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LATEST NEWS UPDATES | Strong demand may bring down closing stock of major farm goods by FY23-end -Sanjeeb Mukherjee

Strong demand may bring down closing stock of major farm goods by FY23-end -Sanjeeb Mukherjee

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published Published on Apr 27, 2022   modified Modified on Apr 29, 2022

-Business Standard

Experts feel this could keep prices of major farm commodities and products dependent on them, such as poultry and meat, at an elevated level for quite some time

By the end of this financial year or perhaps even earlier, depending upon the crop cycle, India might be staring at a multi-year low closing inventory levels of several key farm commodities.

Stocks of sugar, wheat, cotton and oilseeds both, with traders and in government-run warehouses are fast depleting due to sharp spike in domestic and export demand and lower-than-anticipated production due to uneven weather conditions.

Several experts feel this could keep the prices of major agricultural commodities and products dependent on them, such as poultry and meat, at an elevated level for quite some time.

Some observers also feel food prices might not come down swiftly even if the current Russia-Ukraine crisis gets resolved in the next few months, because input prices, particularly those of plant chemicals, fertilisers, diesel for irrigation have been rising for almost a year.

“This (impact of rising inputs costs) had to definitely show up in the final farm produce at some point of time, which it is doing now,” a senior agriculture economist associated with a leading think-tank told Business Standard.

While low stock levels and high prices could spur farmers to plant more of the crops mentioned above in the next crop cycle, it can also keep policy makers and the market in a tenterhook over fear of losing the cushion of backup inventory in the event of a bad crop year.

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Business Standard, 27 April, 2022, https://webcache.googleusercontent.com/search?q=cache:https://www.business-standard.com/article/economy-policy/strong-demand-may-bring-down-closing-stock-of-major-farm-goods-by-fy23-end-122042700779_1.html


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