Prices of cereals are unlikely to rise additional as witnessed within the latest previous however could remain elevated nicely into the next fiscal due to vagaries of local weather change, sturdy international and home demand, ranking company Crisil stated.
Domestic manufacturing of cereals has grown persistently up to now 50 years. However, prices of cereals have risen quicker. The weighted common crop value index for cereal crops logged 3-4% CAGR (Compounded Annual Growth Rate) over fiscals 2017-2022, it stated in a report.
Even within the present fiscal, prices of cereals have risen considerably on-year within the first 9 months – of wheat and paddy by 8-11% and of maize, jowar and bajra by 27-31%, it added.
“The price sentiment for cereal crops is expected to be strong in absolute terms,” Crisil stated.
Anticipation of upper manufacturing of wheat in present rabi season is predicted to enhance the inventory situation, which can put downward strain on prices, although heatwaves remain a key monitorable, it stated.
For kharif crops akin to paddy, maize, and millets, the manufacturing expectations could be optimistic if regular, well-spread monsoon prevails.
“However, prediction of higher chances of El Nino impact on south-west monsoon by the National Oceanic and Atmospheric Administration would be a major monitorable as El Nino had resulted in 14% lower rainfall and a 2-3% lower kharif cereal production during 2015,” the report added.
