How the Russian-Ukrainian War Should Positively Impact India’s Rural Economy

The ongoing war between Russia and Ukraine is expected to have a positive impact on the country’s rural economy, Mumbai-based brokerage firm Prabhudas Lillladher said in a report authored by research director Amnish Aggarwal. “While the war between Russia and Ukraine has driven up commodity prices, there could be a silver lining for India with rural sentiment and demand picking up in the coming months,” he said. said Prabhudas Lilladher.

The war between Russia and Ukraine has created a silver lining for Indian agriculture by disrupting the global agricultural commodity chain due to supply disruptions and this bodes well for the rural economy, Prabhudas Lilladher said.

“Ukraine is one of the world’s largest exporters of wheat, sunflower, barley, rapeseed and corn with a share of 10%, 47%, 17%, 20% and 14% of world exports. Russia also has a strong presence with world exports of 25%, 18% and 14% of sunflower, wheat and barley. We note that the prices of wheat, mustard, barley, cotton and soybeans increased by 14%, 30%, 76%, 61% and 36%. We believe that rabi crops such as wheat will generate an additional profit of Rs 30,200 crore and main crops Rs 57,800 crore, a 32% increase year-on-year,” said the Mumbai-based brokerage.

The report adds that expectations of a normal monsoon season after the third consecutive normal monsoon will further boost rural sentiment in the coming months.

“Skymet predicted 96-104% APL of monsoons in 2022, which will boost rural sentiments in the coming months. timely monsoons will boost rural demand in the coming months,” Prabhudas Lilladher added.

“Some Mandi participants believe that a sustained disruption to the global supply chain and export demand can push prices up another 20% for wheat, once the harvest season ends,” Prabhudas said. Lilladher in their interactions with rural India experts.

Rural experts have estimated that after the harvest of crops and the clarity of the monsoons, rural demand is expected to rebound strongly, which will launch another round of growth in the economy.

“In Madhya Pradesh, wheat is currently being harvested and trading in a price range of Rs. 22-28/kg against Rs18-19/kg last year, going up to Rs30-35/kg for wheat High quality ‘Sharbati’ Prices of soybeans also surged, trading at Rs 70-80/kg from Rs. important in India, saw a 30% increase in plantings in FY22 compared to FY21 and will be the second largest contributor to farm income this year Mustard prices rose 30% from FY21 at Rs. 50-60/kg at Rs 70-80/kg,” said Prabhudas Lilladher.

The brokerage firm added that employment and wages in rural areas are expected to increase through various infra government initiatives that will increase job opportunities.

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