Tuesday, May 31, 2011

Things that Make You Say Hmmm..."India faces problem of plentiful food"

From the Economic Times:

Is there food shortage in India? Bet you will say yes. After being rammed by inflation, it's natural. But not true. India has no food shortage. On the contrary, we are now faced with the huge problem of plenty.

There is a bumper wheat and rice crop. In Andhra Pradesh, India's rice bowl, production is up 30%. Millers are offering only Rs 8 for a kilo of paddy though the MSP is Rs 10.30. Angry farmers last week threw paddy into the Krishna river. The state government has borrowed Rs 550 crore from RBI for procurement. The FCI can do little. After buying 50 million tonne wheat and rice this season, added to 44 million tonnes left from last year, it is exhausted.

The oilseed crop is 20% larger. Import of palm oil from Malaysia and Indonesia is down for the sixth straight month till April, a three-year low. Sugar output is up 28%. Even exports can't prod the bulls into action....MORE
India's National Commodity and Derivatives Exchange (NCDEX) has an ag futures index called “Dhaanya”.
“Dhaanya” means "Bountiful Harvest" in Sanskrit.