Thursday, 1 March 2012

India’s total grain output is expected hit a record for the second year in a row

Flashback 2009:

Lester Brown explains that what happens to India’s wheat harvest and its agricultural supply chain, including and in large part due to the resulting effect on food prices, will determine the economic status of everyone everywhere, as scarcity and price pressures alter the base economy of every nation around the world.
Population growth and depletion of water resources are determining the future sustainability of an affordable food supply at high volume. With over 500 million people entirely dependent on the Ganges for drinking water and crop irrigation, even the massive US agricultural export base will not be able to prevent price rises at home.
The one river feeds more people than live in the entire 27-nation European Union. Glacial melt is so severe and the reduction in river flow already so marked that there is no tap water in some districts even within Delhi. Water-scarcity riots are already commonplace as residents scramble to siphon as much clean water as possible from the government trucks that distribute the slim supplies day after day.

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Reality check 2012:

India is reaching records this year in many key agriculture areas, potentially giving rise to more intensification of food crops as the government moves to bolster its food security.

As previously reported in FCI, India has become the world’s largest producer of rice as a result of record production and the lifting of a three-year ban non-basmati rice exports. Rice exports are expected to reach 6 million tons in the 2011/12 growing year compared to 2.2 million tons the previous growing year. Thailand was the world’s top exporter last year, followed closely by Vietnam.

India’s total grain output is expected hit a record for the second year in a row. Agriculture Secretary P.K. Basu said grain output will reach its target of 245 million tons for the growing season ending in June 2012, almost 3.5 million tons more than the production record set in the 2010/11 growing year.

Additional production updates include:- Chili production is expected to rise 10% to 15% compared to last year due to favorable rainfall and temperatures. However, prices for the crop are expected to decline as a result of lower demand domestically and abroad. This year’s relative oversupply could prompt farmers to opt for other crops next year
- A bumper onion harvest and an export ban, which has already expired, has led to price deflation for onion farmers.
- The value of spice exports were up 43% in the last three quarters of last year compared to the same period in 2010, driven largely by heightened demand and price stability for pepper and cardamom.
- Tea prices are likely to rise as a result of early onset of winter in northeast India, which lost 15 million kilograms of the crop. India exported about 990 million kilograms in 2011. Key African producers, including Kenya, are reporting lower harvests as well due to drought, which could contribute to higher tea prices.
- The Indian Council on Agriculture Research is planning to double the production of cashew nuts during the next five years. Powdery mildew disease is the biggest threat to cashew productivity.

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Wheat exports from India, the world’s second-biggest producer, is expected to more than double to 1.5 million tonnes in the 2012-13 marketing year on account of back-to-back record harvest, the US Department of Agriculture (USDA) said in a report.

“Assuming the current export price parity for Indian wheat vis-a-vis other origins, 2012-13 marketing year wheat exports are forecast at 1.5 million tonnes,” the report said.

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