The projected higher foodgrain production in India in 2010-11 could ease food inflation moderately, according to a global research body. "Higher foodgrain production in 2010-11 coupled with agood monsoon bodes well for a moderation in food prices pressure, and would also prompt lower foodgrain imports,"Citi Investment Research and Analysis (CIRA), a division of Citigroup Global Markets Inc, said in a report.
While pulses and wheat prices have already come off, higher production would support some moderation in prices, particularly on sugarcane and fibres, the report said. Giving details, the report said that food inflation has been seeing a steady deceleration to 13 per cent on year-on-year as on March 11 from 18 per cent levels earlier this year.
It further said,"As the largest importer of pulses, record high pulse production could lower import dependence." The report hopes that on the back of a bumper wheat production, the government would lift the export ban on wheat which has been in place since 2007 as well as on non-basmati rice (in place since 2008).
The country is estimated to produce 84.27 million tonnes of wheat in 2010-11 crop year (July-June). According to the Agriculture Ministry's projection the country is estimated to harvest a record 235.88 million tonnes of foodgrains in the 2010-11 crop year.
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