Food prices expected to ease post June with favorable monsoon

• Anticipation of food price reduction post-June, driven by above-normal monsoon forecasts and new import contracts for pulses
• Government initiatives include stock limits, bolstering food item buffers, and streamlining imports through designated channels
• Insights from CRISIL suggest vegetable price moderation post-June contingent upon favorable monsoon distribution

The Indian government anticipates a decline in food prices following the onset of the monsoon season, bolstered by above-normal rainfall forecasts from the India Meteorological Department (IMD) and recent import contracts for pulses. The March 2024 monthly economic review by the finance ministry highlights expectations of increased crop production due to favorable weather conditions, potentially alleviating food inflation concerns in the coming months.

Efforts to stabilize food prices include measures such as imposition of stock limits, bolstering food item buffers, and facilitating imports through designated channels. Negotiations for long-term pulse imports from markets like Brazil and Argentina are nearing finalization, with over 20,000 tonnes of urad to be imported from Brazil and discussions ongoing for arhar imports from Argentina. Additionally, import contracts with Mozambique, Tanzania, and Myanmar further diversify pulse supplies. Insights from CRISIL suggest that vegetable prices are likely to ease post-June, contingent upon favorable monsoon distribution. However, concerns over escalating food prices persist globally, prompting continued efforts to address inflationary pressures.