A bumper kharif harvest, recovery in global food prices may bring cheers to farmers

The UN Food and Agriculture Organization’s Food Price Index has only gone upward in the last three months and annual food inflation based on the global index has also rebounded.

With India reporting a record high kharif sowing which may also lead to a bumper kharif harvest this season and with a recovery in global food prices, Indian farmers are expected to ride high. The UN Food and Agriculture Organization’s Food Price Index has only gone upward in the last three months and annual food inflation based on the global index has also rebounded from negative territory in August, The Indian Express reported, bearing good news for Indian farmers who will be sitting on a good harvest thanks to timely monsoon rainfall and center’s push to agricultural sector in the first four months of the ongoing financial year. 

The international food prices have been volatile for almost a year and while it touched record high since December 2014 in January this year, it continued to slump as the world grappled with coronavirus pandemic. Between August 2019 and January 2020, inflation based on the FPI soared from -1.99% to 9.94%. After a prolonged period of low producer realisations, supplies of many commodities such as palm oil, sugar, rice and skimmed milk powder (SMP) were tightening. 

With the outbreak of coronavirus, the FPI crashed from a 61-month high in January to a 48-month low in May. The same can be attributed to a collapse in world food trade and demand as most countries imposed lockdowns to curb the spread of the novel coronavirus. However, now that the index has been gaining for three straight months viz June, July and August, the same is indicative of a price recovery. In fact, in some commodities such as wheat, soybean, raw sugar, coffee, and cocoa, it is already apparent. The price increase in certain commodities also augurs well for Indian farmers.

Meanwhile, India recorded a record high kharif crop sowing this season on the back of 8.4% above-normal monsoon rainfall and a record 1,095.35 lakh hectares area sown so far, according to the Ministry of Agriculture said on Friday. 

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.