India Expects Food Prices to Ease as Above-Normal Monsoon Predicted

India’s government anticipates a drop in food prices after the India Meteorological Department (IMD) predicted above-normal monsoon rains, according to the finance ministry’s latest monthly economic review. The report projects increased crop production spurred by the favorablerainfall.

“Further easing of food prices is on the anvil as IMD has predicted above-normal rainfall during the monsoon season, which is likely to lead to higher production, assuming good spatial and temporal distribution of the rainfall,” the March 2024, monthly economic review of the finance ministry said.

Food inflation in India has eased slightly, dropping to 8.5% in March from 8.7% in February. The primary cause of elevated food inflation has been the increased prices of vegetables and pulses. To combat this, the government has implemented measures including stock limits to curb hoarding, bolstering reserves of essential food items, and periodically releasing stocks into the open market.

Additionally, government sources have indicated that negotiations are in progress with emerging markets like Brazil and Argentina regarding long-term pulse importation contracts. Talks are nearing completion for the import of approximately 20,000 tonnes of urad from Brazil, and the government is finalizing negotiations to import arhar from Argentina.