'Excess supply of cereals in next 5 yrs'

'Excess supply of cereals in next 5 yrs'

NCAER says demand will outpace supply of pulses

An assessment of medium term outlook of food sector by National Council of Applied Economic Research(NCAER) has projected an excess domestic supply of cereals in the country in the next five to six years while demand is likely to outpace supply in cases of pulses and oilseeds.

The assessment can be proved valuable to the stakeholders and also suggest measures to the government to strike a balance between demand and supply mismatch.
It has projected the demand for vegetable oil to be firm in the medium term, keeping upward pressure on prices in developing countries including India.

The production prospects of major food commodities, including rice, wheat, coarse cereals and oilseeds have been examined by the NCAER.

At the global level, it expects the production of wheat and rice to increase to meet the rising demand, with the overall price situation easing from the recent high commodity prices.

The economic think tank MacroTrack says in its latest monthly report that the demand for livestock feed is projected to increase at a lower rate because of slower growth in demand in the developed economies.

This, it says may ease pressure on coarse grains.

In case of dairy and sugar sectors, the prices are expected to remain firm because of rising cost of dairy products and production fluctuation in the case of sugar.

Having given the projection for several sectors in the medium term, the NCAER has also suggested that further investment in farm sector is needed to tackle yield stagnation and uncertain weather events in order to ensure adequate supply of food.

The report says that while there are opportunities to increase crop area under specific crops by shifting production from one crop to another, the potential for increasing crop area either by increasing net sown area or crop intensity is limited in the medium term.
“This implies that raising productivity per hectare is the best instrument to increase production in the food sector,” the report said. It added that the proposed Food Security Bill of the UPA government, which is set to increase demand for grains, will also require an acceleration in output of food grains.

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