Market Intelligence in India Price Linkages and Forecasts

The food prices have become much more volatile in recent years and exhibited extreme instability particularly in the case of vegetables and pulses. High volatility in prices may distort production and investment decisions, leading to inefficient allocation of resources. Managing food price volatility is, thus, a big challenge for policymakers. Farmers benefit from higher prices, but not necessarily from high volatility in commodity prices. Nevertheless, farmers lack information about the expected changes in prices of food commodities. If made aware of the likely trends in future prices, these can guide them to make informed decisions regarding choice of crop, area allocation, timing of sowing and harvest, choice of market and timing of the sale. In order to enable farmers to make informed decisions, the network project on Market Intelligence was undertaken by ICAR-National Institute of Agricultural Economics and Policy Research (NIAP) with 14 collaborating centres across the country and generated price forecasts for important agricultural commodities. The forecasts were disseminated to the farmers before sowing and at the time of harvest. This area of market intelligence holds paramount importance particularly when the Government is committed to enhance the income of farmers. Globally, continuous efforts are being made to capture the trends in prices and commodity outlook/projections to gain from the market dynamics in terms of demand-supply interplay.