The latest Minimum Support Price (MSP) increases for six rabi crops will likely have a modest effect on retail inflation, according to The ICICI Bank Global Markets report .
The analysis indicates that whilst MSP adjustments influence inflation, their effectiveness is determined by various elements including buffer stock quantities, weather conditions, and supply chain reliability.
The report indicates that adequate reservoir levels and sufficient buffer stocks should maintain stable retail food prices throughout the remaining year, despite the increased MSPs. "However, we expect muted MSP hikes, good buffer stocks and higher reservoir levels to keep retail prices low in the remainder of the year," the report added, as quoted by ANI.
The government declared revised MSPs on October 1, 2025, for the 2026-27 rabi marketing season, implementing increases between 4.0 per cent and 10.1 per cent for crops including wheat, barley, gram, lentils, mustard, and safflower.
Following the Union Budget 2018-19 pledge, MSPs have been established at minimum 50 per cent above the all-India weighted average production costs. The returns exceed production expenses substantially--109 per cent for wheat, 89 per cent for lentils, and 93 per cent for rapeseed & mustard, demonstrating the administration's priority towards profitable farming and crop variety.
For wheat, the primary rabi crop, the new MSP shows a 6.6 per cent rise to Rs 2,585 per quintal. Other increases include barley at Rs 2,150 (+8.6 per cent), gram at Rs 5,875 (+4.0 per cent), lentils (masur) at Rs 7,000 (+4.5 per cent), rapeseed & mustard at Rs 6,200 (+4.2 per cent), and safflower at Rs 6,540 (+10.1 per cent).
The Consumer Price Index (CPI)-weighted average MSP increase is calculated at 5.6 per cent, showing a reduction from 5.9 per cent in 2025-26 and 5.8 per cent in 2024-25.
The analysis indicates that whilst MSP adjustments influence inflation, their effectiveness is determined by various elements including buffer stock quantities, weather conditions, and supply chain reliability.
The report indicates that adequate reservoir levels and sufficient buffer stocks should maintain stable retail food prices throughout the remaining year, despite the increased MSPs. "However, we expect muted MSP hikes, good buffer stocks and higher reservoir levels to keep retail prices low in the remainder of the year," the report added, as quoted by ANI.
The government declared revised MSPs on October 1, 2025, for the 2026-27 rabi marketing season, implementing increases between 4.0 per cent and 10.1 per cent for crops including wheat, barley, gram, lentils, mustard, and safflower.
Following the Union Budget 2018-19 pledge, MSPs have been established at minimum 50 per cent above the all-India weighted average production costs. The returns exceed production expenses substantially--109 per cent for wheat, 89 per cent for lentils, and 93 per cent for rapeseed & mustard, demonstrating the administration's priority towards profitable farming and crop variety.
For wheat, the primary rabi crop, the new MSP shows a 6.6 per cent rise to Rs 2,585 per quintal. Other increases include barley at Rs 2,150 (+8.6 per cent), gram at Rs 5,875 (+4.0 per cent), lentils (masur) at Rs 7,000 (+4.5 per cent), rapeseed & mustard at Rs 6,200 (+4.2 per cent), and safflower at Rs 6,540 (+10.1 per cent).
The Consumer Price Index (CPI)-weighted average MSP increase is calculated at 5.6 per cent, showing a reduction from 5.9 per cent in 2025-26 and 5.8 per cent in 2024-25.
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