International food prices have fallen for a third consecutive month in June. That, along with the southwest monsoon staging a revival this month, should help ease food inflation pressures in India going forward. The UN Food and Agricultural Organization's (FAO) Food Price Index averaged 154.2 points in June, down from 157.9 in May, 158.4 in April and the record of 159.7 points in March scaled immediately after the Russian invasion of Ukraine. The decline in the FAO index – a weighted average of world prices of a basket of food commodities over a base period value, taken at 100 for 2014-16 – has been led by vegetable oils. Between March and June, the vegetable oil sub-index has dropped 15.9 per cent, from a high of 251.8 to 211.8 points. Given that India imports roughly 60 per cent of its total edible oil consumption, the dip in world prices should have a salutary effect. The Department of Consumer Affairs' data shows the all-India modal (most-quoted) retail prices of soyabean and palm oil to have already come down from Rs 180 and Rs 155 to Rs 160 and Rs 140 per kg, respectively in the last one month. The FAO price indices for cereals and sugar have registered more moderate dips – from 170.1 and 117.9 points in March to 166.3 and 117.3 points, respectively, in June. On the other hand, the indices for both dairy and meat prices have gone up during this period, from 145.8 and 119.3 points to 149.8 and 124.7 points, respectively. FAO attributed the increase in global dairy product prices to low milk production in Europe, aggravated by an early summer heat wave. The surge in meat prices has been “underpinned by the continued tight global supply conditions impacted by the war in Ukraine and the Avian Influenza outbreaks in the Northern Hemisphere”. Meanwhile, farmers in India have sown 406.66 lakh hectares (lh) area under kharif crops in the ongoing planting season, according to the Agriculture Ministry's data released on Friday. This is 9.3 per cent lower than the 448.23 lh covered during the corresponding period of last year. Progressive acreages are down mainly in paddy (from 95 lh to 72.24 lh) and oilseeds (97.56 lh to 77.80 lh), while more or less than same for coarse grains (64.36 lh to 65.31 lh), pulses (46.10 lh to 46.55 lh) and cotton (84.75 lh to 84.60 lh). The above acreage lag has mainly due to weak monsoon activity in June, with all-India weighted rainfall at 152.3 mm being 7.9 per cent below the normal (long period average) of 165.3 mm for the month. Rainfall was, moreover, less than 90 per cent of the historical normal in as many as 24 out of the country's 36 meteorological subdivisions. However, July has seen the monsoon enter an active phase, with the rains being 26.3 per cent above normal in the month so far. As a result, the cumulative monsoon rainfall, at 234.5 mm from June till July 8, has for the first time surpassed the normal of 230.4 mm for this period. The current active monsoon conditions should translate into increased kharif sowings over the next couple of weeks. That, along with global prices falling from their peaks, should hopefully bring food inflation under control in the coming months.
