Prices of Food and Agricultural Products Likely to Remain Firm

New Delhi. Unfavorable weather and monsoon conditions are expected to lead to a decline in the production of Kharif crops, which may keep the prices of agricultural and food products high and firm even after the festive season. Prices of various commodities are beginning to rise in the international market,

while the surge in crude oil prices—partly driven by tensions between Iran and the United States—is increasing maritime freight costs. This could make imports into India more expensive. Furthermore, the Indian rupee’s exchange rate against the US dollar remains in a sluggish state.

While India generally does not import rice or wheat, it records significant imports of edible oils and pulses. Cotton imports are also reaching new record levels.

For the first time in a long period, the duty-free import of 1 million tonnes of raw sugar has been permitted this year. Production of pulses, oilseeds, sugarcane, and cotton is expected to decline this season; consequently, the prices of their value-added products are likely to remain high.