Rising jowar and small-millet prices, combined with weaker sowing, could push up the cost of cereals, snacks and other millet-based foods
India’s growing appetite for millets is colliding with a tightening supply picture, raising the prospect of higher prices for consumers and food manufacturers in the months ahead.
Millet prices have accelerated as farmers have reduced acreage under several coarse grains during the current sowing season. If supplies remain constrained, the increase could feed through to packaged products ranging from breakfast cereals and bread to biscuits, cookies and snacks.
Jowar prices rose 11% year-on-year in July, accelerating from a 9.7% increase in June and 2.6% in January, according to government data. Small millets recorded an even sharper increase, with prices rising 21.1% from a year earlier in July.
The supply outlook is adding to the pressure. Acreage under small millets stood at about 330,000 hectares as of August 7, down from 388,000 hectares at the same point last year — a decline of nearly 15%.
“For millets, it is a demand-supply thing,” said Madan Sabnavis, chief economist at Bank of Baroda.
Weather disruptions have also played a role. Sabnavis said heavy rains and flooding contributed to a temporary increase in prices, while declining stocks could create additional upward pressure as the year progresses.
Jowar, primarily a rabi crop, could face further price increases as existing stocks are depleted. Manufacturers may therefore have to contend with higher raw-material costs even before the next crop becomes available.
The impact is already visible beyond individual grains. Inflation in ready-made food products climbed to 9% year-on-year in July, up from 6.7% in June, according to government data.
Wholesale prices point to a similar cost squeeze. Jowar wholesale prices increased 13.7% year-on-year in July, while wholesale prices for ragi and barley rose 2.7% and 6.1%, respectively.
Ragi prices at the consumer level increased 6.4% in July, although that was marginally lower than the 6.7% increase recorded in June.
Not every coarse grain is moving higher. Bajra prices declined 0.6% in July, while maize prices fell 0.8%. The acreage picture is similarly mixed: maize planting was down 3.8% year-on-year as of August 7, while the decline in ragi acreage had narrowed to 9.94% from a much steeper 33.2% fall recorded as of July 31.
For food companies, however, the broader trend remains a concern. Millets have moved from niche health-food status into mainstream packaged foods, increasing manufacturers’ exposure to fluctuations in grain prices.
Higher procurement costs could eventually translate into higher retail prices, smaller pack sizes or tighter margins for manufacturers — particularly if demand for millet-based products continues to grow while farmers reduce planting.
The irony is increasingly difficult to miss: as consumers embrace millets as a healthier alternative, the grains themselves are becoming a more expensive ingredient for the food industry.