January 12, 2011

India's 2010-11 food grains output seen at 234 million tonnes

India's food grain production is likely to rise 7.2% to 234 million tonnes this crop year through June due to higher sowing, Farm Secretary P.K. Basu said Tuesday (Jan 11).

Higher grain output will help India country control food inflation that has remained stubbornly high since a drought in 2009 clipped farm production.

Food inflation surged to 18.32% on-year in the week ended December 25, from 14.44% the week before. It was the fifth straight week of rising food prices, highlighting persistent pressure in the economy.

Prime Minister Manmohan Singh held a meeting of key ministers and officials Tuesday (Jan 11) to discuss ways to tackle the runaway inflation that has triggered sharp criticism against government policies.

The country is also on track to producing a record wheat crop of 82 million tonnes this year, he said. India produced 80.71 million tonnes of wheat last year.

"The current cold climate is conducive for wheat crop, which is a good sign," Basu said.

India's state-run warehouses are overflowing with wheat and rice stocks, and bumper food grain production may encourage the government to review a three-year-old ban on export of the two staples.

Supplies of pulses, a key driver of food inflation last year, will improve as the country expects to produce a record crop of 16.5 million to 17 million tonnes in 2010-11, Basu said. It produced 14.6 million tonnes in 2009-10. Higher output will reduce imports by the world's largest consumer of the protein-rich staple, he said.

India's summer onion crop was damaged in key growing regions due to prolonged monsoon rains. Pakistan has banned onion exports by land, blocking as much as 3,000 tonnes of the key vegetable at its border from crossing over to India.