Recent Trends in Retail Food Inflation

Retail food inflation has experienced a significant drop, remaining negative for the last four months ending September 2025, contrasting with an average 8.5% annual rise in the consumer food price index from July 2023 to December 2024. This decline is attributed to improved supply pressures due to favorable monsoon seasons following an El Niño-induced drought and high temperatures in 2023-24, as well as a weak price sentiment in agricultural commodities.

Cereal Production and Oversupply

The turnaround in supply is particularly notable in cereals:

• Wheat stocks in government godowns reached 320.3 lakh tonnes by October 1, the highest in four years and over 1.5 times the required buffer.
• The surplus is especially pronounced in rice, with government stocks 4.4 times the strategic reserves needed for public distribution.
• Indian farmers planted a record 44.2 million hectares of rice during the kharif season, a rise from 43.6 million hectares the previous year.

Maize and Price Trends

• Maize area increased from 8.4 million hectares to 9.5 million hectares.
• Wholesale prices in Karnataka and Haryana are around Rs 2,000-2,100 per quintal, less than last year's Rs 2,200-2,300 and below the government MSP of Rs 2,400.

Soyabean Production and Market Dynamics

Soyabean, despite a decline in production, displays bearish price trends:

• Soyabean area reduced to 12 million hectares from 13 million in 2024.
• Production estimated at 105.4 lakh tonnes, a five-year low, due to decreased acreage and yields affected by excessive rainfall, yellow mosaic virus, and fungal diseases.

Market Sentiments and Global Influence

• Soyabean prices are influenced by global harvests in Brazil, the US, and Argentina.
• Export prices dropped from $490 to $398 per tonne between September 2024 and 2025.

Soyabean Processing Economics

The economics of soyabean processing affects the price paid to farmers:

• Processors receive Rs 31.5 per kg from meal and Rs 118 per kg from oil.
• After deducting processing and transport costs, the maximum price payable to farmers is around Rs 42,450 per tonne, matching current market prices.

Challenges and Alternative Feed Ingredients

• Soyabean meal prices are pressured by increased supplies of DDGS, a byproduct of ethanol production.
• Domestic consumption of soyabean meal for feed decreased from 67 lakh tonnes in 2022-23 to 62 lakh tonnes in 2024-25.

Policy Implications and Pro-Farmer Strategies

Amidst low prices for various crops like maize, soyabean, and cotton, the government may shift its focus to support farmers by:

• Restoring import duties on cotton and yellow/white peas.
• Enhancing MSP procurement of pulses and oilseeds.

This strategy aims to balance consumer and farmer interests, especially with potential benefits from recharged groundwater and filled reservoirs due to surplus monsoon rains.