Understanding Price Dynamics of Major Agricultural Commodities and Identifying Ways to Improve Value Chains in India

The objective of the project is to create monthly stock-to-use variables for twelve primary agricultural commodities so as to understand the historical price movements for those commodities at an all-India level through a monthly balance sheet approach. The commodities are classified into four categories, Pulses (Gram, Tur and Moong), Vegetables (Tomato, Onion and Potato), Livestock (Milk, Poultry meat and Eggs) and Fruits (Banana, Grapes and Mango). Apart from understanding the market behavior through price movements, the project also aims at using the stock-to-use variables to make better inflation forecasts on a monthly basis so as to aid the Reserve Bank in its monetary policy decisions. The project demands four papers one for each commodity group and a fifth paper on methodology. Additionally, a bi-monthly inflation forecast for these twelve commodities is provided to the Monetary Policy Division and the Department of Economic Policy and Research at the RBI.