (Figure IV.1.6). Furthermore, domestic production in some of the major markets for Indian rice such as Nigerias expected to be higher in MY 201314. One positive development has been significant weakening of Indian rupee against US$, 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.
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.
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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 Production Beginning Stocks Imports Total Supply Exports Food Use Seed, Feed, Waste, Other Total Use Ending Stocks Total Distribution Stocks to Use Ratio % Government Rice Operation Beginning Stocks Imports Procurement Total Availability PDS Offatke Exports Ending Stocks Total Distribution 18,444 0 34,196 52,640 32,280 0 20,360 52,640 20,360 0 35,000 55,360 31,990 0 23,370 55,360 95,980 18,444 0 114,424 2,774 89,090 2,200 91,290 20,360 114,424 22 105,310 20,360 0 125,670 10,400 89,920 2,000 91,900 23,370 125,670 25
201213E OctSep 104,220 23,370 0 127,590 8,000 93,090 2,500 95,590 24,000 127,590 25
201314F OctSep 107,000 24,000 0 131,000 8,000 95,400 2,600 98,000 25,000 131,000 26
23,370 0 36,000 59,370 35,370 0 24,000 59,370
24,000 0 37,000 61,000 36,000 0 25,000 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.
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IV. 2 Wheat
IV.2.1 Production estimates for 201213
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.
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.
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.
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Figure IV.2.1: Trend in Wheat Procurement by State
Punjab 200910 201011 201112 201213 201314 #

# As on June 5, 2013
Haryana 6.72 6.37 6.93 8.67 5.87
10.73 10.03 10.96 12.83 10.89
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 1.15 0.48 1.30 1.96 1.25
Other 0.93 0.45 0.72 1.13 0.05
Total 25.38 22.51 28.34 38.15 25.10
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.
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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.
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.
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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
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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.
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 19 16,125 0 22,347 38,472 23,072 0 36 23,108 15,364 872 76,200 5,212 81,412 19,952 102,236 25 15,364 0 28,335 43,699 24,162 100 -515 23,747 19,952 6,800 78,332 5,500 83,832 24,200 114,832 29 19,952 0 38,148 58,100 30,140 3,100 660 33,100 24,200
201314F AprMar* 90,000 24,200 0 114,200 5,000 84,200 6,000 90,200 19,000 114,200 21 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
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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
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).
200607 Maize Bajra Jawar Millet Barley Total 15.1 8.4 7.2 1.9 1.3 33.9
200708 19 10 7.9 2.7 1.2 40.8
200809 19.7 8.9 7.3 2.4 1.7 40
200910 16.7 6.5 6.7 2.3 1.4 33.6
201011 21.7 10.4 7 2.6 1.7 43.4
201112 21.8 10.3 6 2.3 1.6 42
201213 21.8 8.7 5.3 2 1.7 39.5
201314F 22.5 9.7 5.5 2.2 1.7 41.6
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.
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.
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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.
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.
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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 200 21,730 19 21,949 3,526 17,823 600 600 21,760 3 22,363 4,600 17,763 600
201213 600 21,820 10 21,670 4,800 18,120 550
201314 F 550 22,500 5 23,055 4,000 18,395 660
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).
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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
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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
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.4.3 Price Trends

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.
Since September 2012, the pace of pulse price inflation has shown a declining trend dropping to 5.9 per cent in May 2013.
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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.
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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.
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Table IV.4.1: Imports of Pulses by Type and Major Suppliers Commodity/ Country Values in Rs. Lakh 201112 201213 Dry peas Canada Russia Australia USA France Ukraine Total Tur Myanmar Tanzania rep Malawi Mozambique China USA Total Moong Beans Myanmar Australia China Tanzania Rep Uzbekistan Indonesia Total Chickpea Australia Russia Tanzania rep Myanmar USA Mexico Total Lentil Canada Australia USA China Myanmar Taiwan Total 28229 1237 3252 705 153 302 36575 118619 21156 14198 1578 1194 359 161046 42527 2598 4121 13868 2742 408 77226 180638 38007 15766 13082 6883 7016 280295 131504 10839 11418 4658 1053 916 180487 176704 21538 7890 6531 5941 5226 252383 82893 15088 7625 13937 7594 1965 143940 99890 25392 17848 16769 4413 1041 176815 268480 51123 24946 20025 20137 14125 413668 173013 50082 30660 33365 27139 10774 338120
Quantity (000 tons) 201112 201213
1339 250 128 92 92 68 2039
707 214 119 119 118 47 1371
263 50 29 50 24 6 471
274 74 56 53 13 3 506
318 20 26 12 2 2 430
479 43 17 16 12 12 642
129 7 11 29 5 0 206
465 96 36 33 12 10 698
94 4 9 2 1 1 118
374 65 45 5 4 1 506
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Table IV.4.1: Imports of Pulses by Type and Major Suppliers (contd...) Commodity/ Country Values in Rs. Lakh 201112 201213 Kidney Beans China p rp Myanmar Ethiopia USA Germany Canada Total Other Beans Myanmar Brazil Madagascar Tanzania Rep France Afghanistan Total Other Dried Legumes Myanmar China USA Canada Mexico Denmark Total TOTAL 13824 944806 11719 720 125 43 7054 620 196 112 44 45 8294 1331117 34058 2608 2926 887 209 88 51711 25231 10495 4424 3530 2215 2877 61093 17542 3665 2684 559 392 59 27375 37242 5748 4494 747 642 469 53071
Quantity (000 tons) 201112 201213
38 9 8 1 1 0 63
53 11 10 1 1 1 84
86 5 7 3 1 0 131
73 25 11 10 10 9 180
31 2 0 0 0 0 37 3496
21 2 1 0 0 0 24 4012
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 Production Imports Total supply Total Export Domestic Use Total utilization % imports to production 18,240 2,780 21,020 209 20,811 21,020 15.2 17,090 3,500 20,590 175 20,415 20,590 20.5 201213 18,000 4,012 22,012 203 21,809 22,012 22.3 201314 18,200 3,800 22,000 200 21,800 22,000 21.0
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.
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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.
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.
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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.
4. http://www.seaofindia.com/images/67/PR%20051%20dt_18th%20March,%202013-%20Press% 20Release%20-%20COOIT%27s%20Trade%20Estimate.pdf
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.
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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. 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
Edible vegetable oil production and consumption are expected to increase to 7.6 million tonnes and 18.6 million tonnes, respectively.
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.
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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.
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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
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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. 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.
2.
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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.
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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.
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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 Gujarat Andhra Pradesh Karnataka Tamil Nadu Maharashtra Uttar Pradesh Others All India 248 190 192 423 316 965 2125 426 4885 218 202 204 430 346 1022 2162 453 5038 253 185 196 417 393 937 2212 465 5057 12764 13760 14964 39657 34252 81896 120545 24544 342382 11289 12750 16686 38808 38576 86733 128819 27376 361037 13085 13300 16105 35059 39682 60490 130508 27916 336146 51.5 72.4 77.9 93.8 108.4 84.9 56.7 57.6 70.1 51.7 63.1 81.8 90.3 111.4 84.9 59.6 60.4 71.7 51.8 71.9 82.2 84.1 101.0 64.6 59.0 60.1 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
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Table IV.6.2: Sugar Supply and Demand (000 tonnes) Item 200607 200708 200809 Sugarcane (mill tonnes) Production Sugar (mill tonnes) Beginning stocks Production Imports Supply Exports Domestic utilisation Ending stocks Total utilisation 4.3 28.3 0.0 32.6 1.7 19.9 11.0 32.6 11.0 26.4 0.0 37.4 5.0 21.9 10.5 37.4 10.5 14.5 2.4 27.4 0.2 22.9 4.4 27.4 355.5 348.2 285.0
200910
201011
201112
201213
292.3
342.4
361.0
334.5
4.4 18.9 4.1 27.4 0.2 21.3 5.9 27.4
5.0 24.4 0.0 29.4 2.6 20.8 6.0 29.4
6.8 26.3 0.0 33.1 3.5 22.0 7.6 33.1
6.5 24.0 1.5 32.0 2.0 23.0 7.0 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
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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
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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 Karnataka Gujarat Punjab Assam Madhya Pradesh Bihar West Bengal Uttar Pradesh India
Source: NHRDF (First Advanced Estimates)
Yield Tonnes/ ha 10.6 29.7 25.0 8.9 20.6 20.0 25.7 25.4 22.0
47.5 80.7 85.1 90.3 96.8 315.4 376.8 579.0 1930.9
504.1 2395.5 2129.8 799.1 1998.4 6308.0 9693.3 14695.7 42478.7
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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 (000 Tonnes) Imports (000 Tonnes) Total Supply (000 Tonnes) Exports (000 Tonnes) Total Utilisation (000 Tonnes) Share of Exports to Production (%) Share of Domestic 99.67 99.58 99.71 99.43 99.73 99.59 99.51 99.44 0.33 0.42 0.29 0.57 0.27 0.41 0.49 0.56 23829 22089 28389 34195 35792 42165 41280 42243 78 92 82 196 97 174 203 236 23908 22181 28471 34391 35889 42339 41483 42479 2 0 0 0 0 0 0 0 23905 22181 28471 34391 200910 35889 201011 42339 201112 41483 201213 42479
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.
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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.
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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. Source: Office of Economic Adviser, Govt. of India
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
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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.
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Figure IV.7.6: Per Day Average Arrivals of Potatoes (Tonnes)
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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 16Jan13 16Feb13
Source: www.mcxindia.com
Futures Price (Rs.Qtl) as on 12thJune 2013* 902.00 842.00 792.00
15Jun13 15Jul13 14Aug13
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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
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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
Source: NHB (First Advanced Estimates)
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
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 Production (000 Tonnes) Imports (000 Tonnes) Total Supply (000 Tonnes) Exports (000 Tonnes) Total Domestic 7727 7504 8129 11917 10514 13759 15983 15177 962 1382 1009 1671 1677 1364 1534 1640 8689 8885 9138 13588 12191 15123 17517 16824 7 0 0 0 1 5 6 7 8683 8885 9138
200809 13588
200910 12191
201011 15118
201112 17511
201213 16817
Utilisation (000 Tonnes) Share of Exports to Production (%) Share of Domestic 88.93 84.45 88.95 87.70 86.24 90.98 91.24 10.04 11.08 15.55 11.05 12.30 13.76 9.02 8.76 90.24
Consumption to Total Supply (%)

Source: NHRDF & FAOSTAT. * Export projections of 201213 from DGCIS.
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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)
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Figure IV.8.3: Retail Prices of Onion in Metro Cities (Rs/Quintal)
Figure IV.8.4: Wholesale Price Index of Onion
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Figure IV.8.5: Per Day Average Arrivals of Onions (Tonnes)
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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.
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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.
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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 Chhattisgarh Orissa Assam West Bengal Uttar Pradesh 58.7 14.8 26.9 47.6 42.0 32.5 52.5 16.4 27.5 49.1 43.7 32.5 24.8 32.1 91.6 82.9 65.0 82.0 130.4 796.5 32.4 19.2 27.5 50.0 44.7 33.1 26.0 33.0 96.2 92.0 65.0 82.0 146.0 814.0 484 351 489 724 1010 1346 1720 1517 2282 2775 3978 4303 8253 29780 420 382 506 745 1054 1346 1379 1581 2352 2900 4048 4315 6736 28455 404 431 521 760 1078 1401 1448 1683 2469 3219 4048 4100 8016 30283 8.2 23.7 18.2 15.2 24.0 41.5 45.2 47.6 20.4 35.0 61.5 52.5 65.8 35.9 8.0 23.3 18.4 15.2 24.1 41.5 55.7 49.2 25.7 35.0 62.2 52.6 51.7 35.7 12.5 22.4 18.9 15.2 24.1 42.3 55.7 51.0 25.7 35.0 62.2 50.0 54.9 37.2
Madhya Pradesh 38.1 Bihar Karnataka 31.9 111.8
Andhra Pradesh 79.3 Gujarat Maharashtra Tamil Nadu India 64.7 82.0 125.4 830.5
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
Source: NHB & DGCI&S
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
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.
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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).
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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.
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Figure IV.9.5: Per Day Average Arrivals of Bananas (Tonnes)
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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.
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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.
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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).
Figure IV.10.2: Procurement and Marketing of Milk by the Cooperative Sector
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.
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.
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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.
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
90
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
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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.
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.
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.
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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.
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.
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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 Situation Analysis Reports

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

Agricultural Outlook and Situation Analysis Reports

Quarterly Agricultural Outlook Report AprilJune 2013

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

I.2 Agricultural Growth Slows in 201213

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

Figure I.1: GDP Growth - Agriculture vs Overall

OVERVIEW OF AGRICULTURAL OUTLOOK

Figure I.3: Agricultural Production Trends

Wheat 80.68 80.80 86.87 94.88 93.62

C.Grains 40.03 33.55 43.40 42.04 39.52

Pulses 14.57 14.66 18.24 17.09 18.00

Potato 34.40 36.60 42.30 41.48 42.48

Onion 13.57 12.16 15.12 17.51 16.82

Bannana 26.20 26.50 29.80 28.46 30.28

Milk 112.20 116.40 121.80 127.90 132.10

I.3 Agricultural Production Outlook for 201314

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

Northwest Central South Peninsula North-East All India

Source: Based on Indian Meteorology Department publications/ data in their website.

OVERVIEW OF AGRICULTURAL OUTLOOK

I.4 The Price Environment

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

banana was registering double digit rate in AprilJune period.

OVERVIEW OF AGRICULTURAL OUTLOOK

13.5 8.5 1.1 7.3 5.1 8.9

12.4 11.6 5.5 5.4 21.8 7.4

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

I.5 Assessment of food commodity prices in the short term

OVERVIEW OF AGRICULTURAL OUTLOOK

Wheat 13.9 12.6 13.8 9.2 20.7 13.5

Maize 11.4 12.0 16.6 10.3 9.9 11.2

Banana 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 8.9 7.3 7.2 -35.7 -34.8 -32.3

Soyabean 31.8 22.9 11.1 8.0 4.1 7.2

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

Note: Projections are in bold.

I.6 Supply demand balance

OVERVIEW OF AGRICULTURAL OUTLOOK

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

Global Economic Context

II.1 Global Agricultural Outlook

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

II.2 Early forecasts point to larger crop production

GLOBAL ECONOMIC CONTEXT

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

Change from previous year*

GLOBAL ECONOMIC CONTEXT

Figure II.1: Global Price Trends of Major Food Commodities

II.4 Price outlook bearish

AGRICULTURAL OUTLOOK AND SITUATION ANALYSIS REPORTS

Mar13 322.79 316.36 274.57 281.09 262.07

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