Kharif 2018-19 Crops Outlook G. Chandrashekhar IMC-ERTF jointly with Economic Policy Committee ‘Inflation Outlook’ May 25, 2018 Kharif 2018-19 Crops Outlook G. Chandrashekhar

Crop Production Trend and Target (Production Mln ton; Area Mln ha) Crop 2018 2017 2016 Target A P A P Rice 98.0 38.8 96.4 38.2 96.3 CrGrn 34.3 18.4 33.2 19.0 32.4 – Maize 19.8 8.1 19.8 8.4 18.9 Pulses 8.9 14.2 9.0 14.7 9.6 Cotton 35.5 12.3 34.9 10.3 32.6

Crop Production Trend and Target (Production Mln ton; Area Mln ha) Crop 2018 2017 2016 Target A P A P Oilseed 25.5 17.3 20.7 19.0 21.5 –Soy . . . 10.6 10.9 11.5 13.2 –Gnut . . . 4.2 7.4 4.7 6.0 SuCane 355 5.0 355 4.6 306 (source: GoI, Agri Min)

Where are the risks? Growers across India angry; some crops sell below MSP; weak procurement (pulses); huge cane arrears; pest attacks (cotton) Expect fall in pulses and cotton acreage; likely increase in oilseeds; Sugar: data not in sync (cause for worry) Wheat: is Agri Min estimate correct? Chana: overestimated

Weather Unseasonal rains in April; crop damage not factored in; SW monsoon forecast: ‘normal’; but temporal and spatial distribution critical No motivating factor for growers to spend on inputs, agronomy MSP not announced as yet

Other risks Rising crude oil prices to push production cost up Depreciating rupee to make imports (edible oil) expensive; (reduce duty?) Are we ready for higher food prices? Political implication?

Thank You G. Chandrashekhar Economic Advisor IMC + Director ERTF Phone: +91 9821147594 email: gchandrashekhar@gmail.com