The Hindu Business Line : Uneven monsoon pushes up farm goods prices

PRICES of various agricultural commodities have shown a tendency to rise on delayed monsoon and uneven rainfall coverage since June 1, the official date for onset of monsoon.

The prices, which reflect the trade's perception about kharif crop prospects, are not showing any signs of tapering off. This is despite the Centre's statement that all is well with the sowing of kharif crops.

The Union Minister for Agriculture and Food, Mr Sharad Pawar, has said that the monsoon was progressing well and there could be a record kharif foodgrain production this year. On Saturday, the India Meteorological Department said rainfall during June 1-July 13 was one per cent below the normal 284.1 mm.

According to IMD statistics, the monsoon has been spread unevenly so far this year. This is one of the reasons for prices to rule firm.

A typical example of the rainfall behaviour is Andhra Pradesh, where the Telangana region has received excess rainfall, while the Rayalaseema region has received normal rainfall.

However, coastal Andhra has experienced deficient rainfall.

Tamil Nadu, eastern Uttar Pradesh, Bihar, Assam, Meghalaya and Marathwada in Maharashtra have all received deficient rainfall.

Though monsoon arrived on time last year, the coverage was affected due to delay in the second spell.

The increase in the prices of some foodgrains can be attributed to a fall in production in the last crop year (July 2004-June 2005).

Prices of wheat, for instance, have currently shot up to over Rs 750 a quintal from around Rs 715 on June 1.

During the same time last year, the prices were a tad below Rs 700. The main cause is that wheat production has been pegged at 72 million tonnes (mt) against 72.11 mt during 2003-04.

Also, the fall in the buffer stocks held by the Food Corporation of India has added fuel to surging prices. The stocks are projected to be around 14 mt as on July 1 against the revised norm of 26.90 mt. Buffer stocks are held by the Government to meet any food emergency arising out of drought or flood.

The rise in sugar rates presents another interesting aspect of the trend.

Sugar prices had begun to decrease after touching Rs 20 a kg on hopes of higher sugarcane production. But floods in Gujarat and deficient rainfall in Marathwada region have led to price recovery with sugar (medium) rising to Rs 1,885 a quintal from Rs 1,808 on June 1.

The increase in edible oil prices has been prominent since the rainfall in key growing areas is still considered insufficient.

Late arrival of monsoon is also feared to affect the oilseed crops yield and that has resulted in the prices ruling firm. Same is the case with cereals and pulses.

However, prices of edible oils are marginally lower than the same period a year ago. This is because oilseed production last year is projected to have increased to 261.03 lakh tonnes from 252.90 lakh tonnes in 2003-04.

Despite the Centre remaining confident about the overall prospects of the kharif crops, trade and industry are of the view that, at least, the production of oilseeds could be hit.

The prices of vegetables have increased sharply since the advent of the monsoon season with rates of onion rising by 50 per cent and that of tomato doubling.

Potato prices have also increased. Tomato prices, which nose-dived during early part of June, have recovered during the period but are still lower than rates during the same period last year.

Prices of food and vegetables have witnessed the sharpest rise as per the inflation data put out by the Ministry of Commerce and Industry on Friday.

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