Inflationary pressures attract curbs on agriculture exports, says CMIE
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28/04/2008
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Financial Express (New Delhi)
The inflationary pressure, which has been a constant cause of worry for the government, is expected to attract restrictions on agricultural exports, Centre for Monitoring Indian Economy (CMIE) said in its monthly review. The high international prices and the consequent increase in exports has caused inflation to surge (hovering over 7%) CMIE said, adding that this prompted the government to clamp down on exports of some agricultural commodities in order the improve availability and cool down prices. Demand for agricultural commodities remained strong during FY'08 as reflected in the surging price in the domestic and global Markets. This helped farmers garner higher returns for their goods, CMIE report stated. Demand supply mismatch in the international market, pushed up prices of essential commodities like rice and cotton. In FY'08, cotton price shot up by 14% depending on quality. The high global price made export more remunerative. Non-basmati exports shot up by 55% during April-December 2007 to four million tones. This was a very sharp rise since during the entire FY'07, 3.7 million tonne of non-basmati rice was exported. Cotton exports also increased to 0.96 million tonne in Arpil-December 2007 from 0.56 million tonne in the same period of 2007. India's agricultural output is estimated to have moved up by 2.8% during FY'08 after rising by 4% in the previous year, CMIE report said. The slowdown was on account of the modest increase of 1.2% in foodgrain production. Non-foodgrain output surge by 4.9%. During FY'08, rice production is estimated at 94 million tonne, against 93.35 million tonne in the previous year. Higher acreage accounted for this rise since yield is not expected to show any significant improvement, CMIE said. During FY'08, wheat production is estimated to have crossed 75 million tonne for the second year in a row. In addition to the marginal fall in wheat acreage, a delay in sowing had raised fears of a lower crop.