1. Theme address G. Chandrashekhar
IMC Economic Research and Training Foundation Kharif Prospects and Inflation Outlook Mumbai
Theme address
G. Chandrashekhar

2. Why is agriculture important?
Contributes only ~15% to GDP, but employs over 50% of workforce
Critical for ‘growth with equity and inclusiveness’
Southwest monsoon: critical driver of farm output

3. Southwest Monsoon update
As of September 21, all-India area weighted rainfall -5%
28 out of 36 Met subdivisions excess to normal; and 8/36 deficient inc North Gujarat, Punjab, Haryana
SW monsoon set for wtihdrawal

5. Kharif Crop Production Estimate (Ministry of Agriculture) in Million Tons
Crop Target Estmt Rice Maize Pulses Oilseeds Cotton* S’cane * million bales

6. Production Estimate
Spatially and temporally, reasonably well distributed rains, after two years below-normal rains due El Nino; Rebound seen in cereals; Pulses outperform due ‘price effect’ Soybean (14.2 ml t) overestimated? Cane output decline is a concern;

7. Food Inflation Outlook
Food inflation concerns have eased; Fear of price collapse in pulses; may hurt growers; imports need monitoring / regulation; Commodities to watch for upside price risk: Sugar and Wheat
Other risk factors?

8. Other risk factors?
Currency: if rupee weakens, imported foods (edible oil, pulses) will become expensive
Crude oil: if price spurts (say >$50 a barrel), will affect food prices
SW monsoon withdrawal; Rabi planting and winter rains

9. Policy rate
Looking at Kharif crop size, Rabi crop prospects and risk factors, does the situation warrant a policy rate change?

10. Thank You
G. Chandrashekhar Phone: