The year 2012-13 has been a year of phenomenal growth for the Indian agriculture. As per the fourth advance estimates the total food grain production is likely to be 255.36 million MT. Wheat production for 2012-13 is estimated at a record 92.46 million MT and rice is expected to expected to reach 104.4 million MT. over the years Indian agriculture has come a long way on the upward growth cycle. Currently India ranks first in the production of milk, pulses, jute and jute-like fibers; second in rice, wheat, sugarcane, groundnut, vegetables, fruits and cotton production; and is a leading producer of spices and plantation crops as well as livestock, fisheries and poultry. The rapid growth of agriculture is essential not only for self-reliance but also for meeting the food and nutritional security of the people, to bring about equitable distribution of income and wealth in rural areas as well as to reduce poverty and improve the quality of life.
The performance of the Indian commodity market has been exceptional in the year 2012-13. India has improved its position in agricultural and food exports to 10th globally, backed by policy impetus by the government. Total exports of Indian agri and processed food products from April 2012 to March 2013 stood at Rs 11,633,168.41 lakh (US$ 17.26 billion) as compared to Rs 8,248,025.32 lakh (US$ 12.23 billion) during the same period last year. The especial contribution to the export basket was from the spices and processed food sector. India recorded an increase of 22 per cent in the export of spices and spice-based products during 2012-13 to touch 699,170 tonnes, as against 575,270 tonnes in the previous financial year. The Soymeal exports during June 2013 were 213,400 tonnes as compared to 180,900 tonnes in the same period of previous year registering an increase of 18 per cent.
Food security still remains a highly sensitive issue in many parts of the world, especially with India, which has to feed nearly a 1.2 billion population, and it is expected to see a return of government interventions, which could exacerbate food and commodity price volatility. The volatility of commodity prices has always been a major concern of the producers as well as the consumers in an agriculture dominated country like India. The movement in the prices is directly linked to the commodity fundamentals. Fundamentals, including unexpected changes in global economic conditions linked to the strong growth in demand of emerging market economies have played a key role in driving developments in commodity markets. Other factors that have also played a role are supply shortfalls and monetary policy, and in recent years, various ad hoc policy interventions. Price movements have also been exacerbated by various structural problems in the supply and distribution chains of different commodities.