Prices of cereals are unlikely to rise further as witnessed in the recent past but may remain elevated well into the next fiscal due to vagaries of climate change, strong global and domestic demand, rating agency Crisil said.

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Domestic production of cereals has grown consistently in the past 50 years. However, prices of cereals have risen faster. The weighted average crop price index for cereal crops logged 3-4 per cent CAGR (Compounded Annual Growth Rate) over fiscals 2017-2022, it said in a report.

Even in the current fiscal, prices of cereals have risen significantly on-year in the first nine months -- of wheat and paddy by 8-11 per cent and of maize, jowar and bajra by 27-31 per cent, it added.

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"....The price sentiment for cereal crops is expected to be strong in absolute terms," Crisil said.

Anticipation of higher production of wheat in current rabi season is expected to improve the stock condition, which may put downward pressure on prices, though heatwaves remain a key monitorable, it said.

For kharif crops such as paddy, maize, and millets, the production expectations would be positive if normal, well-spread monsoon prevails.

"However, prediction of higher chances of El Nino impact on south-west monsoon by the National Oceanic and Atmospheric Administration would be a major monitorable as El Nino had resulted in 14 per cent lower rainfall and a 2-3 per cent lower kharif cereal production during 2015," the report added.

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