India plans to share food price prediction tech to neighbours
NEW DELHI: India is willing to offer its South Asian neighbours an artificial intelligence (AI)-based mechanism to predict prices of essential food commodities, a top official said, pointing to a technology that’s helped India tame food inflation.
The first country to receive the technology may be Sri Lanka—a timely help for a country that is emerging from the throes of an economic crisis. In an interview, consumer affairs secretary Rohit Kumar Singh said the mechanism will help India’s strategic partners, including those in its neighbourhood, better plan for demand of essential commodities and plan how much needs to be imported.
India has recently exported onions and rice to strategic partners such as Bangladesh, the UAE, Mauritius, Bhutan and Bahrain. “With the help of an algorithm-based mechanism, the government can now predict the prices of essential commodities for 30, 45, and 60 days in advance with a lot of accuracy. We used this tool to control the prices of tomatoes by selling them in the retail market at a subsidized rate,” Singh said.
Decisions based on the predictive model become key. For instance, high vegetable prices helped fuel overall inflation in July-August. In the wake of rising inflation, the government imposed a ban on rice exports, raised duties on onions and started selling tomato to consumers at a subsidized rate.
As a result, food inflation cooled to 6.56% in September against 9.94% in August on the back of softer vegetable prices. Vegetable inflation in September eased to 3.39% from 26.14% a month earlier.
In January, the government used the technology to predict onion prices for a particular date in March. Once the actual prices came that day, it was able to draw a comparison and make a note of the error.
“So, we have seen that because our system is improving, the error is reducing. This helps us taking the right decision at the right time,” Singh said. “We have showcased this tool to Sri Lankan officials. If neighbouring countries ask for it, we are ready to share the predictive pricing mechanism with them. The tool will work effectively only if the country has its own data.”
Mint on 29 October reported that the government was planning to create an AI-based realtime supply and demand prediction model for agricultural commodities that will factor in externalities like weather and trade-related measures.
The move came after a patchy monsoon disrupted kharif crops, impacting the sowing and vegetative seasons, amid a forecast by economists for farm output growth in 2023-24 to be slower.