Food prices stable as pulses, cereals output rises; sugar rates ease
Pulses production is estimated to rise to a record 27.4 million tonnes (mt) in 2025-26, up from 25.6 mt the previous year, driven by higher output of chana (gram) and moong
Cereals production rose by around 5% to 349.1 mt in 2025-26, from 332 mt a year earlier
Retail food prices, including sugar, have eased on the back of higher domestic output
The improved supply situation is expected to keep food inflation contained in the near term
Advance Estimates of Foodgrain Production
Foodgrain production figures such as those cited for pulses and cereals originate from the Advance Estimates released by the Department of Agriculture and Farmers Welfare (DA&FW), Ministry of Agriculture. These estimates are released in stages (First, Second, Third and Fourth Advance Estimates) through the crop year and are compiled using state-level data, remote sensing inputs, and crop-cutting experiments.
Key Details
- India's overall foodgrain output for 2025-26 is estimated at a record high, with rice, wheat and maize all posting all-time-high production
- Wheat production is estimated at a record 120.65 mt for 2025-26, up 2.29% year-on-year
- Nutri/coarse cereals output is estimated to rise to 74.47 mt from 63.92 mt in the preceding year
- These estimates feed directly into policy decisions on MSP, buffer stocks, exports/imports, and PDS allocation
The 27.4 mt pulses and 349.1 mt cereals figures are drawn from this Advance Estimates framework, which is the statistical basis for the government's claim of eased food prices.
MSP Mechanism and the CACP
The Minimum Support Price (MSP) is the price at which the government commits to purchase specified crops from farmers, intended as a floor price against distress sales. The Commission for Agricultural Costs and Prices (CACP), an attached office of the Ministry of Agriculture, recommends MSPs for 22 mandated crops (14 kharif, 6 rabi, and 2 commercial crops) based on cost of production (A2+FL and C2) and other factors; the Cabinet Committee on Economic Affairs (CCEA) takes the final approval decision.
Key Details
- For Kharif Marketing Season 2025-26, MSP for tur was raised by ₹450 to ₹8,000/quintal, urad by ₹400 to ₹7,800/quintal, and moong by ₹86 to ₹8,768/quintal
- For Rabi 2026-27, chana (gram) MSP stands at ₹5,875/quintal and masoor (lentil) at ₹6,700/quintal
- Budget 2025 announced 100% procurement of the entire marketable surplus of tur, urad and masoor for four years, up to 2028-29, to boost self-sufficiency in pulses
- CACP submits separate Price Policy Reports for Kharif crops, Rabi crops, sugarcane, raw jute and copra
Higher chana and moong output reflects the incentive effect of MSP hikes and the government's pulses self-sufficiency push (Atmanirbharta in pulses), which aims to reduce India's historical dependence on pulses imports.
Buffer Stocking and Price Stabilisation Fund
To smoothen price volatility in essential commodities such as pulses and onions, the Department of Consumer Affairs operates a Price Stabilisation Fund (PSF), under which buffer stocks of pulses are built through domestic procurement (via agencies like NAFED and NCCF) and released strategically to check retail price spikes.
Key Details
- The PSF was set up in 2014-15 to support market interventions for price control of perishable and non-perishable commodities
- Pulses buffer stock releases are typically routed through NAFED (National Agricultural Cooperative Marketing Federation) and NCCF (National Cooperative Consumers' Federation)
- Record pulses production reduces the need for buffer stock market interventions, easing pressure on retail prices
The article's reference to "stable" food prices reflects both higher domestic pulses/cereal output and the cushioning role of buffer stock policy in preventing price spikes.
Ethanol Blending Programme and Sugar Price Dynamics
Sugar retail prices easing alongside higher domestic sugar output is linked to India's Ethanol Blending Programme (EBP), which diverts a portion of sugarcane/sugar output toward ethanol production, affecting the domestic sugar supply-demand and price balance.
Key Details
- The Indian Sugar Mills Association (ISMA) has projected higher gross sugar output for the 2025-26 season (October-September) compared to the previous year
- A portion of sugar output is diverted to ethanol under the EBP, which targets 20% ethanol blending with petrol (E20)
- The government fixes a Minimum Selling Price (MSP) for sugar and periodically revises ethanol procurement prices to balance mill economics between sugar and ethanol production
Higher sugarcane-based output supports both adequate sugar supply (easing retail prices) and ethanol diversion targets, illustrating the dual-use policy trade-off central to India's sugar sector economics.
- Pulses production 2025-26: 27.4 mt (record), up from 25.6 mt in 2024-25
- Cereals production 2025-26: 349.1 mt, up ~5% from 332 mt in 2024-25
- Overall foodgrain production 2025-26: estimated at a record high (~376.56 mt), led by rice, wheat and maize
- Wheat 2025-26: record 120.65 mt (+2.29% y-o-y); Maize: record 55.09 mt (from 43.4 mt)
- Kharif 2025-26 MSP: tur ₹8,000/quintal, urad ₹7,800/quintal, moong ₹8,768/quintal
- Budget 2025: 100% procurement of tur, urad, masoor for four years (till 2028-29)
- CACP recommends MSP for 22 crops; CCEA gives final approval