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Agrinews: June 2013

A compilation of major news items relating to the overall farm sector and selected commodities covered under the study “Agricultural

Outlook and Situation Analysis Reports”

Compiled by

National Council of Applied Economic Research11, I.P. Estate

New Delhi 110002

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CONTENTS

Section Title Page No.

Highlights 1

I Broad Sectoral Trends 5

II Agricultural Policy 7

III Rice 12

IV Wheat 20

V Maize /Coarse Cereals 32

VI Pulses 35

VII Edible Oils / Oilseeds 39

VIII Milk 47

IX Vegetables – Potato/ Onoins 51

X Sugarcane / Sugar 54

XI Inputs 68

XII Other Agri Commodities/ News 72

XIII Agricultural / Food Prices 108

XIV Agricultural Commodity Futures 114

Note: Newspapers covered: BL= Business Line, BS = Business Standard, ET= Economic Times, FE= Financial Express

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HIGHLIGHTS

I BROAD SECTORAL TRENDS

India's FY13 GDP growth hits decade low of 5% (ET 31.5.13)

II AGRICULTURAL POLICY

Govt plans to convene special Parliament session to pass Food Bill (BL 13/6/2013)

Food Security Bill would make government the largest hoarder (ET 13/6/2013)

III RICE

Hand-to-mouth buying likely in rice market (BL 3/6/2013)

Punjab, Haryana plan cut in paddy acreage (BS 9.6.13)

Paddy sowing: Farmers face labour shortage in Punjab (ET 14/6/2013)

Rice crop seen at record as early rains spur sowing (BS 14.6.13)

Untimely heavy rains might affect paddy crop in North India (BS 19.6.13)

IV WHEAT

Government's wheat buying may touch 28-30 million tonne this season (ET 29/5/2013)

India may gain little from Japan, Korea ban on US wheat imports (BL 2/6/2013)

Wheat prices shoot up in Punjab, Haryana (BL 2/6/2013)

Wheat trade sees output below 85 mt on lower yield (BL 3/6/2013)

US Department of Agriculture sees India's 2013-14 wheat crop lower than government's estimate (ET 13/6/2013)

Govt research body sees record wheat of 96 mn tons in 2012-13 (ET 21.6.13)

Govt defers decision on wheat exports: KV Thomas (ET 21.6.13)

Black Sea wheat makes Asia comeback after three years (FE 21.6.13)

V MAIZE/ COARSE GRAIN

Rains delay India corn exports, tighten Asia supplies (ET 14/6/2013)

Maize exports up by 24% in FY'13 (BS 20.6.13)

Maize prices likely to ease from August (ET 21.6.13)

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VI PULSES

Gram, its dal prices ease on sluggish demand (ET 27/5/2013)

Weak rupee may turn pulses dear (BL 31/5/2013)

Pulses, oilseeds sowing starts before time (BS 23.6.13)

VII EDIBLE OILS & OILSEEDS

Groundnut oil slips on poor offtake (BL 28/5/2013)

Groundnut oil rebounds on festival demand (BL 3/6/2013)

Edible oils may rise on falling palm oil stocks (BL 6/6/2013)

Oilmeal exports dip 16% in May on lower demand (BL 6/6/2013)

Edible oils extend gains on high currency volatility (BL 11/6/2013)

India's May refined palm oil imports hit record high (ET 13.6.13)

VIII MILK

Ban on milk items imports from China may extend for 1 more year

Mother Dairy hikes milk prices up to Rs 3 per litre from Monday (FE 26.5.13)

IX VEGETABLES/ONION-POTATO

Prices of vegetables & spices crash upto 20% due to the brisk start to monsoon (5/6/2013)

Vegetable, fruit prices heat up as supplies take a hit on excessive rainfall (ET 19.6.13)

X SUGARCANE/ SUGAR

Mills for linking of cane and sugar prices (BS 28.5.13)

Sugarcane acreage likely to fall 10% this kharif season (BS 3.6.13)

Sugar production may fall by 8% to 23.2 million tonnes in 2013-14 (ET 9/6/2013)

Sugar output in Maharashtra seen down 25 per cent y/y (ET 11/6/2013)

Sugar firm on hopes of surge in festival demand (BL 19/6/2013)

Sugar sale under levy for 2011-2012 yet to complete (BS 25.6.13)

XI INPUTS

Fertiliser Ministry open to urea price hike (ET 5/6/2013) Fertiliser firms turn upbeat on sales as monsoon advances (BL 17.6.13)

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XII OTHER AGRI COMMODITIES/ NEWS

Food production looks East (BL 27/5/2013) Pre-monsoon rains lash Kerala: India Meteorological Department (ET

27/5/2013)

Monsoon rains hit southern Kerala (ET 2.6.13)

Imports of edible oils, pulses also rise (BS 3.6.13)

Agro economy of north east region to face flood devastation again (ET 5/6/2013)

Below-normal rain forecast for July, August dampens spirits (ET 5/6/2013)

Early monsoon brightens prospect of bumper kharif harvest (BS 11.6.13)

OECD finds Indian economic growth 'below global trend' (BS 11.6.13)

Outlook for global food markets improves: UN (BL 13/6/2013)

Kharif planting picks up as monsoon advances (BL 14/6/2013)

Monsoon covers entire country but may begin to weaken (BL 16/6/2013)

Climate change could impact food output: World Bank report (ET 20.6.13)

XIII AGRICULTURAL COMMODITY PRICES

Food prices to remain high: RBI (FE 6.6.13) Slow farm growth could raise world food prices, FAO warns (BL 06/6/2013)

Onset of early monsoon set to provide comfort to RBI (BS 12.6.13)

Elevated food prices putting pressure on inflation in India, says RBI (FE 18.6.13)

XIV AGRICULTURAL COMMODITY FUTURES

Govt policies are growth inhibitors of commodity futures

Commodities Transaction Tax likely from July 1 (BL 19/6/2013)

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I BROAD SECTORAL TRENDS

India's FY13 GDP growth hits decade low of 5% (ET 31.5.13)

The GDP of the economy grew at 4.8% in the fourth quarter of FY13, marginally lower than an ET Now poll estimate of 4.9%.

India's Gross Domestic Product (GDP) grew at 4.8% in the fourth quarter of FY13, marginally lower than an ET Now poll estimate of 4.9%. This is a marginal improvement over the Q3 GDP growth rate of 4.7%.

The GDP for the entire FY13 grew at 5%, which is a decade low number. The manufacturing sector of the economy grew at 2.6%.

The consensus estimates of the poll ranged from 4.3% to 5.5%.

India's economic growth was at 6.2 per cent for the 2011-12 fiscal. It had grown by 5.4 per cent, 5.2 per cent and 4.7 per cent in the first, second and third quarters, respectively, of 2012-13, according to data released by the Central Statistical Organisation (CSO) today.

During 2012-13, the sector under review grew by a meagre one per cent compared to 2.7 per cent in the previous fiscal.Mining and quarrying sector contracted by 3.1 per cent during the fourth quarter of last fiscal, as against growth of 5.2 per cent in output in the same period of 2011-12. The contraction in mining sector remained unchanged at 0.6 per cent in 2012-13 over the previous fiscal.

Farm sector output expanded by just 1.4 per cent in January-March this year, as against 2 per cent in the same quarter of 2011-12.

The agriculture sector also grew at a slower rate of just 1.9 per cent in 2012-13 compared to 3.6 per cent in 2011-12.

"The sectoral performance affirms our expectations that while GDP growth remains subdued, a floor is in sight, but lacks signs of sustainable pick up in momentum," said Radhika Rao, an economist at DBS in Singapore.

The data dampened market hopes for another interest rate cut at the central bank's policy review on June 17. The Reserve Bank of India's (RBI) has cut its policy rate by a total of 75 basis points since January to spur economic recovery.

India's benchmark 10-year government bond yield rose to two week high of as much as 7.49 per cent as hopes of another rate cut faded after the GDP data came in line with expectations.

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Worryingly, annual capital investment growth slowed down to 3.5 per cent in the March quarter from 4.5 per cent year-on-year a quarter ago.

Years of fiscal profligacy, a long struggle with high inflation, high interest rates, persistent political gridlock and fragile global economy have put India back in a rut. India has probably surpassed Japan to become the world's third largest economy after the US and China, Paris-based think-tank OECD said earlier this week, even as it lowered the country's economic growth projection for 2013 to 5.3 per cent.

"China will likely pass the United States as the world's largest economy in the next few years and India has probably recently surpassed Japan to be third largest," said the OECD Economic Outlook report.

Until around 2020, China is set to have to highest growth rate among major countries, but could be then surpassed by India, it further said.

OECD also said that by early 2030s, the BRIICS' (Brazil, Russia, India, Indonesia, China and South Africa) combined GDP should roughly equal that of the OECD (based on current membership), compared with just over half that of OECD now.

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II AGRICULTURAL POLICY

Food security law will widen coverage: Minister (BL 27/5/2013)

The proposed food security law and the direct transfer of cash subsidy to beneficiaries’ bank accounts will improve the working of public distribution system and widen coverage, according to Union Food Minister K.V. Thomas.

The Union Government is considering allowing State Governments to directly import the pulses they need for the Public Distribution System. The issue will be taken up before the Cabinet and approved, he said.

There has been some delay and administrative issues in the public sector enterprises in handling the pulses imports, Thomas said.

Addressing the inaugural of a new building for the Regional Office of Food Corporation of India and its Chennai District office, he said the Food Security Bill which is to be discussed in Parliament will cover 67 per cent of the population, about 82 crore people, against 32 crore being covered under the targeted public distribution system now.

Similarly, the proposed direct cash transfer of subsidy to the beneficiaries will be implemented only after 90 per cent of the target population gets a bank account.

While the food distribution infrastructure and system will continue in its present form. Consumers will be able to pay the subsidised price in cash and buy the commodities. The concerns of the State Governments on this issue will be addressed, he said.

The distribution system will also be modernised including introduction of biometric system. The cash transfer will be tested on a pilot basis in the union territories before being rolled out fully.

On the sugar estimates, in the current year sugar production will be about 245 lakh tonnes against 265 lakh tonnes in September-October last.

But against a consumption of about 225 lakh tonnes, there are adequate stocks available and the present system of exports will continue. He ruled out any import duties on sugar, the industry should be happy that the sector has been liberalised, he said.

Govt puts off food security ordinance (BL 4/6/2013)

The Cabinet failed to discuss the food security ordinance here on Tuesday apparently due to the lack of consensus among Congress leadership, the party’s allies and its outside supporters.

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The Food and Consumer Affairs Ministry had sent a note to the Cabinet on Tuesday recommending an ordinance in place of the Food Security Bill, which is under the consideration of Parliament.

A senior Congress leader said the party thought of an ordinance after conflicting signals from the Government’s outside supporter, Samajwadi Party. The SP had said that it will not support Food Security Bill as the legislation was “anti-farmer.”

A meeting of the Congress core committee on Saturday had asked Food Minister K.V. Thomas to prepare an ordinance to implement the scheme.

However, the Cabinet failed to take up the issue as the UPA leadership could not reach a consensus. The party leadership has favoured more discussions with the allies, supporters and Opposition parties to see whether the ordinance route could be avoided.

“There are two options before the Government. The Bill could be passed either in Parliament or the scheme could be implemented by bringing an ordinance. We have not decided whether to call a special session or pre-schedule the Monsoon session,” a Minister said.

He added that Parliamentary Affairs Minister Kamal Nath and Thomas will co-ordinate the Government’s efforts on the issue. The ordinance is not likely to come up in the next meeting of the Cabinet, too.

Civil society activists seek Parliament debate on Food Security Bill (BL 6/6/2013)

Food activists are unhappy with the Cabinet’s reported decision to promulgate an ordinance to bring in a Food Security Bill.

“An issue like food security, which affects millions in our country, requires deep and informed debate in Parliament. When the Monsoon session is just a few weeks away, such a discussion is possible, why then the hurry to pass an ordinance?” said a release by Right to Food Campaign, an umbrella of non-Government organisations.

Among its members are Aruna Roy, Jean Dreze, Kavita Srivastava, Nikhil Dey and Annie Raja.

Amendments

The activists said important parties, including the CPI, CPI (M), Biju Janata Dal, Trinamool Congress and AIADMK, had moved amendments, which need to be heard.

“Most of these parties have placed amendments asking for universal coverage and opposing the reduction of entitlements from 7 kg to 5 kg per month,” they said, adding

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that the main Opposition party, BJP, also wanted to include provisions of the Chhattisgarh Food Security Bill, which was more progressive than the National Food Security Bill.

Flaws in Food Security Bill

Pointing out the flaws in the Bill, the activist said that it did not specify any timeframe for the rolling out of the entitlements in the law, and continues with a targeted public distribution system, excluding 33 per cent of the population.

“The Bill provides only for cereals with no entitlements to basic food necessities such as pulses and edible oils required to combat malnutrition,’’ they said and flayed the provision to allow the entry of private contractors and commercial interests in the supply of food in the mid-day meal and Anganwadi schemes.

Govt plans to convene special Parliament session to pass Food Bill (BL 13/6/2013)

The Government plans to call a special session of Parliament to pass the Food Security Bill after the Cabinet on Thursday deferred a proposal for an Ordinance.

Home Minister Sushil Kumar Shinde, Parliamentary Affairs Minister Kamal Nath and Food Minister K.V. Thomas will hold talks with political parties on convening a special session of Parliament.

The Congress indicated that apart from its allies and supporters, the Opposition Bharatiya Janata Party and the Left parties had also opposed the ordinance route.

A senior Congress leader said some Opposition leaders had contacted Congress President Sonia Gandhi and said the idea for an Ordinance should be dropped. She requested the Government to seek other options too on the Food Security Bill, said the Congress leader.

Officially, the Congress said it was up to the Cabinet to decide on what will be the better option.

“An Ordinance has not been ruled out,” Congress General Secretary Shakeel Ahmed said. He said the Government can decide whether to hold a special session or pre-scheduling the monsoon session.

All the parties except the Left, are supporting the Bill.

The report on the Food Security Bill by the Food and Consumer Affairs Standing Committee of Parliament was prepared with just one dissent note of the CPI(M) member, T.N. Seema.

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“We have accommodated almost all suggestions from the standing committee. We will hold talks with all parties so that the Bill could be debated and passed in Parliament at the earliest occasion,” Food Minister K.V. Thomas told Business Line.

The BJP welcomed the Centre’s decision to defer the Ordinance. The party had called for an advancement of the monsoon session. A section of the Opposition believes that the Ordinance was just a ploy by the Centre to keep the Food Security Bill issue in the public domain.

If the Bill is being taken up in a special session, the BJP will be compelled to support it since it has officially said that it welcomes the legislation.

The ambitious National Food Security Bill, which the Government considers will be a game changer, aims to provide legal rights to about 67 per cent of the country’s population over a uniform quantity of 5 kg foodgrains at a fixed price of Rs 1-3 per kg through ration shops.

Earlier, talking to reporters Finance Minister P. Chidambaram said that the Government would like to make one more effort to seek the Opposition parties’ cooperation in passing the Bill in a special session.

Though the Food Security Bill was tabled in the Budget session, it could not be taken up for discussion because of the Opposition-led disruptions over the coalgate scam.

The Food Security Bill seeks to provide cheaper foodgrains to around 800 million people at an initial cost of around Rs 1.3 lakh crore.

Currently, the Government incurs a subsidy burden of about Rs 1 lakh crore in providing subsidised foodgrains to the poor through the public distribution system.

Implementation of the Bill would also increase foodgrain requirement by around seven million tonnes to about 62 million tonnes.

Food Security Bill would make government the largest hoarder (ET 13/6/2013)

Consumer price inflation for May is 9.31 per cent. The biggest driver has been food

inflation, of which the biggest contributor is cereals and products: 14.74 per cent in rural

areas, a whopping 21.25 per cent in urban areas, together working out to 16.29 per cent

overall. This is unpardonable.

The government has in its stocks 77 million tonnes of grain right now. If grain prices are

still soaring above the birds of the sky, there can only be one explanation:

mismanagement. Those in charge of managing our food stocks have demonstrated utter

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incompetence or criminal negligence. In either case, all those in charge — minister and

babus — should be sacked and, in case of negligence, prosecuted for causing hunger,

malnutrition, scaring an already timid RBI off reducing interest rates and, thus,

contributing toeconomic slowdown.

One excuse the babus have for not getting rid of surplus stocks — in relation to a buffer

stocking norm of 31.9 million tonnes as of July 1 — is their dread of not being able to

show sufficient grain to feed the gargantuan requirements of the food security law being

forced through, at the instance of the UPA chairperson. Hell hath no fury like a UPA

chairperson scorned, the babus tell their insipid minister in charge of food, and, together,

they do nothing, either to estimate the likely requirement of grain as per the food security

law or to sell their stocks in the market to increase availability and reduce the price or at

least the rate of price rise in the case of grain.

The Commission for Agricultural Costs and Prices has done an estimate of the revised

buffer stocking norms. The July target, it estimates, would be 41 million tonnes. Which

still leaves the government with huge surpluses. And this is a danger of the food security

law: of making the government the largest hoarder and pushing up food prices.

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III RICE

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Rice basmati rises on stockists buying (BL 1/6/2013)

Rice basmati prices rose up to Rs 400 per quintal at the wholesale grains market on Saturday on increased demand from stockists and local parties.

However, maize drifted on sluggish demand against ample supplies. Marketmen said increased offtake by stockists to meet rising demand, helped rice basmati prices to rise.

In the national capital, basmati rice (lal quila) spurted by Rs 400 to Rs 10,400 per quintal on stockists buying while rice pusa (1121) traded Rs 50/100 higher at Rs 7,800-8,500 per quintal.

However, maize prices declined to Rs 1,375-1,400 per quintal from Rs 1,415-1,420 due to slackened demand amid higher supplies.

Hand-to-mouth buying likely in rice market (BL 3/6/2013)

Rice market may see only need-based buying and rice varieties may rule with marginal fluctuation in the coming days, said trade sources.

Sluggish demand coupled with easy availability of stocks pulled aromatic and non-basmati rice down by anything between Rs 50 and Rs 300 a quintal on Monday.

Amit Chandna, proprietor of Hanuman Rice Trading Company, said that the lack of buying at all levels pulled rice down.

A fall in prices at this time of the year was unexpected, but traders now believe the market may continue to rule around current levels with marginal fluctuation, Chandna said.

In the physical market, Pusa-1121 (steam) went further down by Rs 200 and sold at Rs 7,900 a quintal while Pusa-1121 (sela) quoted at Rs 7,250 a quintal, down by Rs 150.

Pure basmati (raw) managed to maintain its previous levels and quoted at Rs 9,000 a quintal. Duplicate basmati (steam) traded lower by Rs 100 and was at Rs 6,900 a quintal.

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Punjab, Haryana plan cut in paddy acreage (BS 9.6.13)

With Punjab and Haryana looking to diversify into other crops, both states aim to reduce acreage under water-guzzling paddy by 1.65 lakh hectares during the current kharif season.

With Punjab laying thrust on crop diversification, the state has cut down the target for area under paddy by one lakh hectares to 27.50 lakh hectares for this sowing season from last year's 28.45 lakh hectares.

"As farmers are being encouraged to diversify into other crops, we are targeting 27.50 lakh hectares under paddy crop for current kharif season which is almost one lakh hectare less than what farmers actually brought in last year," said a senior official of Punjab Agriculture department.

Haryana has set a target of sowing paddy over 11.50 lakh hectares in current sowing season as against an area of 12.15 lakh hectares last year.

With possible drop in acreage, rice output of Punjab and Haryana is expected to dip marginally to 110 lakh tonnes and 38.52 lakh tonnes, respectively.

Last season, Punjab and Haryana had a rice output of 113.74 lakh tonnes and 39.76 lakh tonnes.

Together, they contribute 35-40 per cent of rice to the central pool. Paddy sowing will start tomorrow in Punjab and from June 15 in Haryana.

To prevent depletion of underground water table, Punjab and Haryana governments has made it mandatory under Preservation of Subsoil Water Act, not to sow paddy before the recommended period.

With the concern over fast water depletion due to over-exploitation of underground water by farmers for irrigating paddy fields, Punjab and Haryana are encouraging paddy growers to shift to other crops like cotton, maize, sugarcane etc.

Punjab government has already proposed to bring down paddy area by 12 lakh hectares in next five to six years to include maize (4 lakh hectares), cotton (2 lakh hectares), basmati (2 lakh hectares), sugarcane (1.7 lakh hectares) and 80,000 hectares under fruits and vegetables.

Rice market may have bottomed out (BL 6/6/2013)

Lack of bulk buying may keep the rice market under pressure, according to traders. Reduced offtake pulled aromatic and non-basmati rice varieties down by Rs 20-100 a quintal on Thursday.

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Against all expectations, the rice market dropped on lack of buying interest, said Tara Chand Sharma, proprietor of Tara Chand and Sons.

“It’s unlikely to see a major drop from here and the market may take some time to recover,” he said.

Bulk buyers are keeping out of the market, hoping that prices will fall further. Nor are traders showing much interest in selling at current levels, said Amit Chandna, proprietor of Hanuman Rice Trading Company. He said: “It’s hard to anticipate the market’s future as there has been too much volatility over the last few weeks.”Aromatic rice varieties have dropped by Rs 100-300 a quintal over the last 3 weeks. In the physical market, Pusa-1121 (steam) went further down by Rs 100 and sold at Rs 7,800 a quintal while Pusa-1121 (sela) quoted Rs 7,200 a quintal, down by Rs 50.

After ruling flat for almost a month, Pure basmati (raw) dropped by Rs 100 and quoted at Rs 8,900 a quintal. Duplicate basmati (steam) traded Rs 70 down and was at Rs 6,830 a quintal.

Paddy sowing: Farmers face labour shortage in Punjab (ET 14/6/2013)

As paddy sowing is in full swing in Punjab, farmers of numerous villages here have been hit hard by shortage of labourers.

According to farmers, large number of labourers who mostly belong to Bihar and Uttar Pradesh, were away to their respective hometowns and have not returned this time.

They said that fields have been kept ready for sowing paddy, but they could not get labourers for the same.

Ranjit Singh of Tarkhan Majra village said: "My son is a XII class student and I have to seek his help for readying the fields for sowing as I am not able to find labourers."

He further said whatever migrant labourers have come this season preferred to go to progressive and big land holding farmers as they are promising them not only meal along with wages, but liquor as well.

Paddy sowing in Punjab has started on June 10. A farmer Surjit Singh who had come to Sirhind railway station to find labourer said main reason behind labourers belonging to UP and Bihar staying back at their native places is that they are getting jobs in their own cities and towns under MNREGA scheme.

Farmers pointed out that shortage of labourers have also raised the wage cost considerably, thus adding to over input cost.

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At some places, women are also being engaged for paddy transplantation job, farmers said.

Amarjit Singh of village Bagh Sikander says besides women, children are also being engaged in paddy transplantation as there is a summer vacation in schools.

He said farmers are thronging railway station every day but only few labourers are arriving.

A few of them say publication of the ban on early transplantation has also resulted in delay in movement of the labourers from Uttar Pradesh and Bihar.

A senior leader of Bharatiya Kisan Union said the only way out of the labour crisis is mechanised transplantation.

Rice crop seen at record as early rains spur sowing (BS 14.6.13)

Rice output in India, the world's second-largest grower, is set to climb to a record as early arrival of monsoon over the biggest growing regions spurs planting, potentially boosting exports.

The monsoon crop might increase 2.4 per cent to 95 million tonnes from 92.75 million tonnes a year earlier, said P Chengal Reddy, secretary general of the Consortium of Indian Farmers Associations. The crop is planted from June and harvested from October and accounts for 90 per cent of the nation's total production.

A bigger harvest might help India retain its position as the top exporter and further lower global food costs tracked by the United Nations' Food & Agriculture Organization, which fell in May for the first time in four months. While rice prices are poised for a third year of gains in Chicago, corn and wheat have tumbled into bear markets after surging last year. when the worst drought since the 1930s wilted crops in the US.

"Given the forecast for a normal monsoon, the area under rice will certainly be more than last year," Trilochan Mohapatra, director of the Central Rice Research Institute, said in a phone interview from Delhi. "The production of rice is going to exceed" last season's levels, he said.

Paddy worth crores rotting amid rice millers' dispute with TDC (ET 14/6/2013)

Paddy worth crores is rotting here as it has been lying in open due to shortage of godowns even as the the rice millers have not lifted it following a dispute over transportation charges with the Tribal Development Corporation and FCI, official sources said.

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TDC has around 2.2 lakh quintals of paddy worth about Rs 200 crores lying in open at Gondia and Bhandara districts which is rotting due to the onset of monsoon season.Also, 3 lakh quintals of paddy is lying in Gadchiroli and Aheri region, sources said.The millers at Gondia, Bhandara, Gadchiroli and Chandrapur districts are reluctant to lift the paddy while demanding a hike in CMR (Custom Milling Rice) rates and pending transportation payment.

Rice Millers Association, Gondia, secretary Ashok C Agrawal said that their transportation payment of around Rs 70 crores was pending with the agencies and the government since 2009.

He said that in neighbouring Chhattisgarh and Madhya Pradesh, the difference of amount for transportation was borne by the respective state governments and the millers get their money from the government.

Also, around 60 rice millers and Rice Millers Association, Gondia, have filed a petition in the Nagpur bench of Bombay High Court regarding release of pending payments and its first hearing is on June 17.

The paddy lying with the agencies is not even suitable for cattle feed, sources said.When contacted, TDC regional manager J S Rathore admitted that at many places the procured paddy was lying in open as they do not have sufficient godowns.

"Though we have covered the paddy with tarpaulins and tied it, but because of strong breeze and water we are unable to protect it completely. We have apprised about the same to our higher ups at the headquarters and sent a proposal for the construction of 40 odd additional godowns," Rathore said.

On the pending transportation payment, he said, "We have some differences with the millers over the issue and are trying to put things in the right place."

Rice seen range-bound as bulk buyers keep off (BL 17/6/2013)

Rice is likely to be range-bound in the coming days with bulk buyers staying away, according to trade experts.

After witnessing a continuous fall, aromatic and Sharbati varieties recovered marginally, while PR varieties failed to gain due to lack of buying on Monday.

Amit Chandna, proprietor of Hanuman Rice Trading Company, told Business Line that the market has been ruling in a tight range since last week.

Any major alteration in the market is unlikely at present as bulk buyers are still keeping themselves out of the market, he added. Traders expect the market to continue ruling around current levels with marginal fluctuations. In the physical market, Pusa-1121 (steam) recovered by Rs 100 to Rs 7,800-7,830 a quintal, while Pusa-1121 (sela) quoted at Rs 7,200, up Rs 50 from the previous level. Pure basmati (raw) improved by Rs 70 to Rs 8,870. Duplicate basmati (steam) went up by Rs 50 to Rs 6,830.

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For the brokens of Pusa-1121, Dubar quoted at Rs 4,000, Tibar sold at Rs 4,500 while Mongra was at Rs 3,000.

Paddy Sowing

Paddy sowing has started at various places from June 15 and the activity is expected to gather pace in the coming days. (This article was published in the Business Line print edition dated June 18, 2013)

Early monsoon brightens prospect of a better kharif paddy this year (ET 18/6/2013)

With the southwest monsoonarriving on time, eastern states are hoping for a better kharif paddy crop this year. In West Bengal, the leading rice producer in eastern India, chief minister Mamata Banerjee has taken the initiative of sending paddy seeds to farmers well in advance keeping in mind the panchayat elections round the corner.

Dr Trilochan Mohapatra, director, Central Rice Research Institute (CRRI), told ET: "As of now, the monsoon situation looks good and this has raised the expectation of a better kharif paddy this year. Farmers are preparing nurseries.

However, rains should continue till July as well when transplanting takes place. That is the most crucial thing for kharif paddy." Seven eastern states that come under the 'Bringing Green Revolution to Eastern India (BGREI)' programme are Assam, Bihar, Chhattisgarh,Jharkhand, Odisha, eastern Uttar Pradesh and West Bengal.

After the launch of the BGREI programme, rice production in eastern India has gone up by about 30% in the last three years as part of the government's goal to shift rice production from water-starved northern states to water-surplus eastern states.

The seven states produced an average of 42.6 million tonne of rice before the launch of BGREI but now they contribute 55.62 million tonne or over half of the rice produced in the country.

The country produces 105 million tonne of rice annually. The production in the seven states has increased to 46.97 million tonne in 2010-11, 55.27 million tonne in 2011-12, and 55.62 million tonne in 2012-13. Rice is produced on nearly 25 million hectares in eastern India.

Dr Mohapatra said this year's kharif rice production may top last year's. He said the average productivity in eastern India is likely to cross 2 tonne rice per hectare.

Dr Mukund Wariar, officer in charge of Central Rain-fed Upland Rice Research Station, said nearly 50% of farmers in Odisha are preparing nurseries. "In Jharkhand, there were rains in early June. But famers could not take advantage of it because they were not prepared. But in the last two days, there has been a substantial movement among farmers

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to prepare nurseries," Dr Wariar added.

West Bengal director (agriculture) Paritosh Bhattacharya said: "We took a conscious decision last year that farmers should be provided seeds well in advance so that they can start preparing nurseries once the monsoon hits the state.

Untimely heavy rains might affect paddy crop in North India (BS 19.6.13)

Early rain is considered good for paddy. However, in North India, heavy and unusually early rains have raised a red flag for the crop. In many places, farmers who were not expecting heavy rains so early had not even prepared their field for sowing. Also, low-lying areas have been flooded. If things don't improve soon, farmers will have to re-sow."If the fields remain drowned in water for more days, we will have to re-sow and replant. The availability of seeds and other inputs to farmers from the state agriculture departments and agriculture universities can nullify the loss because we have time," said Trilochan Mohapatra, director, Rice Research Institute, Cuttack.

According to Mohapatra, paddy is grown in 44 million hectares in India. Of this, 12 per cent is sown in the rabi season in eastern and southern states. Farmers, particularly in Punjab and Haryana, have their own worries. According to Jagtar Singh Mehma, a farmer from Bhatinda district of Punjab, the untimely rains could affect the crop if they continue for more time. He added that in the low-lying area of Bhatinda, farmers might have to re-sow their fields. Re-sowing in wet fields is done manually.

"Labour is scarce and expensive, so, sowing the crop again would put financial burden on the farmers," Mehma added.

Farmers in Haryana, too, are worried because those with small landholdings cannot afford to incur expenses again. Mohapatra acknowledged that north Indian states are in a more precarious situation than states in the east and south.

He added that the crop size is likely to be 104 million tonnes, if monsoon remains good. In the last two years, India registered the same output of rice.

Taking cognizance of shrinking land under paddy due to rapid urbanisation and industrialisation, Mohapatra said the new improved varieties can push the average yield from 2.5 tonnes per hectare to 3.5 tonne per hectare. Punjab is the only state in India having 3.5 million tonnes of rice productivity.

In times to come, scientific agricultural practices will become indispensable to feed the country, added Mohapatra.

Good rains to usher in record paddy harvest in Chhattisgarh (BS 24.6.13)

The prediction of good monsoon in Chhattisgarh has powered the authorities to set a new record of paddy production in the state also known as rice-bowl of the country.

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The mineral-rich state will produce 7.5 million tonnes of rice in the kharif season 2013 that will be a new record. The officials in the agriculture directorate though initially faltered while setting the target are now confident with the monsoon prediction for the state.

"The weather department had forecasted that the monsoon this year would be good that would help us to achieve the target set for the kharif 2013," Deputy Director in the Agriculture Directorate R K Chandravanshi said. The onset of monsoon in the state had also given a big respite.

The average rainfall of the state is 1327.1 millimeter (mm). As on June 20, the state had already received more than 200 mm-about 17 per cent of the total rains in the first fortnight of the season.

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IV WHEAT

Wheat prices weaken on higher supply (ET 27/5/2013)

Wheat prices weakened by Rs 5 per quintal in lacklustre trade on the wholesale grains market today on adequate supplies against reduced offtake by flour mills.However, other grains moved in a tight range in limited deals and settled around previous levels.

Traders said reduced offtake by flour mills against adequate stocks position mainly put pressure on wheat prices.

In the national capital,wheat dara (for mills) slipped by Rs 5 each to Rs 1,570-1,575 per quintal. Atta chakki delivery traded lower by the same margin to Rs 15,75-1,580 per 90 kg.

The following were today's quotations per quintal: Wheat MP (deshi) 2,000-2,200, Wheat dara (for mills) 1,570-1,575, Chakki atta (delivery) 1,575-1,580 Atta Rajdhani (10 kg) 210, Shakti bhog (10 kg) 210, Roller flour mill 815-825 (50 kg), Maida 840-880 (50 kg) and Sooji 900-950 (50kg).

Basmati rice (Lal Quila) 10,000, Shri Lal Mahal 10,000, Super Basmati Rice, 9,500, Basmati common new 7,900-8,000, Rice Pusa-(1121) new 7,750-8,400, Permal raw 2,300-2,550, Permal wand 2,500-2,600, Sela 3,500-3,600 and Rice IR-8- 1,900-1,950, Bajra 1,500-1,505, Jowar yellow 1,600-1,650, white 2,300-2,500, Maize 1,425-1,430, Barley 1,250-1,255, Rajasthan 1,080-1,090.

Government's wheat buying may touch 28-30 million tonne this season (ET 29/5/2013)

Wheat procurement in the Rabi marketing season 2013-14 is likely to touch 28-30 million tonne. When procurement began in April, the government had estimated to buy 44.06 million tonne wheat this year. "Wheat procurement this season will fall to 28-30 million tonne," said Union Food Minister KV Thomas. He added that since the government was strict with the OMSS price and didn't accept the industry demand of cutting wheat price, private trade have begun procuring in this season.

"It will not make any impact on our schemes as we have an ample stock," he said. On lowering the minimum export price of wheat from $300 a tonne, Thomas said the Group of Ministers will take a decision on the issue in the next meeting. "We are not in a hurry to export. Private trade should not survive on our subsidy," he said.

Food Corporation of India officials said the fall in procurement was not alarming.

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"Average procurement remains at 25 million tonne and the year 2012 was an exception with production increasing by 7 million tonne to 93 million tonne," said an FCI official adding that the minimum support price had substantially risen by Rs 115 to Rs 1,285 a quintal in 2012 compared to 2011. This year, the MSP is Rs 1,350 a quintal.

Wheat arrivals across the country touched 28.44 mt and procurement by government agencies at 24.96 mt on Tuesday.

'Less wheat obtained this year won't impact public distribution' (BL 30.5.13)

The food ministry estimates wheat procurement in the crop marketing season beginning April 2013 to be 28-30 million tonnes (mt), 8-10 million tonnes less than last year's procurement, owing to brisk purchases by private traders.

Just 24.99 mt of wheat has been procured from farmers, with the procurement season in major states such as Punjab, Haryana, Madhya Pradesh and Uttar Pradesh nearly over. During the corresponding period last year, central agencies had procured 33.55 mt.

"We are hopeful we will manage to procure 28-30 mt of wheat from farmers, which is less than last year. This means our efforts to encourage private traders by not accepting their demand to lower the price of wheat sold through the open market scheme has borne fruit," Food Minister K V Thomas told reporters.

He added the lower wheat procurement wouldn't have any impact on the Public Distribution System or any other government programme, including the Food Security Bill, as the Centre had ample stocks in its warehouses. "Usually, in a year, FCI (Food Corporation of India) procures about 60 mt of foodgrains on an average. After the food

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Bill is implemented, this would rise to 62 mt. Therefore, the incremental rise is only about two mt. This can be easily managed, even if procurement falls in a season," Thomas said.

As on May 1, the government's foodgrain stocks stood at 77.55 mt, against a requirement of 21.2 mt. Stocks of wheat are estimated at 37.24 mt, against a requirement of seven mt, while those of rice are estimated at 34.72 mt, against a requirement of 14.2 mt.

On lowering the minimum export price of wheat from $300 a tonne, Thomas said a group of ministers would decide on the issue at its next meeting. "We are not in a hurry to export. Private trade should not survive on our subsidy," he said.

Yesterday, wheat arrivals across the country touched 28.54 mt, while procurement by government agencies stood at 24.96 mt. Though the government claims wheat procurement by state agencies has fallen because of heavy buying by private traders, some experts feel lower-than-estimated production in 2012-13, as well as stock holding by farmers have contributed to the decline. Leading traders, experts and economists say India's wheat production in the 2012-13 crop marketing year isn't expected to be anywhere close to the third advanced estimate of 93.62 mt. In all probability, it would be about 90 mt, as a sudden rise in temperatures in Punjab and Haryana in March and unseasonal rains in Madhya Pradesh in February had reduced the output. Multinational wheat trading companies operating in India have already revised their production numbers for 2012-13 to 86-87 mt, seven to eight mt lower than the previous official estimate.

India may gain little from Japan, Korea ban on US wheat imports (BL 2/6/2013)

Though suspension of wheat imports from the US by Japan and South Korea is likely to offer opportunities to other nations exporting the foodgrain, India is unlikely to gain much from the development.

During the weekend, Japan, the second largest wheat importer in Asia after Indonesia, and South Korea suspended wheat purchases from the US after a non-approved genetically modified wheat was found growing on a farm in Oregon.

The US is nowhere nearer to finding how this happened, though the Department of Agriculture officials said that a probe was on to see how the wheat which has a gene altered to make it resistant to herbicides reared its head. The US has allowed cultivation of various genetically-modified crops such as corn, soyabean, cotton and alfa-alfa grass but not wheat.

As an immediate reaction to the finding of the wheat, prices on the Chicago Board of Trade dropped. However, prices in the other origins such as Europe gained.

“Prices of Europe, Australian and even Black Sea region wheat have gained. But this is likely to be a short-term gain. Once the US comes out with the result of its probe, things could change,” said Tejinder Narang, a consultant with a wheat export firm.

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“Impact on Indian wheat is likely to be minimal since it is treated more as a feed wheat abroad, where the US wheat is a soft one for milling,” he said.

This also means India, which is trying to export more wheat from its warehouses, may not find a buyer in Japan or South Korea in the short-term.

“It will be hard for India to meet Japan’s specifications. They also need a more clean wheat which goes against the Indian grain.

“Though facilities for cleaning wheat have come up at places such as Adani port, they are yet to be accepted,” said Pramod Kumar, Director of Sunil Agro Mills in Karnataka.

“Maybe, Korea could accept our wheat,” he said.

“Even Korea considers Indian wheat for feed purpose only,” said Narang.

“It is not easy for Indian wheat to gain in markets where the look for high-protein produce which the US will be able to deliver. Japan mills have specifications for their products and we won’t be able to meet them,” said M.K. Dattaraj, former president of the Roller Flour Mills Federation of India.

India is looking to export wheat to cut its warehouse stocks. As on May 1, the Food Corporation of India held 11.7 million tonnes of wheat as stocks.

This is almost thrice the norms fixed by the Centre for buffer stocks that help meet any food emergency in the country.

In April, the Government gave its approval to export three million tonnes of wheat but there have been a few buyers for Indian wheat abroad.

This is because India is looking for a price of $300 a tonne that is much higher than the prevailing prices in the global market.

The Government appeared a bit desperate to export wheat since it has estimated the current year’s crop at 93.9 million tonnes.

“Some Indian wheat has been sold at $280 a tonne c&f for delivery in August. This is against $265 quoted for Black Sea region wheat,” said Narang.

Indian wheat is finding its way through West Asian and North African markets. Still, prices are considered high.

Though Indian wheat can be cleaned and efforts could be made for its acceptance for milling by mills abroad, the cost is seenprohibitive.

“There will be at least 2-3 per cent wastage when Indian wheat is cleaned.

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This could mean a loss of $10 a tonne. Even if $7 a tonne premium is given for clean wheat, it will still be a loss proposition,” he said.

“Australia will be able to supply the quality that Japan requires,” said Pramod Kumar.“Canada can also supply quality wheat to Japan. But all these could be short-term developments only,” Dattaraj said.

Wheat prices at the New Delhi Lawrence market, a benchmark for the country, increased to Rs 1,590 a quintal on Saturday.

On the National Commodities and Derivatives Exchange, wheat for delivery in July closed at Rs 1,624.

On the Chicago Board of Trade, wheat July contracts quoted at $7.05 a bushel or $259 a tonne.

Wheat prices shoot up in Punjab, Haryana (BL 2/6/2013)

With wheat arrivals negligible in grain markets, wheat rates in the spot market have risen sharply in the past 10-15 days to Rs 1,550 per quintal in Punjab and Haryana due to expectations of low production.

“Wheat prices have surged in last 10-15 days as the arrivals this year have been lower because of possibility of low production in Punjab and Haryana...prices have reached Rs 1,550 per quintal against Minimum Support Price (MSP) of Rs 1,350 per quintal,” traders said said on Sunday.

Traders further said there was no availability of wheat in the grain markets which had pushed up the prices of the crop.

“Wheat arrivals have almost diminished in Punjab and Haryana, while the demand for crop is still there because of its export allowed by the Centre,” Punjab Roller Flour Millers President Naresh Ghai told PTI.

Though traders refused to accept that farmers had hoarded the crop, there had been some reports from Punjab that wheat growers held back their crop in the hope of getting better rates from export.

“There has not been any availability of wheat in the market as bulk has been bought by the procurement agencies,” he said.

The Centre had allowed export of 5 million tonnes of wheat from its godowns via private trade in order to evacuate old stock in “overflowing” warehouses.

Against the target of procuring 140 lakh tonnes for central pool for current rabi marketing season, the actual purchase for central pool is likely to remain 109 lakh tonnes in Punjab.

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Similarly, in Haryana, the procurement is expected not to cross 59 lakh tonne mark for central pool - much lower than the target of 87.30 lakh tonne.

Last year, the procurement remained high because of record wheat production attained by Punjab and Haryana at 179.82 lakh tonne and 130.69 lakh tonne respectively.

Wheat trade sees output below 85 mt on lower yield (BL 3/6/2013)

Last year, Kapoor Singh of Riwasa village in Haryana’s Bhiwani district had reaped 2.5 tonnes of wheat from every hectare of his10-acre farm. This year, he has got only 1.5 tonnes.

“The crop faced adverse weather conditions in December and again in March. We have also faced pest (yellow rust) problems, resulting in a lower harvest,” Singh said over phone from his village.

Kapoor Singh is among many farmers in Haryana, Punjab and Uttar Pradesh who are reporting lower wheat yield this year.

“Compared with last year, the crop is 25 per cent down in Punjab. But, last year was an exceptional one, where everything went right with the crop,” said Raj Sud, a trader at Khanna market in Punjab.

“The crop is similarly lower in Haryana and Uttar Pradesh too,” he said.

PROCUREMENT

“In Uttar Pradesh, the Food Corporation of India has been able to procure just 5 lakh tonnes-6 lakh tonnes for buffer stocks,” he said.

Though the Government cut its wheat production estimate to 93.62 million tonnes (mt) from initial estimates of nearly 95 mt, traders, exporters and the milling industry say that the output could be far lower.

Last year, production was a record 94.88 mt.

Punjab, Haryana and Uttar Pradesh contribute nearly 60 per cent to the total wheat output in the country.

Punjab’s production this year is estimated at 11.1 mt against 14.82 mt.

“Industry estimates put the production below 85 mt. There are others who have pegged it at 81 mt,” said a trade source, not wishing to be identified.

“We have heard farmers from Punjab telling us that their yield is at least 25 per cent lower this year,” said M.K. Dattaraj, former president of the Roller Flour Mills Federation of India.

Though the Food Corporation had initially fixed a target to procure 44 mt of wheat, it then cut to 33 mt.

However, with procurement almost coming to an end, it could end up procuring around 25 mt only.

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“People are saying that farmers are holding on to wheat. Have our farmers become so resourceful to hold back wheat? Then, we need to review the Food Security Bill,” said the trade source.

According to Tejinder Narang, a consultant with a exporting firm, if procurement has dropped to around 25 mt, it only means a lower crop.

“The Centre should clear the air about wheat production,” he said. “The Government has been blaming the private trade and millers for the low procurement. But our procurement has been the usual quantity,” said Pramod Kumar, Director of Bangalore-based Sunil Agro Foods.

“For us, it is a hand-to-mouth situation since we have not procured over 60 per cent of requirement, thinking prices will drop. But things have taken a different turn,” said Pramod Kumar.

Currently, wheat for milling is quoting at Rs 1,590 a quintal in New Delhi’s Lawrence Road market, a benchmark for the country.

On the NCDEX, July contracts ruled at Rs 1,624.

“At Khanna, there is no arrival of wheat at all. No grower seems to have stock,” said Sud.

Though the Government had allowed export of an additional three million tonnes in April, hardly three lakh tonnes have been exported so far.

“That is because our prices are higher than global prices,” said Narang.

Though the highest bid for wheat at the tender floated by MMTC to sell 50,000 tonnes was $304 a tonne, it is considered high compared with wheat from the Black Sea region.

“Our wheat can become competitive if the rupee falls to Rs 60 against the dollar,” Narang said. The rupee slipped to Rs 56.76/77 against the dollar on Monday, a 11-month low.

Despite fears of lower production, the country could still be left with wheat stocks well above the buffer stock norms fixed by the Government. As on May 1, wheat stocks were over 12 mt against a buffer stock norm of four mt and a strategic reserve norm of 2.12 mt.

These stocks are kept for distribution through ration shops and various welfare measures of the Centre besides meeting any food emergency.

“We think the Government could soon come up with a lower production figure on wheat. But the sooner, it will be better,” said the trade source.

Wheat prices slip on adequate supply (ET 10/6/2013)

Wheat prices declined by Rs10 per quintal in an otherwise steadywholesale grains market today on adequate supplies on increased arrivals from producing regions against reduced offtake by flour mills.

However, other grains moved in a narrow range in limited deals and settled around previous levels.

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In the national capital, wheat dara (for mills) declined by Rs 10 to Rs 1,600-1,605 per quintal.

The following were today's quotations per quintal: Wheat MP (deshi) 2,050-2,250, Wheat dara (for mills) 1,600-1,605, Chakki atta (delivery) 1,585-1,590 Atta Rajdhani (10 kg) 220, Shakti bhog (10 kg) 220, Roller flour mill 815-825 (50 kg), Maida 820-960 (50 kg) and Sooji 915-960 (50kg).

Basmati rice (Lal Quila) 10,400, Shri Lal Mahal 10,000, Super Basmati Rice, 9,500, Basmati common new 7,900-8,000, Rice Pusa-(1121) new 7,800-8,500, Permal raw 2,325-2,575, Permal wand 2,525-2,625, Sela 3,500-3,600 and Rice IR-8- 1,900-1,950, Bajra 1,470-1,475, Jowar yellow 1,600-1,650, white 2,300-2,500, Maize 1,350-1,375, Barley 1,250-1,255, Rajasthan 1,080-1,090.

US Department of Agriculture sees India's 2013-14 wheat crop lower than government's estimate (ET 13/6/2013)

The US Department of Agriculture (USDA) has pegged India's wheat production at 87 million tonne (MT) this year, which is lower by seven per cent from the government's latest estimate of 93.6 MT.

The USDA has revised downward India's wheat production estimate from 92 MT to 87 MT due to lower crop yields. Wheat crop was sown in the 2012-13 crop year (July-June) and is being marketed in 2013-14 starting April.

India's "marketing year 2013-14 production estimate is revised lower to 87 MT due to lower than anticipated yields in major wheat growing states", it said in its latest report.

On the government's wheat procurement, the USDA said it is significantly lower and is estimated to reach 26 MT this year compared to 38.2 MT last year, easing the foodgrain storage crisis, it said.

Wheat exports are also expected to slowdown at 5 MT due to lower government wheat exports, it added.

Citing reasons for wheat production fall this year, the USDA said the preliminary harvest reports from Punjab, Haryana and Uttar Pradesh indicate 8-10 per cent lower yields compared to last year due to smaller kernel size and increase in shrunken kernels compared to last year.

Agricultural experts attribute the lower yield to abnormal winter rains, higher minimum day temperature and higher humidity in February-March.

"These factors together adversely affected tillering, and disrupted the 'normal' ripening process resulting in lower grain setting, smaller grain size and more shrunken kernels. The rains and high humidity also led to higher incidence of rust in north India and lodging in the early harvested wheat varieties," the report said.

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The USDA further said relatively lower market arrivals and government procurement compared to last year have resulted in a downward bias on the production estimates of some industry sources.

Some market sources report that farmers and local traders are holding this year's harvest based on last year's market price trends, it said.

Market sources expect market arrivals to continue after government procurement ends in June as farmers will continue to bring wheat to the market in anticipation of higher prices, it added.

Govt may sell 10 mt wheat from Central pool (BL 18/6/2013)

The Government proposes to offload about 10 million tonnes (mt) of wheat from the Central pool stocks in Punjab to domestic bulk buyers and exporters. This open market sale could help the Government control rising domestic prices on the lower-than-expected crop.

The Food Ministry has moved a proposal that may come up before the Cabinet Committee on Economic Affairs soon. Of the 10 mt, about 8.5 mt would be earmarked for domestic bulk buyers under the open market sale scheme (OMSS) at a likely price of around Rs 15,000 a tonne, official sources said.

Private exporters will also be allowed to access this OMSS wheat for shipments. “We are planning to do away with the ban on exports for wheat sold under the OMSS,” the official said.

The proposed move comes after the Government received a poor response to its recent offer of five million tonnes for exports through private players, as the price fixed was considered higher than global prices.

OFFLOADING PATTERN

The Government also plans to offer about one million tonnes to smaller domestic consumers, four lakh tonnes to State Governments and another one lakh tonne to co-operatives.

Besides, it proposes to release 5 mt for the public distribution system (PDS) sales to poor families. The financial burden of PDS sales is expected to be around Rs 9,471 crore.

Also, the Government plans to export another 2 million tonnes through State-owned trading entities such as PEC, MMTC and STC. So far, these entities have contracted about 4.2 million tonnes for exports and have shipped out about 3.9 million tonnes. The average realisation of these entities has stood at $316 a tonne.

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MILLERS

Even as the Government proposes to offload wheat from Punjab, the millers have urged that they be allowed to lift the stocks from any depot of their choice. “We have written to the Food Minister in this regard and expect to meet him soon,” said Adi Narayan Gupta, President of Roller Flour Millers Federation of India. Such a move is expected to provide the millers quick access to stocks across the country.

Wheat prices have risen by about Rs 150 a quintal in recent months on lower-than-expected crop and farmers holding back their produce in anticipation of better prices in the year ahead. The Government agencies have so far procured about 25.08 mt of wheat, about 32 per cent lower than corresponding last year, as the procurement season has almost come to an end.

Govt research body sees record wheat of 96 mn tons in 2012-13 (ET 21.6.13)

The USDA had recently said that India's wheat output is projected to decline to 87 mn tonnes in 2012-13 due to yield lossses in Punjab and Haryana.

Ruling out any production fall in wheat as estimated by the USDA for 2012-13, a government research outfit DWR today said the country's overall output is expected to be at record 96 million tonnes as yield losses in Punjab and Haryana will be compensated by other states.

In its third advance estimate for 2012-13 crop year (July-June), the government has pegged wheat output at 93.62 million tonnes for 2012-13 crop year (July-June) and crop is being harvested from April onwards.

However, the US Department of Agriculture (USDA) had recently said that India's wheat output is projected to decline to 87 million tonnes in 2012-13 due to yield lossses in Punjab and Haryana due to untimely rains.

Asked about the USDA's forecast, Karnal-based Directorate of Wheat Research (DWR) Project Director Indu Sharma said: "The latest field trial experiments shows that the overall production of wheat could be slightly higher than last year at around 96 million tonnes."

India's wheat production stood at 94.88 million tonnes in 2011-12 crop year.

"Earlier, we anticipated some loss in Punjab and Haryana. But the field trial experiments shows that yield loss in these two states are not significant," she said.

Also, the yield losses in these two states will be compensated by Madhya Pradesh, Rajasthan, parts of Uttar Pradesh and Himachal Pradesh, she added.

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The change in production figures will be reflected in the government's final crop estimate that is due for release by the Agriculture Ministry.

Sharma was here for the launch of a software called 'nutrient expert decision support tools for maize and wheat'.

The software, developed jointly by International Plant Nutrition Institute (IPNI) and the International Maize and Wheat Improvement Center (CIMMYT), will suggest farmers on use of fertilisers especially to wheat and maize crops.

Govt defers decision on wheat exports: KV Thomas (ET 21.6.13)

But the government has approved a proposal to sell 10.5 million tonnes of wheat and rice in the open market to ease prices.

The government has deferred a decision on allowing additional wheat for overseas sales, Food Minister KV Thomas said on Friday, without giving any reason for the decision.

Thomas told Reuters in an interview on Wednesday that the cabinet would be considering the step on Friday.

But the government has approved a proposal to sell 10.5 million tonnes of wheat and rice in the open market to ease prices.

"The government has approved a total of 10.5 million tonnes of grains," Manish Tewari, the information and broadcasting minister, told reporters after a cabinet meeting.

STC gets highest bid at $300/T in wheat export tender (ET 21.6.13)

The State Trading Corp (STC) has received the highest bid at $300 per tonne -- a current floor price -- in its wheat export tender offering 100,000 tonnes on the west coast, trade sources said on Thursday.

STC issued the tender last month offering the grain from government warehouses for shipment by mid-July.

Government-backed traders MMTC, STC and PEC have been floating export tenders to ship out wheat from overflowing government warehouses since mid-2012.

The government has sold almost all the 4.5 million tonnes made available through this channel and could allow another 2 million tonnes under the same mechanism as early as Friday.

Food Minister KV Thomas said on Wednesday the extra exports would have the same $300 per tonne floor price.

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On Wednesday, PEC received the highest bid at $300 per tonne from Dubai-based trading firm Al Ghurair in a tender offering 90,000 tonnes of wheat from the west coast.

In the last tender on May 22, STC received the highest bid at $304.5 per tonne.

Black Sea wheat makes Asia comeback after three years (FE 21.6.13)

Wheat buyers in Asia are looking to replace Indian and Australian cargoes in the lower-end feed grain market with cheaper supplies from the Black Sea, which will be returning to the region after a three-year gap.

But quality-sensitive consumers in Asia are unlikely to substitute their food supplies with Russian and Ukrainian grain despite a ban on US white wheat by major consumers Japan and South Korea.

Thailand and the Philippines have already bought some 200,000 tonne of Black Sea wheat in recent deals for animal feed and traders expect between 2.0 and 2.5 million tonne to flow into Asia in the year to June 2014.

"Black Sea wheat is going to corner the Asian feed market as it is the cheapest origin as of now," said a trading manager with an international trading company in Singapore.

"On the milling side there is not too much excitement but they might sell some cargoes here and there to buyers who use low-quality wheat for blending."

Australia dominated Asia's animal feed market in 2010/11 and 2011/12 as the country produced large volumes of lower-quality wheat after unseasonal rains for two consecutive seasons. India has been aggressively selling cargoes in 2012/13.

But wheat prices in Australia have firmed in recent months as supplies tighten following robust exports since September.

Thailand bought some 150,000 tonne of wheat from the Black Sea region this month at around $280-$285 a tonne, including cost and freight, compared with a similar variety of Indian wheat quoted around $320-$325 a tonne, traders said.

The Philippines took one cargo of around 50,000 tonnes at $282 a tonne.

Ukraine's farm ministry has estimated the country's wheat output will rise to about 20 million tonne this year, up from 15.8 million tonne in 2012. Russia's state forecasterexpects its 2013 grain production to increase 31% to 93 million tonne.

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V MAIZE/COARSE GRAINS

Rains delay India corn exports, tighten Asia supplies (ET 14/6/2013)

Rains across India's eastern crop belt are holding up shipments of corn, tightening feed grain supplies in Vietnam, Indonesia and Malaysia.

Top South American suppliers Brazil andArgentina, which have produced bumper crops this year, are likely to take advantage of the delay to sell larger volumes to Southeast Asian buyers that typically rely on India.

Widespread rains since the beginning of May in India's main winter crop producing state of Bihar have disrupted around 500,000 tonnes of corn shipments that traders have sold to feed millers in Southeast Asia.

"Normally we get the supplies from Bihar in May and June but that hasn't happened this year," said a Singapore-based trader with an international trading company.

"It is unprecedented as we have sold Indian corn to our customers but we are not able to fulfil our commitments."

India, Asia's top corn exporter, produces two corn crops a year. The winter-planted crop usually enters the market in May and contributes 2.5 to 3 million tonnes to the nation's annual output of around 20 to 22 million tonnes.

Indian exporters said the rains were also reducing the quality of corn, which could have a longer-term impact on exports.

"Rains in Bihar have deteriorated the quality of the crop and supplies have come down sharply," said Kanhaiyalal Agarwal, a grain trader based in the southern city of Bangalore.

"The percentage of damage could increase further if rains continue."

Maize rises on stockists buying (ET 18/6/2013)

In limited deals, maize prices were up by Rs 50 per quintal on the wholesale grains market today on fresh buying by stockists largely on rising demand against restricted arrivals from producing belts.

However, other grains moved in a narrow range in scattered deals and settled around previous levels.

Traders said fresh buying by stockists in the wake of pick up in demand from retailers against limited arrivals from producing belts.

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In the national capital, maize prices moved up by Rs 50 to Rs 1,400-1,425 per quintal.The following were today's quotations per quintal: Wheat MP (deshi) 2,050-2,250, Wheat dara (for mills) 1,585-1,590, Chakki atta (delivery) 1,590-1,595, Atta Rajdhani (10 kg) 220, Shakti bhog (10 kg) 220, Roller flour mill 850-870 (50 kg), Maida 910-950 (50 kg) and Sooji 950-975 (50kg).

Basmati rice (Lal Quila) 10,400, Shri Lal Mahal 10,000, Super Basmati Rice, 9,500, Basmati common new 7,300-7,400, Rice Pusa-(1121) new 7,200-8,000, Permal raw 2,325-2,575, Permal wand 2,525-2,625, Sela 3,500-3,600 and Rice IR-8- 1,900-1,950, Bajra 1,460-1,465, Jowar yellow 1,650-1,700, white 2,450-2,700, Maize 1,400-1,425, Barley 1,270-1,275, Rajasthan 1,080-1,090.

Maize exports up by 24% in FY'13 (BS 20.6.13)

Maize exports increased in value terms to $1302 million in 2012-13

India’s maize exports rose 24 per cent to 4.78 million tonnes in financial year 2012-13 due to adequate domestic supply and traders adopting better packaging practices to meet global standards, an industry body said today.

India had exported 3.85 million tonnes of maize (corn) in the previous financial year.

“There has been a substantial increase in maize exports. Production was higher and exporters took measures to improve packaging practices to meet the global standards of shipment,” Indian Maize Development Association President Sain Das said on the sidelines of an event here.

According to the data maintained by the Directorate General of Commercial Intelligence and Statistics (DGCIS), maize exports increased in value terms to $1,302 million in 2012-13, as against $1,075.70 million in the previous year.

Stating that maize production is on the rise every year, Das said production in the 2013-14 crop year (July-June) is expected to increase to 23 million tonnes, as against 21.82 million tonnes in the 2012-13 crop year.

Timely monsoon, adoption of improved technologies like single-cross hybrids and crop management practices would help increase overall production of maize this year, he said. Maize is cultivated twice a year, during summer and winter. India is Asia's largest exporter of the grain, with a major contribution coming from the summer crop.

Karnataka, Maharashtra, Rajasthan and Andhra Pradesh are major producers of maize crop in the country.

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Maize prices likely to ease from August (ET 21.6.13)

Maize prices in India are likely to ease from August onwards as global supply increases making Indian exports unviable due to higher export prices. Maize prices in India are likely to ease from August onwards as global supply increases making Indian exports unviable due to higher export prices. The prices are also likely to be pressurised by expectations of higher kharif production on normal monsoon forecast by Indian Meteorological Department.

Despite bad monsoon, Indian crop output in 2012-13 marketing year ending August 2013 stood at 218.2 lakh tonnes as per the farm ministry's third advance estimate, as against 217.6 lakh tonnes a year earlier. "Global supply of maize is likely to rise following record crop in Argentina and Brazil; who compete with India for exports to Vietnam, Indonesia and Malaysia. Exports from Argentina and Brazil has already started replacing Indian crop due to higher prices," said Mr. Raju Choksi, vice president (agro-commodities), Anil Nutrients Ltd., a subsidiary of the Rs 650 crore plus agro and food processing major Anil Ltd.

Mr Choksi added that with monsoon rains already covering entire country much ahead of schedule and forecast of normal monsoon, acreage and output in kharif 2013 is also expected to be higher, which would further put pressure on the prices going forward. "By August, enough data would be available to know the progress of sowing of maize. If monsoon progresses as per current schedule, the output is likely to be higher by atleast 5-7%, which would impact the prices in subsequent months," Mr. Choksi said.

However, early monsoon has also impacted the rabi crop in Bihar; thereby affecting the Indian exports. Crop quality in Bihar has worsened due to early rains. This is likely to support the prices in the near term; but improved global supply scenario and expectations of higher kharif output would play their part subsequently.

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VI PULSES

Gram, its dal prices ease on sluggish demand (ET 27/5/2013)

In restricted activity, gram and its dal prices fell by Rs 100 per quintal on thewholesale pulses market today owing to sluggish demand.However, other pulses moved in a narrow range in limited deals and settled around previous levels.

Traders said sluggish demand against sufficient supplies mainly kept pressure on gram and its dal prices.

In the national capital, gram, gramdal local and best quality were down by Rs 100 each to Rs 3,300-3,900, Rs 3,950-4050 and Rs 4,250-4,350 per quintal, respectively.

The following were today's pulses rates per quintal: Urad 3,825-4,025, Urad Chilka (local) 4,700-5,050, best 5,150-5,650, Dhoya 5,600-5,800, Moong 5,200-5,600, Dal Moong Chilkalocal 5,700-6,100, Moong Dhoya local 5,850-5,950 and best quality 6,550-6,650.

Masoor small 4,150-4,350, bold 4,300-4,550, Dal Masoor local 4,850-4,950, best quality 4,950-5,050, Malka local 4,600-4,700, best 4,800-4,900, Moth 3,500-4,100, Arhar 4,200-4,600, Dal Arhar Dara 5,900-6,100.

Gram 3,300-3,900, Gram Dal (local) 3,950-4,050, best quality 4,250-4,350, Besan (35 kg) Shakti bhog 1,620, Rajdhani 1,620, Rajmah Chitra 8,250-9,450, Kabli Gram small 3,600-5,600, dabra 2,700-2,800, imported 4,700-5,100; Lobia 4,000-4,900, Peas white 2,650-2,675 and green 2,725-2,825.

Weak rupee may turn pulses dear (BL 31/5/2013)

Pulses and pulse seeds ruled flat in Indore amid subdued demand and buying support.Masoor (bold) ruled at Rs 4,200-50 a quintal, while masoor (medium) ruled at Rs 3,800.Masoor prices have been witnessing a downtrend for the past two weeks on weak demand and buying support.

Arrival of three lakh tonnes of masoor in container on Mumbai port will likely to lend support to bearish sentiment in masoor in near future.

However, given steep depreciation of rupee against dollar and decline in domestic crop output, future of masoor appears to be bullish, if local traders are to be believed.

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A fortnight back, masoor prices had gone as high as Rs 4,300 a quintal with demand outstripping arrivals.

Masoor dal remained unchanged at Rs 4,650-75, masoor dal (medium) at Rs 4,750-75, while masoor dal (bold) ruled at Rs 4,850-75.

Moong ruled steady on weak demand even as arrival of new moong in local mandis is gaining momentum.

On Friday, moong (bold) ruled at Rs 4,800-5,000 a quintal (down Rs 100 from last week), while moong (medium) ruled at Rs 4,300-4,500.

Decline in spot moong also dragged its dal with moong dal (medium) being quoted at Rs 6,300-6,400 (down Rs 100 from last week), moong dal (bold) at Rs 7,000-7,100 (Rs 7,200-7,300), while moong mongar ruled at Rs 7,200-7,300also down Rs 100 from last week.

On the other hand, lack of demand and buying support, has dragged urad by Rs 100-150 with urad (bold) at Rs 3,450 , while urad (medium) ruled at Rs 2,900-3,100.

Urad dal remained unchanged with urad dal (medium) being quoted at Rs 4,000-4,100, urad dal (bold) at Rs 4,600-4,700, while urad mongar ruled at Rs 5,600-5,900 a quintal respectively.

Pulses, oilseeds sowing starts before time (BS 23.6.13)

Among pulses, sowing has started before time in Karnataka, Gujarat, Tamil Nadu, West Bengal and Odisha

Sowing of pulses and oil seeds – the two crops which play an important part in both food and non food inflation-- has started on a brisk note in this kharif season vastly aided by the above average rainfall so far in the main growing areas.

If the weather remains benign in the next few weeks, India’s pulses and oil seeds acreage could exceed normal sowing area.

In the entire kharif season, the total normal area under pulses is around 11.01 million hectares, while it is around 17.9 million hectares under oil seeds. Normal area for any crop is the average area of 5 years from 2007-08 to 2011-12.

According to the latest data from the department of agriculture, pulses have been sown in around 374,000 hectares till June 20. The crop was not sown anywhere across the country in the corresponding period of 2012.

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Oil seeds have been sown in 813,000 hectares till Thursday, almost 161 % more than the same period last year.

Among pulses, sowing has started before time in Karnataka, Gujarat, Tamil Nadu, West Bengal and Odisha. The pulses varieties largely sown in these areas are arhar, urad and moong.

Arhar has been sown in around 78,400 hectares till June 20, while urad has been sown in around 52,400 hectares and moong in around 172,000 hectares.

Among oil seeds, acreage under groundnut and soybean has been more in Gujarat, Karnataka, Tamil Nadu, Odisha and Andhra Pradesh than other areas. The data showed groundnut has been sown in around 555,800 hectares till June 20, almost 152 % more than that of same period last year. Soybean has been planted in around 132,000 hectares, over 700 percent more than last year.

The main reason for this surge in pulses and oil seeds sowing has been the stupendous run of southwest monsoon so far, more importantly over major growing areas of these crops.

According to the latest data from the India Meteorological Department (IMD), rainfall over Gujarat has been 146 % more than normal between June one and 21, while it has been 10-32% more than normal in Karnataka. In Tamil Nadu, the southwest monsoon has been 27% more than normal during the same period, and 23% more than normal in Odisha. Overall across the country, rainfall has been 42% more than normal during June 1-21.

The data showed that among other crops paddy, the biggest foodgrain grown during the kharif season has been sown in around 1.64 million hectares, almost 1.23% more than last year, sugarcane has been sown in around 4.45 million hectares, almost 9.73 % less than last year and cotton has been sown in around 2.81 million hectares, 10.22 % less than last year.

Good rain spurs sowing of pulses, oilseeds (BS 24.6.13)

Sowing of pulses and oilseeds, two crops which play an important part in both food and non-food inflation, has started on a brisk note in this kharif season. Vastly aided by the above-average rainfall so far in the main growing areas. If the weather remains benign in the next few weeks, the normal sowing area could be exceeded. In the kharif season, the normal area under pulses (this definition for any crop is the average of the previous five years) is 11.01 million hectares and 17.9 m ha for oilseeds.

According to the department of agriculture, pulses were sown in 374,000 ha till Thursday. It was not sown anywhere across the country in the corresponding period of 2012. Oilseeds had been sown in 813,000 ha till Thursday, 161 per cent more than in the same period last year. In pulses, sowing has started before time in Karnataka, Gujarat,

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Tamil Nadu, West Bengal and Odisha. The varieties largely sown in these areas are arhar, urad and moong. Arhar had been sown on 78,400 ha, urad in 52,400 ha and moong in 172,000 ha.

Among oilseeds, sowing of groundnut and soybean has been more in Gujarat, Karnataka, Tamil Nadu, Odisha and Andhra Pradesh. Groundnut was sown in 555,800 ha till Thursday, 152 per cent more than in the same period last year. Soybean was planted on 132,000 ha, 700 per cent more than last year.

The main reason for this surge in pulses and oilseeds sowing has been the stupendous run of the southwest monsoon so far, more importantly over major growing areas of these crops. The India Meteorological Department says rainfall over Gujarat was 146 per cent more than the normal over June 1-21, while it has been 10-32 per cent more than normal in Karnataka. In Tamil Nadu, the monsoon has been 27 per cent more than normal during this period, and 23 per cent more than normal in Odisha. Overall, across the country, rainfall was 42 per cent more than normal during June 1-21.

Paddy, the foodgrain grown the most during kharif, had been sown in 1.64 m ha, 1.2 per cent more than last year at this time. Sugarcane had been sown in 4.45 m ha, 9.7 per cent less than last year and cotton in 2.81 m ha, 10.2 per cent less than last year.

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VII EDIBLE OILS & OILSEEDS

Groundnut oil slips on poor offtake (BL 28/5/2013)

Groundnut oil prices declined further on Tuesday on dwindling demand. According to market sources, buyers were absent in retail market as well as in bulk market. Moreover, new summer crop arrival pressurised the oil market.

Groundnut oil loose declined Rs 15 to Rs 995-1,000 for 10 kg, telia tin was down Rs 22 to Rs 1,535-1,536 for 15 kg and groundnut oil new tin decreased Rs 10 to Rs 1,860-1,865. About 10-15 tankers of groundnut oil were traded in Saurashtra.

A Rajkot-based edible oil retailer said that despite lower price, demand for groundnut oil in retail is very nominal. People prefer to buy other edible oils such as cotton oil, palm oil, etc which are cheaper.

Cotton oil price stood at Rs 1,080-1,090 for 15-kg tin and cotton oil wash was Rs 610-613 for 10 kg. About 50-60 tankers of cotton oil were traded from mills in Saurashtra.

A miller said that groundnut oil price is coming down as demand is very poor. Moreover, summer groundnut arrival is increasing which may pressurise the oil price more in coming days.

About 10,000-12,000 bags of new crop arrive every day in Gujarat and are traded at Rs 950-1,000 for 20 kg.

Groundnut surges on cues from Saurashtra (31/5/2013)

Groundnut and cotton refined oil increased Rs 15 and Re 1 for 10 kg each on Friday, tracking spurt in main producing centre, Saurashtra, where groundnut oil shot up further by Rs 20.

Thin volatility in Malaysian palm oil futures and weak domestic currency kept other edible oils unchanged.

Lack of fresh demand from stockists on last day of the month, curbed overall volume.

Sentiment was firm after higher Malaysian palm oil closing, said sources.

Soyabean arrivals were 65,000-70,000 bags including 35,000 bags in Madhya Pradesh and its prices were Rs 3,800 ex-mandi and Rs 3,900 for plant delivery.

Mustard seed arrivals were 2.20-2.25 lakh bags and the prices were Rs 3,020-3,550. Towards the day’s close, Liberty was quoting palmolein at Rs 515-517, super palmolein Rs 553, super deluxe Rs 573 and sunflower refined oil Rs 780.

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Groundnut oil rebounds on festival demand (BL 3/6/2013)

Groundnut oil and cotton refined oil extended gains further by Rs 30 and Rs 2 each for 10 kg on Monday, tracking firm reports from Saurashtra, the main production centre. In Rajkot, the bullish trend in groundnut oil continued on expectations of higher festival demand in the coming days. It rose by Rs 30 on Monday, taking the total rise to Rs 70 for 10 kg in the last two working days. Palmolein rose by Re 1 and soyabean refined oil increase by Rs 2, on the weak Indian currency.

Sources said that despite the start of new month, local demand remained slack. Resale selling pressure and a weak Indian rupee continued to weigh on sentiment.

Oilmeal exports dip 16% in May on lower demand (BL 6/6/2013)

Oilmeal exports fell 16 per cent in May following lower demand, especially from South Korea, Iran and Vietnam.

Exports fell to 3, 02,837 tonnes against 3, 59,855 tonnes in the same period a year ago, according to data released by the Solvent Extractors’ Association.Oilmeal exports in the first two months of the financial year have been dropping.

In April, exports plunged by 51 per cent to 1, 99,168 tonnes.Overall exports in last two months dipped 34 per cent to 5, 02,005 tonnes compared with 7, 62,945 tonnes.

Soyameal exports in April and May dropped 57 per cent to 1, 95,943 tonnes (4, 56,420 tonnes).

Apart from the fall in demand, the weakening of the rupee against the dollar also played spoilsport.

In May, the rupee dipped to 54.98 against the dollar, while it was quoted at 54.32 in April.

Soyabean meal prices were up marginally at $618 (Rs 33,978) a tonne against $616 (Rs 33,868) in April, while rapeseed meal prices were up by $1 at $272.

Iran imports

Oilmeal import by South Korea was down seven per cent at 1,98,367 tonnes (2,12,388 tonnes), which consisted of 68,158 tonnes of rapeseed meal and 1,30,209 tonnes of castormeal. Iran imported 1, 48,234 tonnes (1, 50,974 tonnes) consisting 1, 48,158 tonnes of soyabean meal and a small quantity of rapeseed meal.

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Other shipments

India’s shipments to Thailand were lower at 48,047 tonnes (67,026 tonnes), consisting 9,166 tonnes of soyabean meal and 38,881 tonnes of rapeseed meal.

Vietnam imported of 26,545 tonnes compared to 88,825 tonnes last year, while that of Japan fell to 10,141 tonnes (84,989 tonnes).

Europe and other countries have imported 12,237 tonnes compared to 28,844 tonnes last year.

Mustard, oil stay weak on slack buying (BL 6/6/2013)

The downtrend in mustard oil continued on weak demand. Prices in Indore mandis in the past one week have declined by Rs 8 to Rs 637 for 10 kg. Similarly in Morena, mustard oil declined to Rs 635, down by Rs 5 from the week before. At Neemuch, it fell by Rs 8 to Rs 630 from the past week.

In Rajasthan, however, mustard gained in the local mandis. Prices in Kota and Ganga Nagar reached Rs 640 for 10 kg each, up Rs 5 from the day before.

It also recovered by Rs 5 to reach Rs 650 in Jaipur.

Compared with last week, mustard oil is ruling stable in Kota and Ganga Nagar, while it is down Rs 5 in Jaipur. In Gujarat, mustard oil on Thursday ruled at Rs 620 (down Rs 15 from last week).

Mustard seeds ruled at Rs 4,200-4,300 a quintal (down Rs 200 from last week) on declining buying support, while raida ruled at Rs 3,100-3,200 a quintal (down Rs 100 from last week).

Plant deliveries in mustard seeds for the Jaipur line ruled at Rs 3,510-15 a quintal (up Rs 20 from last week) on improved buying support from millers.

Arrival of mustard seeds across the country was recorded at two lakh bags on Thursday with Madhya Pradesh recording an arrival of 18,000 bags, UP at 20,000, Punjab and Haryana at 18,000, Rajasthan at 1.10 lakh, Gujarat at 13,000, and 21,000 bags from the rest of the country. (This article was published in the Business Line print edition dated June 7, 2013)

Edible oils extend gains on high currency volatility (BL 11/6/2013)

Continued weakness in value of domestic currency against the US dollar supported the edible oils prices to extend further gains. As rupee touched an all-time low 58.96 intraday, it forced local refineries to raise the edible oils rates at Rs 10-17 for 10 kg but improved resale selling pressure curbed prices, said sources.

In Mumbai, palmolein and cotton refined oils were up by Rs 11 each for 10 kg. About 200-250 tonnes palmolein were resale traded at Rs 530-532.

Soyabean arrivals were 90,000- 95,000 bags including 40,000 from Madhya Pradesh at Rs 3,800-3,810 ex-mandi and Rs 3,890-3,890 for plant delivery. Mustard seed arrivals were 1.80-1.85 lakh bags at Rs 3,140-3,625.

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India's May refined palm oil imports hit record high (ET 13.6.13)

India's refined palm oil imports hit a record high in May by jumping 47.5 percent from a month ago, a leading trade body said, pushing total purchases of the tropical oil up for the first time since January on lower prices and tight supplies.

India's refined palm oil imports hit a record high in May by jumping 47.5 percent from a month ago, a leading trade body said, pushing total purchases of the tropical oil up for the first time since January on lower prices and tight supplies.

The world's leading buyer of vegetable oils imported 373,837 tonnes of refined palm oil in May, up for a third straight month, the Solvent Extractors' Association (SEA) said in a statement on Thursday.

The jump in refined palm oil purchases will raise the clamour for increasing import duties to protect local oilseed growers and refiners against cheaper product from major suppliers Indonesia and Malaysia.

But the Indian government is yet to pay any heed as inflation has only just reached comfortable levels.

Total palm oil imports in May stood at 771,869 tonnes, up 54.7 percent from the previous month, the monthly data released by the Mumbai-based trade body showed.

A Reuters survey had forecast average palm oil imports at 770,833 tonnes in May, including 333,333 tonnes of the refined variant.

Groundnut oil drops below Rs 1,000/10 kg (BL 17/6/2013)

Sentiment in edible oils ruled slightly firm on Monday taking cues from higher Malaysian palm oil futures. Palmolein rose by Re 1. The progress of monsoon across the country is giving a fillip to sowing of kharif crops, including oilseeds, capping price rise.Groundnut oil in main producing centres of Saurashtra, Rajkot and in Mumbai dropped below Rs 1,000 as sowing gathers pace.

In Mumbai, groundnut oil lost Rs 20 and rapeseed refined oil declined by Re 1. Soyabean, sunflower and cotton refined oils ruled unchanged.

Analyst said that the jump in Malaysia exports of palm oil products is significant because the numbers for first 15 days are the highest for the past six months.

Latest kharif sowing data suggest that cultivation of oilseeds was flat at 1.5 lakh hectares while for cotton it is higher by 0.63 per cent at 15.80 lakh hectares. Above average rainfall till now has resulted in early planting of crops such as oilseeds and cotton. There has been plenty of rainfall in Maharashtra, Gujarat, Madhya Pradesh, Punjab, Haryana, Rajasthan and other southern states. During the day, about 250 -300 tonnes palmolein

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were traded in resale at Rs 524-525. Liberty sold about 200-250 tonnes super palmolein at Rs 575 and Ruchi sold about 150-200 tonnes soyabean refined oil at Rs 670.

Soyabean arrivals were 60,000-65,000 bags including 35,000 bags from Madhya Pradesh and its prices were Rs 3,800 ex-mandi and Rs 3,925 for plant delivery. Mustard seeds arrivals were 1.70 lakh bags-1.75 lakh bags including 95,000 bags from Rajasthan at Rs 3,175-3,600.

Soya rules flat despite global cues (BL 17/6/2013)

Soya oil and soya seeds ruled flat on subdued demand and buying support despite strong global cues.

Even as crude palm oil on Bursa Malaysia Derivatives Exchange closed higher, soya oil ruled at Rs 675-80 for 10 kg on slack and scattered buying support, though majority of buying in soya refined was seen at Rs 675-77.

Soya solvent also traded marginally lower at Rs 646-47 (Rs 645-50) on slack demand.

However, compared to last week, soya oil is ruling Rs 5 higher. Demand in soya oil continues to be slack for the past sometime on weak demand strong buying support in cotton oil which is reasonably cheap compared to soya oil.

Soya oil on the other hand traded higher on rise in buying support and strong global cues with its June and July contracts on the NCEDX closing at Rs 715 and Rs 700.40 respectively.

Soyabean prices also ruled firm at Rs 3,750-3,850 a quintal amid arrival of 35,000 bags in mandis across Madhya Pradesh. Compared to last week, soyabean is ruling Rs 25-50 higher amid weak arrival and strong global cues.

Plant deliveries in soyabean ruled at Rs 3,850-3,950 (up Rs 50 from last week).

In futures, soyabean traded higher on strong buying support and global cues.

Demand unlikely to emerge for groundnut oil (BL 18/6/2013)

Groundnut oil traded lower in Rajkot on lack of demand and higher selling interest.Buyers were reluctant to make fresh purchases due to persistent downtrend.According to market sources, groundnut oil prices may decline further as demand is unlikely to emerge for now.

A Rajkot-based edible oil trader said that retail demand was poor and re-packers and brand manufacturers also were not so active in the market.

On the other hand, lack of export business in peanuts too pressurised the groundnut oil prices as it has increased availability of groundnut for crushing.

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Groundnut arrivals were reported at 2,500 bags from Rajkot, 8,000 bags from Gondal and 960 bags from Jamnagar.

HPS Saurashtra origin bold 50-60 count was offered at Rs 72,000 a tonne and Rajasthan origin 50-60 count was offered at 75,000.

(This article was published on June 18, 2013)

Edible oils: Festival demand raises investors’ expectations (BL 18/6/2013)

Edible oils prices edged higher on Tuesday expectation of higher demand ahead of Ramadan next month.

Weakness in domestic currency against the US dollar making import costly and fear of supply disturbance, quality problems due to heavy rain in main producing centres have lent support to the buying sentiment.

Palmolein and sunflower oil rose by Rs 6 and Rs 5 each. Soyabean and cotton refined oil increased by Rs 2 each. Groundnut oil Rajkot rose by Rs 10 while in Mumbai, it ruled steady. Rapeseed oil was unchanged.

Volume remained thin on slack demand. Exports of Malaysian palm oil in the first half of June surged 19 per cent as buyers stocked up for Ramadan in July.

During festive season, demand is expected to pick up from Pakistan, India and the West Asia. Production is not coping with the exports, so traders expect end-stocks to go down further in June, said an observer.

Vidarbha farmers may shift to Soya crop this Kharif season (ET 19.6.13)

The total cotton sowing area is likely to be reduced by 10 lakh hectares from 40 lakh hectares on one hand.

Large number of traditional cotton growers in Vidarbha region may shift to soya this Kharif season as croping pattern was set to change after the onset of monsoons, according to agriculture experts.

The total cotton sowing area is likely to be reduced by 10 lakh hectares from 40 lakh hectares on one hand and an increase by the same numbers in soya cultivation area may take place, since soya was a cash crop and yield was satisfactory in terms of acerage, they said.

"The shift from cotton could be more than the 10 per cent that was anticipated initially," said Maharashtra State Cotton Growers' Co-operative Narketing Federation sources.

"One of the reasons could be the failure of the government to announce the minimum

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support price (MSP). This has fuelled fears that it may not fetch much more than Rs 3,900 a quintal it got last year. If a farmer knows before hand the price, it helps him decide which crop to go for. Cotton growing has become costly and returns are poor," sources said.

Vidarbha Jan Andolan Samiti President Kishore Tiwari said this year a good beginning in the monsoons has helped farmers to kick start kharif operations on time.

"But cotton, which for many years has been the main cash crop of Vidarbha, may giveway to soyabean this year. Poor sales and demand for cotton seed in western Vidarbha's Amravati division indicates that farmers could shift from cotton to pulses like tur, chana and even linseed besides soyabean," Tiwari told PTI.

Confirming a lesser interest for cotton by farmers, a senior government official from Amravati division said that soyabean looks to be the preferred crop this year.

"The picture will be clear in only later this week. Farmers initially just make rounds to dealers to look around and do not buy anything. They take couple of days before deciding and then finalise on the crop," he said.

Edible oils slide on sluggish demand, global cues (ET 19/6/2013)

Select edible oil prices fell by Rs 50 per quintal on the wholesale oils and oilseeds market today owing to slackened demand at prevailing higher levels amid a weak global trend.

However, non-edible oils continued to trade at previous levels in restricted activity.

Traders said slackened demand at prevailing higher levels amid a weak global trend on speculation that a rally to the highest level in almost three months was overdone, mainly influenced the sentiment.

Meanwhile, palm oil for the contract for September delivery dropped 0.8 per cent to 775 dollar a metric tonne on the Bursa Malaysia Derivatives.

In the national capital, mustard expeller (Dadri) and cottonseed mill delivery (Haryana) oils shed Rs 50 each to Rs 6,600 and Rs 6,200 per quintal respectively.

Soyabean refined mill delivery (Indore) and soyabean degum (Kandla) oils also declined by Rs 50 each to Rs 7,500 and Rs 7,100 per quintal respectively on weak global cues.

Palmolein (rbd) and palmolein (Kandla) oils followed suit and traded lower by the same margion to Rs 5,750 and Rs 5,350 per quintal respectively.

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Hopes of higher oilseeds output may cool edible oils (BL 19/6/2013)

Barring soya refined oil which rose by Rs 3 and groundnut oil that declined by Rs 20, other edible oils ruled steady on Wednesday tracking steady Malaysian palm oil futures. Investors awaited clarity on whether the US Federal Reserve will trim its stimulus programme, after a two-day meeting.

Sources said, that due to rain and after sufficient covering in the last few days, activities remained subdued this week.

About 200-250 tonnes palmolein were trade in resale at Rs 528-530. Ruchi sold about 150-200 tonnes soyabean refined oil at Rs 677 for delivery up to July. Good progress of monsoon across the country and hope of higher oilseeds production this year have put pressure on indigenous edible oils such as groundnut, cotton and sunflower oil.

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VIII MILK

Four milk plants to come up in Punjab (BL 27/5/2013)

Punjab Deputy Chief Minister Sukhbir Singh Badal on Monday gave nod to expansion plan of state-owned Milkfed entailing setting up of four mega milk plants of Rs 250 crore each in the state.

Reviewing the working of Milkfed, the Punjab Deputy Chief Minister said that his aim was to make Verka products as a largest selling brand and that could be realised only by giving a big push to expansion of Milkfed.

He said that the expansion plan would focus on right from encouraging dairy sector, setting up organised dairy farms, reorienting procurement of raw milk, scientific collection and chilling chain, ultra modern milk processing facilities, value addition of milk products and effective marketing network to exploit the brand image of Verka.

Stressing upon the need for strengthening dairy sector from grass root level, Badal also approved a specialised scheme for encouraging women in the dairy sector that would provide subsidised loan to them to set up farms, technical know how for setting up of dairy farms and support to such units by providing veterinary care and farm feed to dairy entrepreneurs.

He asked S K Sandhu, Principal Secretary Cooperative to put up a proposal for giving dairy sector equivalent status of agriculture for the purpose of bank credit.

Approving the setting up of 4 mega milk plants of Rs 250 crore each in the state, Badal said, “we have to increase the processing capacity four-fold and these plants should be of international standards with ISO 9002 specifications.”

Expressing concern over shortage of green fodder especially during summers, Badal said that new diversification plan has a special incentive for the farmers, who would switch over from Paddy or wheat farming to complete fodder farming.

Concerned over low penetration of dairy sector in the rural economy, Badal said that out of Rs 33,000 crore milk markets, the share of organised sector was 30 per cent and out of which Milkfed’s share was only 17 per cent.

Milk price may rise by Rs 1-2 a litre in Punjab, Chandigarh (BL 29/5/2013)

Consumers in Punjab, Chandigarh and few places in Himachal Pradesh will have to pay more for milk as state-owned MilkFed is likely to hike retail prices by Rs 1-2 per litre next month, amid rising input costs.

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“Hike in milk price has become absolutely necessary as there is an increase in overall input cost and shortage of milk is also being felt (during summer season). Moreover, we are also supplying milk at much lower rate (than other milk producers),” Punjab State Cooperative Milk Producers Federation (MilkFed Punjab), MD, Alaknanda Dyal told PTI here today.

Though she refused to divulge quantum of increase in retail milk rate to be made, official sources said that milk prices are expected to be jacked up by Rs 1-2 per litre.

“Our milk price increase will be lesser than what Mother Dairy had raised few days ago,” Dyal said. Mother Dairy has increased milk prices by up to Rs 3 per litre in Delhi and NCR region.

MilkFed, which sells milk under Verka brand, has raised milk procurement prices by Rs 30 per kg fat during last month for milk producers in order to boost milk supply.

“MilkFed is paying Rs 410-420 per kg fat to dairy farmers as against earlier rate of Rs 370-390 per kg fat,” an official said.

The ongoing intense hot conditions prevailing in northern region has also taken a toll on the availability of milk with MilkFed’s daily milk procurement dipping by 7-8 per cent as compared to milk purchase in the month of April.

“Our daily milk procurement is at present 10.50 lakh litre a day as against 11.55 lakh litres in the month of April,” an official said. “Because of heat stress during summer, the milk production usually goes down considerably,” he added.

Meanwhile, commercial dairy farmers have sought substantial hike in milk procurement prices from MilkFed to which they supply about 3 lakh litres a day.

“The present milk procurement prices are grossly insufficient to cover our cost...we demand prices be raised to Rs 510 per kg fat as done by Rajasthan state,” said Punjab Progressive Dairy Farmers Association, Daljeet Singh said.

“Our input cost has increased by Rs 6 per litre of milk. Therefore, MilkFed is required to raise retail rate by at least Rs 4 per litre to cover the cost,” he said.

Dairy farmers further said that with price of skimmed milk powder going up sharply to Rs 190-200 per kg, the MilkFed, which has about 5,000 tonne of SMP in its stock, should think over paying higher rates which could enable farmers to sustain their venture.

MilkFed, which is the biggest player in the organised dairy market in Punjab, gets milk from about 4 lakh small and big farmers.

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Ban on milk items imports from China may extend for 1 more year

India had imposed ban on Chinese milk and its products in September 2008 due to presence of melamine, used for making plastics and fertiliser.

An inter-ministerial panel has recommended extending ban on imports of milk and its products from China for one more year as the neighbouring country has not provided any data addressing the safety concerns.

India had imposed ban on Chinese milk and its products in September 2008 due to presence of melamine, used for making plastics and fertiliser. The ban has been extended every year and will expire on June 23, this year.

"Ban on import of milk and milk products from China may be extended for a period of one year from June 23, 2013 unless there are dependable reports available about a significant improvement in the situation," said an advisory issued by the Food Safety and Standards Authority of India (FSSAI) after the inter-ministerial committee (IMC) meeting.

The committee, headed by FSSAI chief, met early this month to review the ban on Chinese milk products like chocolates and chocolate products, candies, confectionary, and food preparations made with milk or milk solids.

"The IMC recommended extension of ban because China has not been able to provide required data showing improvement in the situation with regard to milamine content," a senior FSSAI official said.

However, the final call on this issue will be taken by the Directorate General of Foreign Trade (DGFT) under the Commerce Ministry, he added.

More than a dozen countries in Asia and Africa have banned milk and dairy product imports from China due to melamine content, the dangerous chemical that can cause kidney stones as well as failure of the organ.

India, the world's largest milk producer, does not import milk products from China, but the ban is being imposed as a preventive measure.

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The country's milk production is estimated to be 133 million tonne in 2012-13.

Mother Dairy hikes milk prices up to Rs 3 per litre from Monday (FE 26.5.13)

Mother Dairy today announced an increase of up to Rs 3 per litre in milk prices in Delhi-NCR region from tomorrow, citing rise in input costs.

Full cream milk will be dearer by Rs 3 per litre, while other variants will be costlier by Rs 2 per litre.

One litre of full cream milk (poly pack) will now cost Rs 42, toned milk (poly pack) Rs 32, token milk Rs 30, double toned Rs 28. However, prices of skimmed milk have been kept unchanged at Rs 22 per litre, Mother Dairy said in a statement.

Mother Dairy, the largest supplier of milk in the Delhi-NCR, sells more than 30 lakh litres per day (both loose and poly-pack) in the region.

"Price hike has been necessitated due to significant increase in raw material costs (farmer prices) by almost 10 per cent over last year, power tariffs, petroleum prices and other costs," the company said.

Prices have been increased to maintain viability of operations and to be able to adequately cater to the growing liquid milk demand of the consumers in NCR, it added.

Early this month, Amul had increased milk prices by Rs 2 per litre.

The company in statement said it "passes on 75-76 per cent of the consumer price to rural farmers. This may probably be one of the best and most efficient means of ensuring inclusive growth".

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IX VEGETABLES/ ONION-POTATO

Prices of vegetables & spices crash upto 20% due to the brisk start to monsoon (5/6/2013)

Prices of vegetables and spices have dropped up to 20% in the past month and are likely to remain low as higher output along with the brisk start to the monsoon has calmed the market. The drop in vegetable prices, on top of the global fall in various commodities from aluminium to zinc, is good news for policymakers as stubbornly high inflation has hindered moves to cut interest rates. Expectations of higher farm output after last year's slump would also boost overall economic growth, economists said.The fall in vegetable prices in the past month has been the steepest in recent times. Prices had shot up in previous years because of erratic rainfall, particularly in 2012 when rainfall was 30% below normal in June.

"Prices of most vegetables have fallen because productivity has increased this year. Most farmers in south India and Maharashtra have used low-cost drip irrigation, raising the moisture level of the soil by 50-75%. Prices are not expected to go up this month. And if monsoon remains normal, we do not foresee prices to climb," said Shriram Gadhave, president of the All India Vegetable Growers Association.In the wholesale market, vegetable, chana, spices and poultry feed fell 15-20% over the last weekend.

At the retail end, prices have dropped 8-10%. In Delhi's Azadpur mandi, Asia's largest wholesale market, prices of vegetables have declined as arrivals have improved from neigbouring states. "Production has been good in the adjoining areas of Delhi and arrivals have improved. Prices at the wholesale level are down 15-20%," said Subash Chugh, owner of Subash Vegetable Trading.

In Delhi's wholesale market, prices of vegetables ranged from Rs5-8/kg for cucumber to Rs3-6/kg for pumpkin and Rs6-7/kg for onion. In Kerala, where the monsoon arrived on June 1, prices of farm commodities have started moving downwards. Jitin Raj, owner of vegetable trading firm Amal Traders, said: "Vegetable prices have gone down at least 10-15%. The cooling-off effect will continue if the monsoon remains good."

In Bengal, prices of most vegetables have come down except tomato. Soumen Manna, a vegetable trader from Kolkata, said tomato prices are high as the local crop has dwindled. With the Met department declaring onset of monsoon in Kerala as per schedule, it had a notable effect on chana prices, which fell

from Rs3,600 per quintal toRs3,200 per quintal in a month.

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Bengal potato prices fall by Rs 50 on improved supplies (BL 9/6/2013)

Potato prices in West Bengal dipped by nearly Rs 50 a quintal in the last one month on the back of improved supplies.

Wholesale price of the tuber (Jyoti variety) was ruling around Rs 800 a quintal in the first week of June, down from Rs 850 a quintal in mid-May.

According to Patit Paban De, member, West Bengal Cold Storage Association, nearly 12 per cent of the potatoes kept in cold storages have found their way into the market so far.

Close to 59 lakh tonnes of potatoes have been stored in the 425 odd cold storages in the State this year. “Usually, close to 15 per cent of the stock from cold storages are released into the market around this time of the year. But, this year, the release has been lower as the process of unloading started a bit late,” De told Business Line. The prices could have come down a tad lower had the release been at par with previous year, said Sukumar Samanta, General Secretary, Singur Ratanpur Aloo Byabasi Samiti. Close to 54 lakh tonnes of potatoes are usually kept in cold storages across the State. However, this year, the storage has been higher on account of a higher production. There has been a 12 per cent rise in potato production in the State to nearly 98 lakh tonnes this year.

Demand

The demand for Bengal potatoes continues to be steady and this would keep the prices firm at current levels, De said.West Bengal consumes around 50-55 lakh tonnes of potatoes produced; while nearly 40 per cent find its way into other States.

“So far, the demand has been good and Bengal potatoes are being transported to other states. “However, if for some reason, the movement of potatoes to other States is affected, then it can lead to a price crash as the production is also higher this year,” he said.

Vegetable, fruit prices heat up as supplies take a hit on excessive rainfall (ET 19.6.13)

Vegetable, fruit prices heat up as supplies take a hit on excessive rainfallHeavy rains continued to lash north India on Monday, disrupting life in Delhi and wreaking havoc in hill towns, but the weather department said there will be respite by Tuesday.

Vegetable and fruit vendors in Delhi raised prices by up to 10% as supplies from nearby farms and neighbouring states slowed down. "Prices are expected to rise in the short term as there have been crop damages due to the sudden rains," said Pradipta Sahoo, head of horticulture at Mother Dairy, a co-operative retailer.

Heavy rains in the past 24 hours across the Delhi-NCR region have led to slow arrival of vegetables from nearby villages and also from Punjab, Haryana, Rajasthan and Uttar Pradesh, said Rajinder Sharma, chairman of Azadpur Agricultural Produce Marketing

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Committee, the largest wholesale market for vegetables and fruit in Asia. "Vendors have been quick to cite this as reason to raise prices temporarily."

Traders said it was a temporary phase when farmers were unable to harvest the produce and bring it to mandis. "Good road infrastructure across the region has, however, ensured daily arrival of 700-800 trucks (each carrying 15-20 tonne) at Azadpur," said Sharma. Of this, mangoes accounted for more than a quarter.

On Monday, the price of potato at Azadpur mandi ranged between 6.50 a kg and 12 per kg, onion 7.50-14 per kg and tomato 10-15 a kg. "At the mandis, vegetable prices may increase by 50 paise to 2 a kg, but at the retail level sellers increase prices by up to four times, hurting consumers," said Surinder Kohli, a leading vegetable trader from Azadpur. He said only a slight increase of 1-2 a kg has taken place in the prices of vegetables such as ladyfinger ( 16), bitter gourd ( 8) and bottle gourd ( 7).

Veggies, fruits prices stable at wholesale markets in Delhi (ET 20/6/2013)

Vegetable and fruits' prices at wholesale local markets are largely unaffected despite supply concerns due to flood in the Yamuna river bank and Uttrakhand, traders said today.

"There was psychological impact on prices few days back due to floods but the wholesale prices have now cooled down and are ruling stable," Azadpur Agricultural Produce Marketing Committee ChairmanRajendra Sharma told PTI.

The states of Punjab, Haryana and Rajasthan are major supplier of vegetables and fruits to Delhi and some quantity of food items arrive from Yamuna bank River and Uttrakhand, he said.

As far as supply from areas nearby Yamuna river is concerned, Sharma said watermelon, musk melon and pumpkin are key items that farmers grow there and supply of these items gets affected every year during monsoon.

On firming retail prices of food items, Sharma said, "Retail traders always look for reasons to increase prices. This time, they have found reason in floods to raise rates of vegetables and fruits in the city."

Supply of all vegetables and fruits is uninterrupted and prices are stable as of now, he added.

As per the AMPC data, onion is available at Rs 13 per kg, potato at Rs 12 per kg and tomato at Rs 10.50 per kg at Azadpur mandi.

Among other veggies, prices of beans are ruling at Rs 30 per kg, bitter gourd at Rs 12.70 per kg, brinjal at Rs 11 per kg, capsicum at Rs 21 per kg and cucumber at Rs 6.90 per kg.

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X SUGARCANE/ SUGAR

Sugar prices fall marginally on increased arrivals (ET 27/5/2013)

Wholesale sugar pricesdeclined upto Rs 20 per quintal in thenational capital today following increased arrivals from mills.

Marketmen said apart from huge readystocks position in the markets, regular supply from mills mainly pulled down sweetener prices.

Sugar ready M-30 and S-30 prices quoted lower at Rs 3200-3280 and Rs 3190-3260 instead of Rs 3200-3300 and Rs 3190-3280 per quintal.

Among millgate section, sugar Dhampur and Simbholi lost Rs 15 each to Rs 3080 and Rs 3205 per quintal.

Baghpat, Anupshar, Asmoli and Kinnoni also moved down by Rs 10 each to Rs 3090, Rs 3060, Rs 3185 and Rs 3245 per quintal.

Mills for linking of cane and sugar prices (BS 28.5.13)

Indian sugar mill owners call for decontrol of sugar prices, seeking their fixation on the basis of processed sweetener

Indian sugar mill owners have called upon decontrol of sugar prices, seeking their fixation on the basis of processed sweetener.

"The cane prices would have to be linked to finished product prices," said Yatin Wadhwana, managing director of Sucden India Private Limited, on the sidelines of ongoing Kingsman Asia Pacific Sugar Conference.He was referring to the imbalance in current cane and sugar prices after partial decontrol measures were introduced early last month.

The measures will impact the mills' earnings as cane prices have gone up and sugar prices decreased, he said, adding the mills have to pay the fixed prices for the cane.

"The industry is in trouble as it has to pay a fixed price of cane," Wadhwana said.

He said the cane price in UP was Rs 2800/tonne with sugar recovery of 9 per cent, and in Maharashtra it was between Rs 2,300-Rs 2,800/t with sugar recovery of 10-12 per cent.

Sugar prices in India has dropped by over 10 per cent to RS 31,000/t (USD 560/t) recently due to surplus in supplies.

But Indian mills were not able to export sugar as their domestic prices were still higher than in the international markets.

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Indian mills' white sugar prices averaged $550-$560/t ex-mill while Brazil's offer was lower at $470/t free-on-board.

Comparatively, the mills' production costs were also high, ranging between Rs 3,000/t to Rs 5,000/t.

The mills were also expected to face sugar surplus in the domestic market in the coming months.

This year's production is estimated at 25 million tons, or over 8 per cent or 2 million tons above consumption demand, Wadhwana said.

Indian mills were expected to export 1 million tons between October-September 2012-13, while imports of raw sugar was expected at 1.5 million tons in the 8 months to May, 500,000 tons of which would be processed for local market and rest re-exported, according to Wadhwana.

The oversupply situation would likely further depress sugar prices in the Indian market, said traders at the conference.

New sugar distribution mechanism may be delayed in some states (BS 29.5.13)

The government would soon review the preparedness of states to implement a new mechanism for distribution of sugar through ration shops and might consider either delaying its implementation or granting some exemption from the new system to a few states, a senior food ministry official said today.

He said the meeting had been called in view of concerns expressed by some states on their readiness to implement the new system for distributing sugar through ration shops.

According to the new system, the government will reimburse a fixed amount at the rate of Rs 18.50 a quintal of sugar to states for distributing the sweetener through ration shops, instead of directly allocating sugar to them. However, it might lead to ration shops going dry from June 1 in many states as the Centre has sugar stocks only till May 31, while many states have not yet accepted the mechanism.

The states will have to purchase sugar from the open market for distribution through the ration shops through an open tender and sell it at the existing fixed rate of Rs 13.50 a kg. The difference between the purchase price and sale price will be reimbursed by the Centre to the state but only to the extent of a uniform Rs 18.50 a kg.

The mechanism was approved by the Union Cabinet a few months earlier, in line with the recommendations of a Committee headed by the Prime Minister's Economic Advisory Council Chairman C Rangarajan.

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Food Bill

The government today reviewed the preparations for implementing the ambitious Food Security Bill. The Bill, which is awaiting approval from Parliament, seeks to provide legal entitlement for cheap grains to almost 67 per cent of the Indian population.

Officials said all possible options to expedite the implementation of the Bill was discussed in a high-level meeting chaired by Finance Minister P Chidambaram. "A section in the government was of the view that the Food Security Bill should be implemented either through ordinance or by the usual practice of getting it cleared by Parliament, but the food ministry is of the opinion that the best possible solution could be getting Parliament's nod for the same," a senior official who was present in the meeting said. Food Minister K V Thomas and Parliamentary Affairs Minister Kamal Nath were part of the deliberations.

The draft National Food Security Bill promises 5 kilograms of wheat or rice or coarse cereals to every identified person per month at Rs 3 per kg for rice, Rs 2 for wheat and Rs 1 for coarse cereals.

Ethanol blending to save 6 a litre for oil companies: Sugar mills (ET 5/6/2013)

Sugar mills say oil marketing companies (OMCs) can indeed save 6 for every litre of petrol sold if ethanol is blended with it, contradicting the OMCs' suggestion that blending will lead to costlier fuel.

In a letter to the ministry of petroleum, Indian Sugar Mills Association (ISMA), a sugar industry lobby, has said oil companies are reluctant to buy ethanol from domestic producers which are capable of meeting 53% of their annual requirement. Oil companies have said they could secure less than a third of their requirement from domestic sources and will have to rely more on costly imports.

They feared that petrol price will go up if costly imported ethanol is blended with it. "Against an annual requirement of 105 crore litre for the mandatory 5% blending, ethanol manufacturers offered 55 crore litre in the tender.

However, even after four months, orders have been issued by the OMCs for around 25 crore litre only," said the letter reviewed by ET. Sugar mills said they are ready to supply 55 crore litre of ethanol and more if a supplementary tender is floated as cane crushing for this season will start in October. ISMA has forecast 50 crore litre of ethanol production in the current season.

"The moot point is that 53% of the current annual requirement made available domestically will give savings to OMCs of around Rs6 per litre. Further, a supplementary domestic tender for additional supplies from October-November 2013 could fulfil most of the OMCs' balance requirement," said the letter.

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Prices offered by domestic producers are in the range of Rs38-49 per litre. Government sources said oil companies procured a low volume because the prices offered by ethanol producers were "unviable". Last month, state oil firms bought 10 crore litre of ethanol at a price of Rs42 per litre.

The price of imported ethanol is around Rs70-90 a litre. Sugar mills are requesting the government that OMCs procure a major volume from domestic sources and the rest from abroad. The Cabinet Committee on Economic Affairs has made 5% ethanol blending mandatory in petrol sold after 30 June.

Centre won't assist states in sugar purchase (ET 29/5/2013)

The food and public distribution ministry has shrugged off the demand from states for an alternative to self-procurement of sugar for public distribution system (PDS).

Calling it a case of pure "lethargy" on the part of states, the ministry is in no mood to bend the rules. "States want a hands-off policy for sugar procurement. It was a cabinet decision to pass the control of sugar PDS to state governments. State-specific changes cannot be made in it. We are pressing states to start the tender process and procurement soon," said a source with the food and public distribution ministry.

Starting June of this year, the Centre will stop procuring sugar from mills for ration shops across the country.

States will have to buy it from open market through tendering and sell at a subsidised price at ration shops, while the Union government will pay the subsidy amount.Six states - Delhi, Andhra Pradesh, Tamil Nadu, Madhya Pradesh, Kerala and West Bengal- have floated tenders for procurement of sugar till date. Major sugar producing states Uttar Pradesh and Maharashtra are yet to float tenders.

Northeastern states and Jammu & Kashmir have requested the Centre to either grant them an extension to build the required infrastructure or design an alternative programme.

"Enough time was given to states to get a system in place for public distribution of sugar and they should start doing it now rather depending on the Union government or Food Corporation of India," said the official.

ET reported on Tuesday that northeastern states and Jammu & Kashmir are seeking government support till they get public distribution infrastructure in place. These states have cited lack of storage facilities and transportation hassles as the reason.The ministry, however, is planning to disburse an advance amount of subsidy to the states to help them in procurement and public distribution of sugar.

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Ministry officials said the finance ministry would soon clear a token amount for states to speed up sugar PDS rollout.

"We are writing to state governments everyday to launch sugar PDS programmes. The only assurance we can give is disbursing some subsidy to help them procure sugar from the open market. Now that the price of sugar has come down, the delay seems to be irrational," said the source.

The average sugar price in the open market has come down to Rs 32 from Rs 36 six months ago. The market price of sugar in north India is around Rs 30-32 per kg and Rs 29.5-31 per kg in Maharashtra and south India.

Jayalalitha protests against partial decontrol of sugar sector (BS 31.5.13)

Says move will create uncertainty in ensuring adequate supply of sugar through PDS

Tamil Nadu Chief Minister J Jayalalithaa today strongly protested against the central government's decision to remove the levy obligations on sugar mills and decontrol the regulated release mechanism for sugar.

In a letter to Prime Minister Manmohan Singh, Jayalalithaa said that the arrangement wold only create uncertainty in ensuring adequate supply of sugar through the Public Distribution System (PDS) at affordable cost to the poor, as the State will have to procure the entire stock from the open market. She added that any price fluctuation over Rs 32 per kilogram (kg) in the open market will have to be borne by the State, which is already saddled with a huge subsidy burden.

"At the outset, I would like to register my strong protest against this decision taken by the Government of India as it will adversely impact the supply of sugar through the PDS and hence the welfare of the poor and downtrodden in the long run," she said.

Under the new dispensation, the Government of India would provide a subsidy of Rs 18.50 per kg only for the quantity committed under levy, but to be procured in the open market, with a rider to retain the retail price of Rs 13.50 per kg at Fair Price Shop levels. As per the communication received, this subsidy by the Government of India will be available only for the financial years 2013-2014 and 2014-2015.

"There is no clarity whether this arrangement will continue beyond 2014-2015. The sudden withdrawal of levy obligation on Sugar Mills will expose the supply of PDS sugar to the vagaries of the market and the resultant volatility," she argues.

Currently, levy sugar released to Tamil Nadu by the centre is 10,835 MT per month which meets only one third of the total requirement for distribution under PDS. The State Government is already incurring heavy expenditure towards providing subsidy for the supply of sugar through the PDS.

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Alleging that the present decision of the Ministry of Food and Public Distribution to remove the levy obligation on sugar would have a severe impact on the welfare of the poor and downtrodden who depend fully on the PDS for sugar, she requested the Prmie Minister to reconsider the decision and continue with the existing levy system of sugar, or to guarantee that the entire difference between the open market price of sugar and issue price in the PDS would be borne as subsidy by the centre.

The centre should also continue the subsidy beyond 2014-2015, she demanded.

Sugarcane acreage likely to fall 10% this kharif season (BS 3.6.13)

Vagaries of monsoon during last season created water shortage in cane-rich states; farmers switched to other crops like cotton, guar and soybean

The sowing area under sugarcane is likely to decline by 10 per cent this season following shortage of water in major producing states including Maharashtra, Tamil Nadu and Karnataka. Vagaries of the monsoon rainfalls during the last season, and their oddly distribution thereafter, created water shortage in these cane-rich states, resulting into shifting of farmers’ sowing interest from this high water requirement crop to others such as cotton, guar and soybean.

Data compiled by the agriculture ministry showed that the sowing area under sugarcane fell to 4.07 million hectare (ha) as on May 17, 2013 compared to 4.57 million ha in the corresponding period last year. Sowing, however, progressed slower than expected thereafter with the overall coverage area under this sensitive cash crop advancing to 4.12 ha towards the end of May.

Although the Indian Meteorological Department (IMD) forecast normal monsoon rainfalls — a crucial component for the progress of cane sowing — this season, the pace of sowing is expected to remain slow, especially in major pockets of the drought-affected districts of Maharashtra, Tamil Nadu and Karnataka.

Lesser sowing, however, could pull down India’s overall cane productivity followed bythe proportionate decline in the country’s sugar output. The agriculture ministry, therefore estimates around 12.5 per cent decline in cane output at 70 million tonnes this year compared to 80 million tonnes in the previous year.

A number of districts including Vidarbha, Ahmednagar, Aurangabad and a couple of others in Maharashtra along with almost all districts in Tamil Nadu, in addition to a large number of districts in Karnataka, was in the grip of drought due to failure of the monsoon rainfalls last season. Therefore, farmers shifted to less water-consuming crops including cotton, guar and soybean.

The Centre recently de-controlled the sugar sector by withdrawing 10 per cent mandatory sale at lower price through the public distribution system (PDS) in addition to abolishing the monthly quota release system. The sustained decline in sugar production, therefore, may force the government to liberalise import of raw sugar, which currently is restricted

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through high import duty.

Sugar import was ‘nil’ in the last two seasons due to sufficient domestic production. During the current season, however, total import of raw sugar stood at 400,000 tonnes including 14,000 tonnes of white sugar imported from Pakistan. Last year, Maharashtra had received below-average rainfall in most regions due to which the state had to declare drought, causing sugar-cane production to fall. This year, sugar production in the state is expected to fall to 8 million tonne from 9 million tonne in the previous year. Most of the sugar cane is expected to come from cash-rich areas of Sholapur, Pune and Ahmednagar, according to the sugar commissionerate of Maharashtra and Maharashtra State Federation of Cooperative Sugar Factories.

However, Indian Sugar Mills Association (ISMA), the apex industry trade body, is yet to assess the sowing and crop progress in the country. “We have not yet assessed the cane sowing area and the crop’s progress for which we are waiting for the first showers of the monsoon season. We will have some clarity only after rainfall begins,” said ISMA’s spokesperson.

ISMA and sugar mills have also asked the government to increase import duty on sugar to 30 per cent from the current duty of 10 per cent to discourage imports of the commodity as there is enough supply of sugar in the market.

Pawar writes to FM to hike import duty on sugar (BS 6.6.13)

Sugarcane arrears of mills top Rs 12,000 crore on falling domestic, international prices; abundant supplies

Worried over the mounting sugarcane arrears of mills, Agriculture Minister Sharad Pawarhas written to Finance Minister P Chidambaram to immediately increase the import dutyon sugar from 10 per cent.

Officials said, Pawar in his communiqué notes the accumulated arrears of sugar mills has topped Rs 12,000 crore.

The minister said that despite drought in Maharashtra, India’s sugar production in the 2012-13 crop marketing year that will end on September 31 is expected to be around 25 million tonnes. When these are added to the season's opening balance of six million tonnes, it will leave the country with around eight million tonnes in stocks when the current season ends.

“Therefore, availability of sugar will be much more than domestic consumption , despite the drought in Maharashtra. Hence, we do not need imports at this stage,” Pawar is believed to have written. According to industry officials, usually, the country’s opening balance of sugar is around 4.5 million tonnes.

Giving another reason for increasing the import, officials said the minister let as

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international prices of sugar have been falling in the last few months, the Indian market has also dropped.

The domestic price has seen a steady fall since October 2012, which has led to the accumulated cane arrears and hence, the import duty should be hiked, Pawar wrote.

India’s sugar production has stabilised at 23-25 million tonnes because of a declining recovery ratio.

Recently, the government partially removed some of the decades-old curbs on the Rs 80,000 crore sector, which is expected to boost its efficiency in the coming years.

It abolished the levy sugar mechanism, under which millers had to sell a fixed portion of their annual produce to the government for distribution through ration shops at cheap rates.

It also gave the mills freedom to sell any quantity of sugar at any point of time.

Sugar production may fall by 8% to 23.2 million tonnes in 2013-14 (ET 9/6/2013)

The country's sugar production is projected to fall by eight per cent to 23.2 million tonnes in 2013-14 marketing year starting October mainly due to lower output ofsugarcane, according to USDA report.

Sugar production of India, the world's second largest producer and biggest consumer, is pegged at 25.2 million tonnes in the 2012-13 marketing year (October-September), theUSDepartment of Agriculture (USDA) said in a report.

"India is set to become a net sugar importer in MY (marketing year) 2013/14 on relatively strong domestic prices," it added.

The annual domestic consumption is about 22 million tonnes.

The Department attributed the expected decline in sugar production to lower cane production and higher diversion for alternative sweetener.

The gur prices are expected to remain relatively strong compared to sugar prices in the next marketing year, it added.

On state-wise, the report forecast that sugar production of Maharashtra could decline by 26 per cent to 5.87 million tonnes in the 2013-14 marketing year from 7.91 million tonnes in the current year.

Karnataka's output might fall to 2.69 million tonnes in the next year from 3.12 million tonnes in the current year.

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However, sugar output of Uttar Pradesh is expected to rise to 8.4 million tonnes from 7.72 million tonnes during the period under review.

On sugar decontrol, the department said the government's reform of marketing controls on the sugar industry would give millers greater flexibility in managing sales and cash flows, which will ensure timely payment to cane farmers.

Sugar output could dip by 10 per cent in 2013-14 to 22 million tonnes: Food Minister K V Thomas (ET 11/6/2013)

Sugar output in the country is projected to drop by 10 per cent to 22 million tonnes in the 2013-14 marketing year starting October, mainly due to lowersugarcane output in drought-affected states,Food Minister K V Thomas said today.

Sugar production in the next year would be just enough to meet the annual demand of 22 million tonnes. But there would not be any problem of sugar supply as the country would have good quantity of carryover stock, he said. Sugar production of India, the world's second largest producer and biggest consumer, in the ongoing 2012-13 marketing year (October-September) is pegged at 24.5 million tonnes and could even reach 25 million tonnes.

"As per the Agriculture Ministry's estimate, sugar production is expected to be down by 10 per cent in 2013-14 marketing year," Thomas told PTI. The sugar production is estimated lower as sugarcane output is likely to be affected especially in drought-hit Maharashtra and Karnataka, he added. The latest estimate on sugar output is almost in line with those of US Department of Agriculture (USDA), which recently projected an eight per cent fall in India's sugar production at 23.2 million tonnes for 2013-14 marketing year.

According to the USDA, sugar production could decline by 26 per cent in Maharasthra to 5.87 million tonnes and 14 per cent in Karanataka at 2.69 million tonnes in 2013-14. On increasing import duty on sugar from the current 10 per cent, Thomas said there has been such a demand from the sugar industry but no decision has yet been taken.

Sugar output in Maharashtra seen down 25 per cent y/y (ET 11/6/2013)

Sugar output in top producing Maharashtra state is likely to fall by 25 percent year-on-year to 6 million tonnes in 2013/14 as drought reduced the acreage under the crop, a state official said.The sharp drop in output in the western state will bring down the country's total sugar production and could lead to higher imports in the 2013/14 marketing year starting Oct.1.

After a drought in 2009, sugar production fell sharply, forcing India to make big purchases from overseas markets and pushing the price of raw sugar futures to 30-year highs.

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"Considering the impact of drought on acreage, we estimate production of 6 million tonnes for the 2013/14 season," D.B. Gavit, a director at the Sugar Commissioner's office, told Reuters.

Maharashtra produced 8 million tonnes of sugar in the 2012/13 season. India's overall production was 24.6 million tonnes against local demand of around 23 million tonnes.India is likely to import 1.5 million tonnes of sugar in 2012/13, including 500,000 tonnes for local consumption and the rest for re-export despite the surplus produce, as local prices are much higher than overseas prices.

India's sugar exports in the current year are around 50,000 tonnes, sharply down from 3.5 million tonnes a year earlier.

Sugarcane acreage in Maharashtra stood at 511,000 hectares as on June 5 compared with 945,000 hectares a year earlier, farm ministry data showed.

"The ongoing rainfall is good for the crop, but it can't increase the area for the 2013/14 season. The crop planted in the next few months would be available for crushing only in 2014/15," said Gavit.

Sugarcane is a perennial, water-intensive crop and is usually harvested 10 to 16 months after planting. Cane for the crushing season starting Oct. 1 has been planted, but half the total acreage was short of water during April and May.

In the last week, the cane crop in the drought-affected state received ample rainfall as this year's monsoon arrived on time and is expected to bring average rainfall.

Sugar firm on bright demand outlook (BL 12/6/2013)

Sugar prices ruled firm at upper level on Wednesday. Higher demand from stockists pushed up mill tender rates by Rs 10 while ease in retail demand due to rains in physical market kept naka and spot rates unchanged.

Futures prices were up by Rs 5-10 on a positive outlook for demand in the coming months. Under current was firm, said sources. A wholesaler said “chances of hike in import duty on sugar, possible 10 per cent drop in sugar production next season and any time buying by State Governments for public distribution systems weigh on overall sentiments.

Production of sugar in 2012-2013 is almost over and now market has to depend on whatever inventory held with producers and stockists.

In the Vashi wholesale market, sugar arrivals continued to be at 65-66 truck loads (each of 100 bags) but local dispatches were restricted to about 60-62 truck loads due to rain.

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Sugar sector may suffer losses of over Rs 1,000 cr in 2012-13 (BL 13/6/2013)

Sugar industry is expected to post losses of over Rs 1,000 crore in 2012-13 marketing year ending September on higher input cost vis-a-vis output prices, according to a research report by Crisil.

The report revealed that the average price paid by sugar mills for sugarcane rose by 14 per cent annually, while prices of sweetener gone up by only 3 per cent annually during 2010-11 and 2012-13 marketing years (October-September).

“CRISIL Research expects the Indian sugar industry’s net losses to increase to over Rs 10 billion (Rs 1,000 crore) in sugar season 2012-13 (October to September) due to the widening gap between sugarcane and sugar prices,” the agency said in a statement.

Crisil forecast that the situation would deteriorate in the next marketing year.

“For sugar season 2013-14, the central government has announced a 24 per cent hike in the minimum price payable for sugarcane...whereas as per CRISIL Research’s estimates, the increase in sugar prices is likely to be only 8-9 per cent. The financial performance of sugar mills will, therefore, deteriorate,” the statement said.

The worst-hit will be mills in Uttar Pradesh and Tamil Nadu, where the state governments announce a State Advised Price (SAP) for sugarcane that is higher than the Centre’s Fair and Remunerative Price (FRP).

Crisil said the impact of this incongruity between the increase in prices of inputs and end-products is reflected in the balance sheets of 74 companies analysed by it.

“Together these companies account for about 50 per cent of domestic sugar production and nearly 40 per cent of them posted net losses in sugar season 2011-12,” it added.

The research firm suggested that sugarcane prices should be linked to the rates of sugar and other byproducts as recommended by the Rangarajan Committee report on decontrol of the sugar sector.

“In the last three seasons ending 2012-13, the ratio of sugarcane costs to revenues from the sale of sugar and its byproducts has soared to 76-79 per cent from an average of 67 per cent in the previous decade, pushing several mills into losses,” Ajay Srinivasan, Research Director - Industry Research, CRISIL said. (This article was published on June 13, 2013)

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Sugar turning sour for mills: CRISIL (BS 14.6.13)

Rationalisation of sugarcane pricing critical for long-term sustenance

The Indian sugar industry’s net losses are set to increase to Rs 1,000 crore in the 2012-13 sugar season (October to September), due to the widening gap between cane and sugar prices.

While the latter are determined by market forces, cane prices continue to be regulated by the central and state governments. This disparity in cane and end-product pricing will continue to cause wide variations in sugar production and mill profitability. CRISIL Research in its latest report says this issue can be resolved only by linking cane prices to those of end-products.

Over the past three seasons (2010-11 to 2012-13), the average price paid by mills for cane has increased at a compounded annual rate of 14 per cent; sugar prices have gone up by only three per cent annually.

The impact of this can be seen in the balance sheets of 74 companies, together accounting for about half of domestic sugar production. Nearly 40 per cent of them posted net losses in 2011-12, and about 30 per cent had an interest cover of less than one time. The proportion of companies facing difficulty in servicing their interest is increasing.

While sugar distribution has been decontrolled from this April, following the abolition of the regulated release mechanism and levy sugar obligation, cane prices continue to be regulated by the central and state governments.

For season 2013-14, the central government has announced a 24 per cent rise in the minimum price payable for sugarcane, the Fair and Remunerative Price (F&RP). By CRISIL estimates, the rise in sugar prices is likely to be only eight or nine per cent. “The financial performance of sugar mills will, therefore, deteriorate. The worst hit will be mills in Uttar Pradesh and Tamil Nadu, where the state governments announce a State Advised Price (SAP) for cane that is higher than the F&RP,” it has said.

In October 2012, the Rangarajan committee had recommended the SAP be abolished and 70 per cent of revenue from the sale of sugar and its byproducts be shared with farmers. The government is yet to act on this recommendation.

“Although recent reform measures on the marketing front and increased impetus on blending of ethanol with petrol will provide some relief to mills, cane pricing remains the key issue,” says Ajay Srinivasan, director, industry research, CRISIL Research.

Rationalising of cane pricing will also help in reducing the volatility in sugar production and farmer income. “Sugarcane arrears and diversion of cane for other purposes have influenced sugar production. Linking sugarcane prices to end-product prices will result in more efficient transmission of price signals to farmers and, thereby, help curb volatility in sugar production to some extent,” he adds.

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Sugar firm on hopes of surge in festival demand (BL 19/6/2013)

Sugar prices ruled steady on Wednesday as ample supply from mills continued and offtake by retailers was routine.

Barring bold variety, M-grade sold Rs 10-20 higher in spot prices, naka and mill level remained unchanged in the absence of any firm-supportive cues.

In the futures market, bearish trend continued for the second day with prices falling more than Rs 40 till noon on Wednesday.

Sources said the moral was steady on expectation of surge in demand from next month.Festival season will start from July-August and will end in November -December.New crushing season is four months away, hence, sentiment will remain positive in the market.

But with higher production this year and huge carryover stocks prices were under control.Producers are still continuously selling the commodity to ease the inventory burden.The Vashi wholesale market currently carries more than 110-115 truckloads of inventories, sources said.

Arrivals were 63-64 truck-loads (each of 100 bags) and local dispatches were about 60-61 loads.

On Tuesday, 9-10 mills offered tenders and sold about 24,000-25,000 bags to local traders at Rs 2,950-3,010 (Rs 2,950-3,010) for S-grade and Rs 3,020-3,120 (Rs 3,020-3,120) for M-grade.

Sugar prices end steady on small buying (ET 18/6/2013)

Sugar prices settled at last levels in the national capital today following sporadic buying support.

Marketmen said restricted supply from mills and little buying support from retailers andbulk consumers such as soft-drink and ice-cream making industries, mainly helped keep prices around overnight levels.

Sugar sale under levy for 2011-2012 yet to complete (BS 25.6.13)

Food ministry has sent 15-20 showcause notices to sugar mills to sell sugar immeditely to states which are otherwise holding stocks for price difference betwene levy and market

After the deregulation of sugar and removal of levy mechanism, the food ministry and states are now struggling with the new problem of delay in lifting up of remaining stock of levy sugar for the year 2011-12.

This is important as previous balances of sugar allotted to states have to be cleared before the new liberalised regime of sugar sales can start without any levy obligation.

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According to officials close to the development, around 30,000-40,000 tonnes of sugaris yet to be lifted from the sugar mills out of the total levy sugar allocated to the states for the year 2011-12. The problem is mostly seen in the state of Maharastra where many sugar mills have been allotted levy obligation to sell sugar to other states.

To this effect, around 15- 20 show cause notices have also been sent to the sugar mills to readily sell sugar to the states allotted. Official sources said if the mills do not sell sugar even after the show cause, then sugar will be confiscated and sold to the states to fulfil the 2011-12 levy obligation.

In many cases even lifting agencies for the states are at fault said officials.

They explained that every year there is a backlog in the sale of levy sugar but the remaining balance gets rolled over when the new allocation is done for states and levy obligation is decided for the mills.

However that is not the situation this year. From this year onwards there are no levy obligation and mills are free to sell the sugar at market determined prices to all including states.

Therefore, many mills are reluctant to sell the sugar at levy price which is way below the market price. Levy price is a mechanism in which mills are under statutory obligation to sell sugar at subsidised price. While the levy price of sugar is Rs 13.50 per kg, the market price is way above in the range of Rs 30-32 per kg.

They explained earlier there was not much difference between the market price and levy sugar meant for public distribution system but since last few years the difference has been rising consistently, officials said.

Since the states were reimbursed earlier to the extent of Rs 13.50 per kg and market price was around this price, sugar was available aplenty for PDS and there used to be a shortage in the open market. Now the situation has reversed.

Prior to deregulation, the lifting of sugar under PDS from mills has already started coming down sharply to the extent of the 60-70% of the stock as against 90-95% earlier, said officials. States of Bihar and Chattishgarh have virtually stopped lifting sugar from the mills for PDS.

As against bills for reimbursement to the states for sugar under PDS to the extent of around Rs 5,000 crores earlier, now the centre receives of Rs 1000-1500 crores as many states are lifting less sugar under PDS. This is because, sources said, the subsidy is given to the states against receipts of distribution of sugar under PDS at levy price of Rs 13.50 per kg only.

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XI INPUTS

Centre, A.P. wrangle over Seed Bill (BL 29/5/2019)

The Centre has asked Andhra Pradesh to abandon its plans to come out with a separate Seed Bill.

The Bill proposes to regulate retail prices of the seed and the royalty component in the case of transgenic seeds. It also empowers the State to withdraw permission for genetic technology if it poses danger to public security.

The Union Government has written a letter to the State Agriculture Ministry, saying the Bill would be redundant as it (the Centre) is coming out with a similar Bill at the national level.

Sources said that the Centre is not keen on States regulating seed prices, which, it thinks, should be market driven.

According to an industry source, the letter hinted at the supremacy of the Central law. “It wanted the State to stop the process forthwith. The State’s effort might have caused a fear at the Centre that other States could follow suit. The Union Home Ministry too made enquiries in this regard,” the source said.

Notwithstanding the Centre’s letter, the State Government has decided to go ahead with the Bill. AP’s Agriculture Minister Kanna Lakshminarayana told Business Line: “We are going to introduce it when the House re-assembles later this month after the recess. We have sent it to the Legal Department for vetting.”

Confirming the communication from the Centre, he, however, called it only an ‘advisory’. “The small seed producers are at the receiving end from the seed companies. They are not getting their due despite the hard work. There are some other issues too that call for a law now,” he said.

The ongoing tussle is being seen as a fight between the Andhra Pradesh Government and the Agriculture Ministry — a portfolio handled by the Nationalist Congress Party chief Sharad Pawar. “There is no need for States to impose any control now, since the country has been on the path of liberalisation for several years now. Through the proposed Bill, AP will be attempting to regulate the industry further, which is not desirable,” a source said.

STATE SUBJECT

Agriculture is a State subject and States such as Andhra Pradesh and Maharashtra are having a say in fixing the Bt cotton seed prices, a move already challenged by the

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industry. However, attempts by Madhya Pradesh and Gujarat to emulate Andhra Pradesh and Maharashtra have not been successful.

“It will be a draconian move, if the State Government is successful in getting the proposed Seeds Bill passed in the Assembly. It will definitely hurt investments in the State,” the source said.

The State Bill seeks to punish companies for failure to deliver on the germination and yield promises. It has also made it mandatory for firms to register their varieties with the Registrar of Seeds.

The seed industry in Andhra Pradesh, considered the seed capital and accounting for over half the Bt seeds produced in the country, had opposed the introduction of the State Bill, calling it redundant.

It argued that there are several Central laws that already cover the aspects the State Bill was seeking to address.

The National Seed Bill is waiting for the Rajya Sabha nod nearly a decade after it was introduced in Parliament in 2004 under the UPA Government. (With inputs from Vishwanath Kulkarni, New Delhi)

Fertiliser Ministry open to urea price hike (ET 5/6/2013)

Fertiliser Ministry will not oppose increase in urea prices provided it is in the interest of farmers and balanced use of soil nutrients, Union Minister Srikant Jenasaid today.

Urea is currently sold at a fixed MRP of Rs 5,360 per tonne. The government reimburses the difference between the cost of production and MRP in form of subsidy to fertiliser companies.

The Department would also consider the industry's demand to review the cost of urea production, the basis on which the subsidy is paid to manufacturers.

"The fertiliser industry made a presentation in the Group of Minister (GoM) meeting. There was no decision taken today as Planning Commission Deputy Chairman Montek Singh Ahluwalia was not present," Jena told reporters after the meeting.

Besides Jena, the GoM on urea pricing, headed by Agriculture Minister Sharad Pawar, was attended by Finance Minister P Chidambaram, Petroleum Minister Veerappa Moily and Food Minister K V Thomas.

On urea price hike, he said it was not on today's agenda and the GoM and Cabinet would take a decision on it.

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Asked whether the Fertiliser Ministry was open to the urea price hike, Jena said: "Urea is cheaper than other fertilisers such as DAP and MoP. So there is a misuse of urea. There is a concern from the agriculture sector about soil health. If increase in urea prices is in interest of farmers and Indian agriculture, we will not oppose it".

However, Jena, who is Fertiliser Minister, said that urea prices should not be raised for lowering the government's fertiliser subsidy or for the benefit of the industry.

Asked about implementing nutrient-based subsidy (NBS) policy on urea sector, Jena said: "We are opposed to NBS on urea".

From April 2010, the government has put phosphatic and potassic fertilisers under the NBS policy and gave freedom to manufacturers to fix MRP.

On fertiliser industry's demand to increase the fixed cost of production, Jena said: "We will examine their demand. The fixed cost of production has not been reviewed since 2002-03. After review, we will get to know whether there is a need to increase or decrease it."

The Fertiliser Association of India (FAI) demanded that fixed cost of urea should be increased by Rs 700 per tonne. It also demanded an additional 500 per tonne for the maintenance of the plants which are older than 30 years.

Fertiliser firms turn upbeat on sales as monsoon advances (BL 17.6.13)

Fertiliser makers such as Iffco and Coromandel International expect kharif sales to be higher than last year on the rapidly advancing monsoon across the country.

“The timely rains have set a good base for higher offtake this year,” said Kapil Mehan, Managing Director, Coromandel International Ltd. Sales from dealer shelves have been quite good as planting of kharif crops progresses in States such as Andhra Pradesh and Karnataka, Mehan said.

Monsoon progress

The monsoon has progressed rapidly, covering the entire country almost a fortnight ahead of time. Total rainfall in the first fortnight is 48 per cent excess than normal of the four-month season that began on June 1. Twenty-nine of the 36 metrological sub-divisions have received excess rains, while three divisions have reported normal rainfall. One sub-division received deficient rainfall, while the remaining three report scanty rains.

The good progress in monsoon has raised hopes of the fertiliser industry that is currently saddled with stocks of about eight million tonnes of non-urea complexes.

inventories

This build-up in stocks is due to poor offtake last year on account of erratic monsoon coupled with the rise in prices of complexes such as di-ammonium phosphate and

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muriate of potash. A significant increase in prices of the non-urea complexes had forced farmers to switch over to cheaper urea last year.

Industry sources estimate DAP stocks at around five million tonnes, while the other complexes containing different ratios of nitrogen, phosphorous, potash and sulphur account for the rest.

“There is a very minor movement and the offtake this year should be slightly better. However, everything depends on the rains and it is too early to comment on sales growth at this point in time,” said U.S. Awasthi, Managing Director, Iffco.

Sales pick up

Total sales of complexes, so far, across the country are estimated at around five lakh tonnes.

DAP sales pick up during sowing as the complex is normally applied for basal application. “Sales will be better than last year as the offtake is higher this year,” said Satish Chander, Director-General, Fertiliser Association of India.

Meanwhile, the Government has asked fertiliser companies to publicise the reduction in prices of phosphatic and potassic fertilisers. Following the decline in global prices, the Government had recently announced a 14 to 22 per cent cut in subsidy rates for fiscal 2013-14 on complexes such as DAP and MoP. The fertiliser makers were expected to reduce prices of DAP by Rs 1,500 a tonne and MoP by Rs 1,000 . Last rabi season, DAP was sold at Rs 24,000, while MoP was priced at Rs 17,000 a tonne.

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XII OTHER AGRI COMMODITIES/ NEWS

Monsoon onset over Kerala still a week away (BL 26/5/2013)

As temperatures soar, the wait for south-west monsoon could be a bit longer with the weatherman saying the annual rains would arrive in Kerala only next week.

“There is no further progress as yet,” India Meteorological Department’s chief forecaster D. Sivananda Pai told PTI when asked about the progress of monsoon.

Weather scientists said conditions were becoming favourable for further advance of monsoon over some parts of the Bay of Bengal during the next three days.

However, scientists do not see this as an indication towards an early onset over Kerala.

“We stick to the IMD’s forecast of monsoon onset over Kerala by June 3,” Swati Basu, director of National Centre for Medium Range Weather Forecasting, told PTI.

The monsoon rains, crucial for India’s agro-based economy, brought first showers to the Andaman Sea on May 17, three days earlier than the usual date, aided by the then raging cyclone Mahasen.

It made some headway between May 17 and May 20 but has not moved any further since.

Cyclone Mahasen, which ravaged coastal Bangladesh and parts of Myanmar, sucked up moisture in the monsoon winds, leaving them dry.

“Cyclonic activity weakens monsoon flow. It takes some time to reorganise,” Pai said when asked about the reasons for the delay in onset over Kerala.

Mercury levels have been rising across north India for the past week with temperatures crossing 45 degree Celsius in parts of Rajasthan, Haryana and Punjab yesterday.

Monsoon watchers expect a strong phase of rainfall in the first week of June after the onset over Kerala, an activity attributed to the wet phase of the Madden-Julian Oscillation (MJO) wave that passes over the Indian Ocean during the period.

The MJO is a fluctuation of atmospheric pressure over the equatorial Indian Ocean and western Pacific Ocean that comes in the form of alternating cyclonic (wet) and anti-cyclonic (dry) regions that enhance and suppress rainfall respectively.

Last month, the weather office had forecast normal monsoon this year with overall rainfall expected to be 98 per cent of the long period average.

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Monsoon is crucial for kharif crops like rice, soyabean, cotton and maize as almost 60 per cent of the farm land in the country is rain-fed.

While IMD’s short-term weather forecasts have been by and large accurate, it is the monsoon predictions which have received flak from several quarters.

The most recent example of the shortcoming of the IMD was last year’s forecast, when it predicted 99 per cent rains of the long period average, while the actual figures stood at 92 per cent with Gujarat, Maharashtra and Karnataka facing drought conditions.

The IMD had also predicted normal monsoon season in 2009, which ended with 22 per cent deficient rains — the worst in at least four decades.

Scientists attribute this to the deficiencies in the monsoon forecast model which was unable to capture the regional variations in rainfall.

Basu said the Ministry of Earth Sciences has embarked on augmenting observation facilities and high power computing capabilities of the IMD with stress on satellite—based observations

Food production looks East (BL 27/5/2013)

In the past two years, India has emerged as one of the large exporters of foodgrains. Tobe precise, India has become the largest exporter of rice and a major player in wheat for the past two years.

This has been largely possible due to the record high output of these cereals with the total foodgrains production crossing 250 million tonnes (mt) for two years in a row.Despite the drought impacting production in certain States, mainly Gujarat, Maharashtra, Karnataka and Andhra Pradesh, the overall production is expected to cross the magic figure of over 250 mt this season too.

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Compared with the output in 1993-94, the overall production has risen by about 40 per cent. Rice production has increased 31 per cent from around 80 mt to about 105 mt, while wheat output has increased 58 per cent from around 60 mt to 95 mt in the period.Similarly, the production of coarse cereals has seen a 35 per cent increase from 31 mt to 42 mt, while the output of pulses has been relatively been sluggish in the past two decades rising 29 per cent from 13.3 mt to 17.21 mt. Maize production has zoomed 124 per cent from 9.6 mt to 21.5 mt during the period.

LOWER YIELD

This growth in food output is largely characterised by an absolute increase in the cropped area, the use of improved hybrid seeds and complex fertiliser nutrients, expansion of irrigation, and increased mechanisation.

Besides, the economic incentive to farmers in the form of progressive increase in minimum support prices over the past several years has aided the growth.Notwithstanding this, the yield of many a food crops continues to be lower than theirglobal average. Though the production of cereals such as rice and wheat is quite comfortable, the country faces shortfall in domestic supplies of pulses and oilseeds.As a result, India continues to remain a net importer of pulses and edible oils. The area under crops such as wheat and maize has seen a steady increase, whereas the area under coarse cerealshas was declining because of the reduced demand.

LAND HOLDING PATTERN

Interestingly, the increase in food production has been possible despite the decline in the average land holding, which has shrunk from about 1.55 hectares in 1990-91 to 1.16 hectares in 2010-11.

This progressive fragmentation of land holding amidst shrinking arable or cultivable land as more agriculture land gets diverted to other purposes such as industry, could pose a big challenge in the years ahead to sustain the rising demand from growing population.

This apart, the emerging challenges for agriculture include climate change, degradation of land and a shrinking water table.

Parkash Singh Badal urges farmers to opt for crop diversification (ET 27/5/2013)

Punjab Chief Minister Parkash Singh Badal today exhorted farmers to opt for crop diversification in a big way.

Addressing a gathering here, Badal said the state's ambitious crop diversification programme was aimed at supplementing income of farmers, especially the small and marginal ones, and check the alarming depletion of ground water due its over exploitation.

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The Chief Minister pointed out that agriculture as a profession is now on the decline due to marginal profits.

Badal categorically asked farmers to refrain from growing paddy and shift to alternative crops like Basmati, maize, sugarcane, vegetables and fruits.

Cultivation of these crops is not only highly profitable, but is also less water intensive than paddy, he said adding that the state government has already urged the Centre to evolve a marketing mechanism for promotion of maize cultivation by announcing a Minimum Support Price.

Pre-monsoon rains lash Kerala: India Meteorological Department (ET 27/5/2013)

Pre-monsoon showers have hitKerala in the past two days with conditions favourable for the onset of the monsoon.

According to the India Meteorological Department, conditions are becomingfavourable for the further advancement of the southwest monsoon over parts of south and central Bay of Bengal and parts of northeast Bay of Bengal during the next three days.

"Rains have begun in one or two places in Kerala and we expect the activity to pick up in the coming days," said DS Pai, director, long-range forecast, IMD. The department has forecast that the southwest monsoon will set in over Kerala by June 3 with a model error of four days.The southwest monsoon normally arrives in Kerala around June 1.

It advances northwards usually in surges and covers the entire country by July 15. In 2012, the monsoon hit Kerala on June 5, four days after its usual arrival date.

Since May 24, Thiruvananthapuram received 10 mm of rain, Kochi 43 mm and Alleppy 10 mm. "From May 27-28, rains will continue at many places over Kerala and cover most of the west coast including coastal Karnataka, Konkan and Goa. The monsoon is likely to arrive by June 1," said Mahesh Palawat, chief synoptician, Skymet Weather Services.

In its first forecast in April, IMD predicted a normal monsoon this year with overall rainfall expected to be 98% of the long-period average. IMD says that if 60% of the 14 stations -- Minicoy, Amini, Thiruvananthapuram, Punalur, Kollam, Allapuzha, Kottayam, Kochi, Thrissur, Kozhikode, Thalassery, Kannur, Kudulu and Mangalore -- report a rainfall of 2.5 mm or more for two consecutive days after May 10, the onset over Kerala can be declared on the second day.

Further, there should be a significant increase in humidity. Winds should be strong and blow from southwest or in the west-southwest direction. The June-September monsoon, which traverses the entire country form Kanyakumari to Kashmir, delivers 70-90% of the annual rainfall over most parts.

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As the monsoon is expected around June 3, farmers in the northern zone of Kerala have been advised to undertake nursery preparation for viruppun rice. Farmers in Konkan and the Western Ghat region are advised to prepare raised beds for nursery sowing of kharif rice and finger millet.

Onset of monsoon in Kerala in the next 4 days, says Met (BL 29/5/2013)

Conditions are becoming favourable for the onset of South-West monsoon over Kerala over the next three to four days, the Met Department said on Wednesday.

GAME-CHANGER

South Arabian Sea, Maldives and the Comorin region, the last three pit-stops on the home stretch, would be covered in that order over the next two days. The ‘low’-turned-depression in the North Bay of Bengal is proving the game-changer, according to seasoned monsoon watchers.

The rains are expected to gather strength after onset, since a Madden-Julian Oscillation (MJO) wave is set to arrive into South Arabian Sea.

The MJO wave travels from west to east high up in the atmosphere, but has significance influence on ground weather. Suitably timed pass-over has also underwritten onset of South-West monsoon in the past.

The pass-over this year follow the onset just by a day or two, say forecasts.

RAIN WAVE

Meanwhile, a US storm tracker agency said that the MJO activity from around June 5 might also set off a rain wave to break away and head towards Oman coast.

It would leave behind a smaller mass of rain, which is shown as slithering up the Konkan coast and land up over south-west Gujarat.

Tuesday’s low-pressure area intensified into a depression and was looking to force its way into Bangladesh coast on Wednesday, second such to do so after cyclone ‘Mahasen.’

Regional Specialised Meteorological Centre, New Delhi, expected the depression to cross the coast in the evening.

But US Joint Typhoon Warning Centre suspected that the storm could stay put over Head Bay of Bengal (off Kolkata) for the night and wriggle into Bangladesh coast the next morning.

If this were to prove true, high winds and pouring rain could bear down on Kolkata, parts of East India and North-East India, Bangladesh and Myanmar.

Monsoon rains hit southern Kerala (ET 2.6.13)

Monsoon arrived on cue in Kerala on the southern coast on Saturday, a top weather official said, boosting prospects for farm output. Monsoon arrived on cue in Kerala on the southern coast on Saturday, a top weather official said, boosting prospects for farm output and alleviating concerns of further

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suffering for key cotton and sugar growing areas hit by drought.

"The monsoon has arrived in Kerala and the large parts of adjoining Tamil Nadu," LS Rathore, director general of the state-run India Meteorological Department, said.

Imports of edible oils, pulses also rise (BS 3.6.13)

Imports of both, edible oils and pulses grew significantly (by 15.5 and 26.21 per cent, respectively) in 2012-13 year-on-year, as India struggled with flat production and rising demand in these two food items.

While imports of edible oils crossed $10 billion in 2012-13 from $9.7 billion, those of pulses were still comparatively less. India imported $2.33 billion of pulses last financial year compared with $1.85 in 2011-12. Analysts blamed the pricing policy of the government in favour of rice and wheat, which do not factor the changing consumption pattern.

Oilseed production dropped almost 8.25 per cent to 29.79 million tonnes in 2011-12 (November-October) because of low kharif harvest on account of uneven rains.

In 2012-13 too, oilseed production is expected to be only marginally better than last year also because of poor rains in the main growing regions of Maharashtra and Gujarat. It is estimated to be around 30.7 million tonnes.

Going forward, experts said domestic oilseed production is falling woefully short of edible oil demand, which would continue to rise further aggravating supply-demand mismatch in the coming years. "India every year needs an additional seven to eight lakh tonnes of edible oils, for which oilseed production has to increase by at least five million tonnes, unthinkable given that India's domestic oilseeds production has stagnated at around 28-32 million tonnes," said executive director of Solvent Extractors Association of India, B V Mehta.

Erratic warming of Indian Ocean could derail monsoon, says Japanese scientist (BL 3/6 /2013)

The raucous start to monsoon along the West Coast is too good to sustain, according to Japanese scientists.

Erratic warming of the Indian Ocean will soon catch up with and even run it down, says Swadhin Behera at the Tokyo-based Research Institute for Global Change.

OCEAN WARMTH

Ocean warmth in the Indian Ocean and where it is concentrated is of crucial significance for South-West monsoon.

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This is similar to the El Nino-La Nina phase in the Pacific Ocean, which too influences Indian monsoon.

But given proximity to the region, Indian Ocean warming pattern has a more direct and immediate impact on weather.

A weak La Nina, in which East of Equatorial Pacific cools relative to West and is mildly favourable to monsoon, has been forecast concurrently.

STRONGLY NEGATIVE

But Indian Ocean abnormalities would neutralise its effect on the monsoon, Behera wrote to Business Line on Monday.

The Japanese agency had earlier sounded a red alert to monsoon, pointing to the rapid warming of the East of Indian Ocean.

This is called the negative phase of Indian Ocean Dipole, a seasonal seesawing of ocean temperatures. What this does to monsoon winds is to misguide them towards the seas off Sumatra where the ocean is very warm and empty their moisture there.

The winds thus bypasses mainland India and rob it of crucial moisture that would otherwise be rained out here.

Exact reverse is the case when the West of the Indian Ocean warms up; it boosts a concurrent monsoon.

Behera is team leader, low-altitude climate prediction research under the climate variation predictability and applicability research programme at RIGC.

“Our SINTEX-F model continues to predict a negative Indian Ocean Dipole,” he said. Present observations also support the predictions.

“In fact, we already see a negative dipole pattern in sea surface temperatures, and even a clearer pattern in sea level anomalies.”

The warm south-east Indian Ocean will hinder the northward migration of (monsoon) rain bands.

“We may see prolonged breaks (in rain),” Behera added.

May hit even June rains

Excerpts from a brief e-mail interaction with Swadhin Behera of the Research Institute for Global Change, Tokyo:

When do you think the negative dipole would start affecting rains?

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The negative dipole conditions are already seen in observed anomalies. So, it could affect the rains even in June.

As the negative dipole matures around July-August, its negative impacts on summer rains could get even worse.

Would this be strong as to offset the sobering influence of a weak La Nina in the Pacific?

Yes, the negative dipole phase appears very strong in the predictions. SINTEX-F and several other models are predicting a weak La Nina.

But we had near-copybook style onset conditions along the West Coast?

Yes, I too noticed it. But the negative warming anomalies (higher relative to West) in the Southeast Indian Ocean might hold down the rain bands, going forward. The breaks will be longer if the negative dipole phase condition continues.

Fresh monsoon pulse to bring rain to West Coast this week (BL 4/6/2013)

The forecast phase of expansive monsoon from the weekend is very much in the making, with a fresh wave of rains projected to approach the West Coast soon. A long-persisting low-pressure area off Oman coast flared up on Tuesday, taking away clouds and moisture and holding back intensity of rain over India’s West Coast.

Fresh rain-maker ‘low’s are expected to spring up over both Arabian Sea and Bay of Bengal, international weather models indicated.

CYCLONIC WHIRLS

India Met Department said on Tuesday that preparatory upper air cyclonic circulations have formed over South Bay and West-central Arabian Sea.

Rains over the West Coast and adjoining interior would prosper despite even the fresh Arabian Sea ‘low’ moving away yet again to Oman coast.

European Centre for Medium-Range Weather Forecasting showed another system parked over North Arabian Sea off the Gujarat coast next week.

Australian Bureau of Meteorology said that the monsoon onset over the Kerala coast was facilitated by a weak Madden-Julian Oscillation (MJO) wave.

NEGATIVE PHASE

The MJO wave passes high periodically over the Indian Ocean from west to east and sets off clouding, rain and storms, apart from monsoon onsets.

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This wave may now be developing and gaining in strength, which explains the fresh wave of expected rain across South Arabian Sea and Bay of Bengal.

The Australian bureau also said that a negative phase of Indian Ocean Dipole was developing, which has already led Japanese counterparts to doubt the health and prospects of the monsoon.

Four of the five models surveyed point to a negative Indian Ocean Dipole, the bureau said.

This phase of the dipole represents rapid warming of the East Indian Ocean off Sumatra, prompting monsoon flows to stream in and rain out moisture at India’s expense.

WEAK LA NINA

The Japanese agency suspected that even June rains could take a hit.

The Australian bureau also concurred with the view that a mild La Nina, a warming trend in the Pacific normally favourable to Indian monsoon, may be evolving.

India Met Department said on Tuesday that the offshore trough, an elongated area of low pressure that acts as a receptacle for monsoon moisture, ran down from Konkan coast to North Kerala coast. Presence of the trough indicates ‘active’ monsoon conditions along the West Coast.

Agro economy of north east region to face flood devastation again (ET 5/6/2013)

Approaching monsoon has started ringing alarm bell in North East Region of India (NER) and Northern West Bengal, two of the worst flood affected areas of the country.

Bengal's latest initiative to form a special '(flood) combat force,' also could not increase the confidence level of perpetually victim areas in the sate. Despite many flood controlling authorities or their projects, flooding and inundation are likely to continue this year too badly hampering agro economy of the entire region.

"A special combat force is being formed to take up flood damage control activities. Specialized on the job, this force can be of great help to the disaster prone areas," said, Irrigation and Waterways Minister Rajib Banerjee. But the announcement could hardly generate any extra confidence in commonly victim areas.

Annual heavy erosion in East Bank of Farakka upstream is one of the largest threats in entire Ganga basin. "This will become violent this year too, be there any force or not," said Mr. M. Alam, senior member of Ganga Bhangan Pratirodh Action Nagorik Committee. Large scale dredging of Ganga to give it strength to withstand 25Lakh cusec monsoon period hydroload was proposed earlier. But, "None is there to arrange the fund of over Rs 1,600 crore needed for the job," said Mr. Alam.

"Water retaining capacity of all foothills rivers has also gone down badly due to heavy siltation. Naturally, flooding of both banks, in case of heavy water flow, has become obvious. Dams or walls are minuscule relief only," said geologist from NBV University Dr. S Sarkar.

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According to National Commission on Flood reports, contribution of NER is very high in national average loss of Rs 1,000 crore due to flood. And, frequency, intensity, spatial coverage or magnitudes of flood damage in NER and NB are increasing year after year.

As per the report of special task force of the Water Resources Development ministry, West Bengal suffered most due to flood in last 50 years. The overall loss was estimated as around Rs 15,000 along with loss of more than 8,700 human lives and over 6 lakh livestock. On an average, floodwater washes out more than 2.5 lakh heater agro land every year causing heavy loss.

To handle the situation, Government of India approved Rs 8,000 crore Flood management Program for 11th Plan period. There was GoI's Critical flood control and anti-erosion schemes worth Rs 305 crore, or scheme for anti-erosion projects in the Brahmaputra and Barak valleys worth Rs 225 Crore. Another State Sector scheme of Rs. 166.68 crore for NER and West Bengal is tere. Above all, Brahmaputra Board has earmarked Rs 800 crore for NBFCC area for the period till 2017. But these all put together could hardly build up any extra confidence level for the victims.

Below-normal rain forecast for July, August dampens spirits (ET 5/6/2013)

A warning that July and August are likely to see below-normal rains has tinged the elation over the monsoon's arrival on schedule. Private weather forecasterSkymet Weather Services has forecast India average rainfall for June at 105%, July at 101%, August at 100% and September at 103%, with the four-month average at 102%.

In its first forecast in April, it said this year's monsoon yield could be 103% of the long-period average (LPA) of 89 cm."The country should receive a normal monsoon in 2013. But, north India will be severely affected in July," said Jatin Singh of Skymet Weather Services. He said the onset of the monsoon over Delhi was expected to be delayed till July 8."There is a negative evolving Indian Ocean Dipole near Indonesia. It can potentially create a scenario that will pull moisture from the Arabian sea and Bay of Bengal towards east Indian ocean and weaken monsoon over India.

As per Skymet, across northern parts of country, the spread of the monthly rainfall in June and September is expected to be normal, whereas July and August are expected to be below normal," said Singh.

By June 4, the southwest monsoon has advanced into parts of central Arabian Sea, entire Goa, parts of south Konkan, south Madhya Maharashtra, Telangana, south coastal Andhra Pradesh, remaining parts of south interior Karnataka and Rayalaseema.

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National Food Security Mission has added to food production: Sharad Pawar (ET 6.6.13)

During the Twelfth Plan, the minister said the scope of NFSM is proposed to be widened to include coarse cereals under the mission.

The implementation of the National Food Security Mission (NFSM) has resulted in an increase in food grain production by 42 million tonne as against the target of 20 million tonne set for the Eleventh Plan.

Agriculture and Food Processing Industries minister Sharad Pawar on Wednesday informed members of parliamentary Consultative Committee attached to his ministry that various interventions under NFSM have resulted in the distribution of almost 75 lakh of farm equipment, nearly 175 lakh quintals of highyielding seeds of rice, wheat and pulses, and knowledge transfer through more than 49,000 farmer field schools and 8 lakh field demonstrations. During the Twelfth Plan, the minister said the scope of NFSM is proposed to be widened to include coarse cereals under the mission. A target of additional 25 million tonne of foodgrain production has been proposed during the Twelfth Plan -- 10 million tonne of rice, 8 million tonne of wheat, 4 million tonne of pulses and 3 million tonne of coarse cereals.

"NFSM has helped to widen the food production basket of the country. The production of foodgrains in 2011-12 was at a record of 259.32 million tonne against a target of 245 million tonne. In 2012-13 too, despite drought in some parts of the country, foodgrain production is on course to realise a target of 254.24 million tonne," he said.

Monsoon set to consolidate in 2 days, hit Maharashtra, Gujarat (BL 6/6/2013)

The first significant burst of rain about a week after the onset of South-West monsoon is about to happen along the West Coast anytime from now.

This comes on the heels of a ‘rogue’ low-pressure area over Northwest Arabian Sea (off Oman coast) dying out after landfall, weather models indicated.

SIGNAL CHANGE

The ‘low’ was generated as part of the monsoon onset phase; it has been appropriating south-westerly flows bound for India’s West Coast even as it waxed and waned in strength off Oman coast.

Two days is all what is now needed to make a signal change in monsoon circulation and strength, said Akhilesh Gupta, expert meteorologist and monsoon watcher.

The stage is well set for the consolidation, which would pull in monsoon flows to cover entire peninsula; Gujarat; South Madhya Pradesh; and parts of East and North-East India, he told Business Line.

“I do not see any threat or disruption to the flows at least over the next eight to 10 days,” he said.

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RACE TO NORTH

This period would see the monsoon race to North along the West Coast into Konkan-Mumbai and South Gujarat.

Gupta also saw probability of a ‘monsoon vortex’ popping up off the Konkan coast, the kind of which had set off the infamous Mumbai floods in 2005.

The upshot is not just a strong monsoon phase along the West Coast but also new-found activity in the Bay of Bengal.

The Bay has been languishing for sometime after Cyclone Mahasen churned it over late last month, delaying the onset of monsoon in the north eastern States.

BAYACTIVITY

But activity is building slowly, which would get a boost with the Arabian Sea arm of the monsoon shifting gears.

Akhilesh Gupta hoped that this would help the formation of the all-important seasonal trough along the plains of North India from south-east to north-west (West Rajasthan to Head Bay of Bengal).

Cool monsoon easterlies find their way into the farming heartland of India through this trough formation.

This would hopefully lift heat wave conditions in East, Central and Northwest India.

Just as the offshore trough along West Coast signals ‘active’ Arabian Sea arm of monsoon, so does seasonal trough in the plains with respect to Bay of Bengal arm.

National Food Security Mission has added to food production: Sharad Pawar (BL 6/6/2013)The implementation of theNational Food Security Mission (NFSM) has resulted in an increase in food grain production by 42 million tonne as against the target of 20 million tonne set for the Eleventh Plan.

Agriculture and Food Processing Industriesminister Sharad Pawar on Wednesday informed members of parliamentary Consultative Committee attached to his ministry that various interventions under NFSM have resulted in the distribution of almost 75 lakh of farm equipment, nearly 175 lakh quintals of highyielding seeds of rice, wheat and pulses, and knowledge transfer through more than 49,000 farmer field schools and 8 lakh field demonstrations. During the Twelfth Plan, the minister said the scope of NFSM is proposed to be widened to include coarse cereals under the mission. A target of additional 25 million tonne of foodgrain production has been proposed during the Twelfth Plan -- 10 million tonne of rice, 8 million tonne of wheat, 4 million tonne of pulses and 3 million tonne of coarse cereals.

"NFSM has helped to widen the food production basket of the country. The production of foodgrains in 2011-12 was at a record of 259.32 million tonne against a target of 245 million tonne. In 2012-13 too, despite drought in some parts of the country, foodgrain production is on course to realise a target of 254.24 million tonne," he said.

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Limited growth in land, rising production cost restricts agri-sector growth : FAO (BS 7.6.13)

Growing resource constraints, increasing environmental pressures also likely to add to trouble

The growth in global agricultural production is expected to slow in this decade due to limited expansion of agricultural land, rising production costs, growing resource constraints and increasing environmental pressures, the Food and Agricultural Organisation of the United Nations, said in a report.

In the decade between 2013 and 2022, the global agricultural production is likely to grow at 1.5% a year on average as compared to 2.1% between 2003 and 2012. The supply of farm commodities, however, should keep pace with global demand, the report said.

The FAO expects prices to remain above historical averages over the medium term for both crop and livestock products due to a combination of slower production growth and stronger demand, including for biofuels.

The agriculture has been turned into an increasingly market-driven sector, as opposed to policy-driven as it was in the past, thus offering developing countries important investment opportunities and economic benefits, given their growing food demand, potential for production expansion and comparative advantages in many global markets.

However, production shortfalls, price volatility and trade disruption remain a threat to global food security. "As long as food stocks in major producing and consuming countries remain low, the risk of price volatility is amplified. A wide-spread drought such as the one experienced in 2012, on top of low food stocks, could raise world prices by 15-40 percent," the report jointly published by OECD and FAO, said.

China, with one-fifth of the world's population, high income growth and a rapidly expanding agri-food sector, will have a major influence on world markets, and is the special focus of the report. China is projected to remain self-sufficient in the main food crops, although output is anticipated to slow in the next decade due to land, water and rural labour constraints.

Presenting the joint report in Beijing, OECD Secretary-General Angel Gurría, said, "The outlook for global agriculture is relatively bright with strong demand, expanding trade and high prices. But this picture assumes continuing economic recovery. If we fail to turn the global economy around, investment and growth in agriculture will suffer and food security may be compromised."

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"Governments need to create the right enabling environment for growth and trade," he added. "Agricultural reforms have played a key role in China's remarkable progress in expanding production and improving domestic food security."

FAO Director-General José Graziano da Silva, said: "High food prices are an incentive to increase production and we need to do our best to ensure that poor farmers benefit from them. Let's not forget that 70 percent of the world's food insecure population lives in rural areas of developing countries and that many of them are small-scale and subsistence farmers themselves."

He added: "China's agricultural production has been tremendously successful. Since 1978, the volume of agricultural production has grown almost five fold and the countryhas made significant progress towards food security. China is on track to achieving the first millennium development goal of hunger reduction.

While China's production has expanded and food security has improved, resource and environmental issues need more attention. Growth in livestock production could also face a number of challenges. We are happy to work with China to find viable and lasting solutions."

Developing countries to gainDriven by growing populations, higher incomes, urbanization and changing diets, consumption of the main agricultural commodities will increase most rapidly in Eastern Europe and Central Asia, followed by Latin America and other Asian economies.

The share of global production from developing countries will continue to increase as investment in their agricultural sectors narrows the productivity gap with advanced economies. Developing countries, for example, are expected to account for 80 percent of the growth in global meat production and capture much of the trade growth over the next 10 years. They will account for the majority of world exports of coarse grains, rice, oilseeds, vegetable oil, sugar, beef, poultry and fish by 2022.

To capture a share of these economic benefits, governments will need to invest in their agricultural sectors to encourage innovation, increase productivity and improve integration in global value chains, FAO and OECD stressed.

Agricultural policies need to address the inherent volatility of commodity markets with improved tools for risk management while ensuring the sustainable use of land and water resources and reducing food loss and waste.

Monsoon to hold strong in central India, north-west for 10 more days (BL 9/6/2013)

South-West monsoon is forecast to hold strong variously over West Coast, central and adjoining east India and north-west India for another 10-12 days.

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Parts of North-East India; south-east Peninsula (interiors of Karnataka, Andhra Pradesh and entire Tamil Nadu) could be sole exceptions, according to forecasts by the US agencies.

BLOW-UPS SEEN

South Gujarat; Mumbai-Konkan; Coastal Karnataka and adjoining North Kerala are expected to witness heavy to very heavy showers during this period.

Also joining them would be Uttarakhand; Madhya Pradesh; Chhattisgarh; Odisha and adjoining north coastal Andhra Pradesh during June 8-14.

This would be followed by rain blow-ups over east Rajasthan, Haryana and Delhi during June 15-21 as the monsoon enters north-west India ahead of the schedule.

In this region, extreme west Rajasthan; north of Jammu and Kashmir; and parts of north eastern States might witness below just normal to below normal rainfall.

ABOVE NORMAL

The monsoon would mostly be above normal until June 20; it could relent a bit later, and trend towards the historical normal closer to July, US agencies indicated.

On Sunday, the India Met Department said that the monsoon had further advanced into Konkan; Marathawada; Telangana; southern parts of Saurashtra, East Gujarat and Vidarbha; most of Madhya Maharashtra and some more parts of South Chhattisgarh.

The northern limit of monsoon passed through Veraval, Surat, Jalgoan, Amraoti, Chandrapur, Jagdalpur, Puri, Kolkata, Jalpaiguri and Gangtok.

TROUGH HOLDS

It would advance into Gujarat; Chhattisgarh and Odisha; remaining Madhya Maharashtra, Vidarbha, West Bengal and Sikkim; and parts of South Madhya Pradesh, Jharkhand and Bihar during the next three days.

The offshore trough, an elongated area of low pressure along the West Coast, rolled out along the full length from Gujarat coast to Kerala coast indicating monsoon strength.

Along the plains of north-west India, the crucial land-based trough from west Rajasthan to Bay of Bengal was in the process of evolving.

On Sunday, it ran down from north Rajasthan to east Assam and merely needed to reorient itself so that the eastern end dipped into the Bay.

This would set up path for monsoon easterlies from the Bay to flow in and fill east and north-west India to bring rains into the farming heartland.

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Prospect of good monsoon lifts economic confidence: Survey (ET 11/6/2013)

India's economic confidence improved marginally during the month of May on the prospect of good monsoon, says a survey by global research firm Ipsos.

The survey titled 'Ipsos Economic Pulse of the World' noted that India's economic confidence rose by three points to 66 per cent in May 2013 compared to the preceding month making it the fourth most economically confident country in the world after Saudi Arabia, Sweden and Germany.

"In India monsoon is key to determine agricultural output, inflation, consumer spending and overall economic growth. Normal rainfall signals growth and prosperity, as higher farm output would rein in food prices and help the government to take steps to cut the fiscal deficit and farm subsidies," Ipsos India CEO Mick Gordon said.

"A stronger economic outlook can lift sentiment in equity markets, mainly of companies selling products in rural areas, including consumer goods and automobiles," he added.

Agriculture sector, which accounts for 17-20 per cent of the GDP, is largely dependent on the rains. So a fall in agriculture "has a ripple effect on the economy".

"With 75 per cent of Indians directly or indirectly dependent on agriculture a good monsoon will boost the output of several commodities, reducing the burden on imports," the survey noted.

The global assessment of national economies surveyed in 24 countries remains consistent in May as 36 per cent of global citizens rate their national economies to be 'good'.

Saudi Arabia (80 per cent) continued to lead the world on national economic assessment. It is followed by Sweden (70 per cent), Germany (67 per cent), India (66 per cent) and China (64 per cent).Meanwhile, 36 per cent Indian citizens surveyed believe that their local economy which impacts their personal finance is good, a sharp drop of five points and an optimistic 45 per cent people expect that the economy in their local area would be stronger in next six months.The survey was conducted among more than 18,000 people in 24 countries.

Early monsoon brightens prospect of bumper kharif harvest (BS 11.6.13)

As the southwest monsoon makes a steady progress across most parts of India, the prospects of having a bumper harvest during the kharif season has brightened, provided the rains maintain the momentum in the coming weeks.

"The first indications are very positive for kharif, but all will depend on how the rains pan out in the next two months as July and August are the most crucial months for sowing of kharif crops during the four-month rainy season," a season government official said.

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Rice, sugarcane, oilseeds, cotton, jute and pulses are some of the main crops grown during the kharif season, sowing for which starts around June-July, while the crop is harvested in October.

According to the Indian Meteorological Department (IMD), July is expected to receive the highest 28 cm of rainfall, while August will receive around 26 cm out of the total 89 cm during the four-month southwest monsoon season that starts from June.

In Gujarat, which received the season's first pre-monsoon showers in the last three days, the timely onset is being seen as beneficial for the cotton crop, which had suffered vastly last year due to a sudden break in showers.

A full-fledged monsoon is yet to set in. "The MET department has given June 12 as the onset of monsoon in the state (Gujarat). What we see now is the pre-season rains, caused due to local formation," said a state agriculture department official. However, farmers having irrigation facility have started sowing, mainly cotton. "These rains will benefit cotton sowing. We are waiting for report of sowing of other crops," said the official.

The rains have also lashed several parts of Maharashtra, Odisha, West Bengal, northeast states and Jharkhand, according to IMD. The MET office said the southwest monsoon was expected to gather further momentum in the coming days and cover the entire Madhya Pradesh, Gujarat, Maharashtra and eastern parts of the country, including east Uttar Pradesh, Bihar and Jharkhand. In the first week of June, the southwest monsoon was just one per cent below normal, with southern India receiving the maximum 62 per cent above average rainfall. Rainfall in some parts of northwest India was deficient, but experts believe it will be bridged once the rains set in.

"This (the early onset of southwest monsoon) is definitely a positive development and will have an impact on sowing and further growth of kharif crops, but all will depend on the fact whether the momentum is maintained in the coming weeks," said Ramesh Chand, director of the National Centre for Agricultural Economics and Policy Research (NCAP).

The MET office has predicted that southwest monsoon in 2013 will be normal with quantitatively rains being 98 per cent of the long period average (LPA).

A department of agriculture data showed that rice has been planted in around 0.52 million hectares till last week, which was 19 per cent less than last year, while oilseeds was sown in around 7,000 hectares, almost 27 per cent less than the same period last year.

OECD finds Indian economic growth 'below global trend' (BS 11.6.13)

The CLI, which anticipate the economic trends for six to nine months, cover various economic data

India’s growth prospects continue to remain “below trend” even as most of the major economies are witnessing moderate improvements, Paris-based think tank Organisation

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for Economic Cooperation and Development (OECD) said today.

While economic activities are close to trend rates in China, growth seems to be firming up in the United States and Japan. OECD’s conclusions are based on composite leading indicators (CLI) that are designed to anticipate turning points in economic activities.

“The CLIs for the United Kingdom, Canada, China and Brazil point to growth close to trend rates. The CLI indicates that growth is losing momentum in Russia, whereas for India, it continues to indicate growth below trend,” OECD said.

India’s CLI stood at 97.3 in April, same as in February and March. In January, the reading was better at 97.5.

OECD said that CLIs indicate moderate improvements in growth in most major economies while the United States and Japan are seeing firming economic growth. “In the euro area as a whole, the CLI continues to indicate a gain in growth momentum. In Germany, the CLI shows that growth is returning to trend,” it noted

According to OECD Deputy-Secretary General Richard Boucher, India needs another round of reforms for better GDP growth and rid itself of unnecessary regulations to reduce corruption, “Our basic view is that India needs another round of reforms,” he said at the sidelines of the World Economic Forum (WEF) on East Asia held in Nay Pyi Taw, Myanmar.

Asked as to what India could do to have improved economic growth, Boucher said, “India needs to do things to increase government efficiency, smoothing the way for projects, reduce regulatory burden on companies and open up some more to competition. So, we think that another round of reforms is necessary.”

“It will bring much broader benefits than opening up one specific sector. We are starting now the next economic survey of India which will come out next year. We have had some of the initial discussions and will have much more thorough discussion that will be coming out next year,” Boucher added.

Appreciating government’s decision to open up FDI in multi-brand retail, he said, “It has a lot of benefits - for farmers, consumers, supply chains and better pricing mechanism. I think that is very important.”

On sharing of information among nations to curb tax evasion, Boucher said, “What countries are moving towards is more automatic information exchange. We have been proposing and supporting that this kind of stuff can be very helpful.”

Also, he said, OECD is working on, and where India has been a strong contributor, is ‘Base Erosion Profit Shifting’.

The BEPS project is looking at whether, and if so why, the current rules allow for the

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allocation of taxable profits to locations different from those where the actual business activity takes place.

The OECD is a grouping of mostly rich nations. India’s economic growth slowed to a decade-low of five per cent in the last financial year from 6.2 per cent in the 2010-11 period.

Monsoon to cover most parts by June-end (BS 12.6.13)

Heavy rainfall expected in HP, Uttarakhand, UP, Delhi in next 24 hours: IMD

The southwest monsoon, the lifeline of millions of farmers, is expected to cover 90-95 per cent of the landmass by the end of June, within its normal time, said the India Meteorological Department (IMD).

So far, this year’s rains had been almost 12 per cent more than normal and among the best in the past few years, Laxman Singh Rathore, IMD’s director-general told Business Standard.

Rathore said rains might move over western and northern India six or seven days ahead of the scheduled arrival date and cover 90-95 per cent of the country by the end of this month. “June rainfall is definitely going to be surplus this year,” said Rathore. India receives 14-16 per cent of the total rainfall during the four-month southwest monsoon, which is estimated at 89 centimetres.

Rains during the four months account for almost 70 per cent of the total precipitation that the country receives in a year and are hence crucial for agriculture.

According to Rathore, the pre-monsoon showers have been excellent across north, central, western and eastern parts of the country, which has further raised hopes. “In fact, we are going to issue advisories of ‘heavy’ to ‘very heavy’ rainfall in Himachal Pradesh, Uttarakhand, plains of Uttar Pradesh, Delhi and the national capital region.”

He said the overall situation looked promising for agriculture, as water levels in major reservoirs across the country were also at a comfortable position. “Early rains are good for kharif sowing, particularly that of paddy and coarse cereals. I also believe that these rains, particularly in western India, would help in meeting the water shortage in cotton and sugarcane crops,” said Rathore.

According to Mahesh Palawat, chief meteorologist at Skymet Weather Services Ltd, the rain till now has been before time and it will cover Gujarat, Maharashtra, south Chhattisgarh, Odisha and Gangetic West Bengal by tomorrow, 24-36 hours before its scheduled date of arrival. “The western ends of the monsoon trough is progressing much faster than the eastern troughs, and will cover the entire Gujarat much ahead of its scheduled arrival date on June 15.”

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Palawat added the pre-monsoon showers over northwest India — Delhi, Haryana, Punjab, and Himachal Pradesh — are expected to start from tonight or early tomorrow and continue till June 22-24. “We expect that the pre-monsoon showers in north India will be largely during late evening, night or early morning hours,” Palawat added. He said the actual southwest monsoon would arrive over Delhi around July 5-7. Skymet had earlier predicted rains would reach Delhi during the first week of July, while IMD said it would be around June 22.

Palawat said the southwest monsoon’s intensity would go down in July in parts of Bihar, Uttar Pradesh, north Madhya Pradesh, east and north Rajasthan, Delhi, Haryana and Punjab.

3% excess monsoon so far; Delhi may get early seasonal rain (ET 12/6/2013)

After bringing bountiful showers to most parts of the country, south-west monsoon is knocking on the doors of Uttar Pradesh and ready to rain over Delhi at least a week ahead of schedule.

The latest figures from the weather office released this evening show most parts of the country getting excess rains since the onset of monsoon over Kerala on June 1.

India Meteorological Department Director General L S Rathore said monsoon was expected to bring its showers to Delhi at least a week ahead of the normal onset date of June 29. The earliest onset over Delhi was on 2008 when monsoon rains reached the capital on June 15.

Monsoon has already covered 50 per cent of the country's landmass bringing 23 per cent excess rains to states like Kerala, Andhra Pradesh, Karnataka, Maharashtra, Madhya Pradesh, Chhattisgarh and parts of Gujarat.

"The northern limit of monsoon continues to pass through Okha, Ahmedabad, Rajgarh, Satna, Ranchi, Berhampore, Jalpaiguri and Gangtok," a weather official said.

Though June rainfall accounts for only about 18 per cent of the total rains during the four-month monsoon season, they are important as they set the tone for the sowing of the kharif crops.

The IMD, in its annual long term forecast issued in April, had forecast a normal monsoon this year with 98 per cent rainfall of the long period average.

Meanwhile, pre-monsoon light to moderate showers are expected to commence over Delhi and other parts of north-west India during the next three days.

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Outlook for global food markets improves: UN (BL 13/6/2013)

The overall outlook for supplies of basic food commodities to global markets has improved since poor wheat harvest and tight conditions a year ago, the UN’s food agency said today.

The cereal supply-and-demand balance in the 2013-2014 season was expected to be “comfortable,” the agency said, but it warned about the pace of imports of rice by China.

The agency said that it expected food commodity markets to be more balanced in 2013 to 2014, with rising prices on fish and meat forecast to offset lower prices for some commodities such as sugar.

The Rome-based Food and Agricultural Organisation (FAO) said in its bi-annual Food Outlook report that the “global food import bill is forecast to reach $1.09 trillion in 2013 — 13 per cent below the record of 2011 but close to the 2012 estimate.”

World sugar production was estimated to reach a new record in 2012-2013, “one that will be more than sufficient to cover projected global consumption,” it said.

“After a relatively tight situation in 2012-2013, characterised by reduced grain supplies and high prices, good production prospects and a likely replenishment in world stocks could pave the way for calmer markets and some easing of prices in the new season,” it said.

The news was also positive for wheat, with record world production this year boosting supplies. Lower import demand was also likely to stabilise the market and keep prices down.

“The bulk of the recovery is forecast to be concentrated in some of the major producing countries that harvested poor crops in 2012, in particular in Europe and the Black Sea region,” it said.

In terms of rice, the FAO said international prices had generally been stable in the first five months of 2013, but that market attention was now “focusing on future decisions regarding releases from public stocks in Thailand and on India’s availabilities for export.”

The agency said the pace of China’s rice imports was also “becoming critical.”

International prices for meat, dairy and fish were expected to rise, the report said.

“World meat production is anticipated to grow by only 1.4 per cent in 2013, to 308.2 million tonnes. Meat prices remain at historically high levels which, as of May, have not shown signs of decreasing in spite of reduced feed costs,” it said.

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Meat prices have remained at historically high levels since the early part of 2011. Export prices on average this year rose marginally for poultry and pork, remained stable for beef, and fell for lamb. (This article was published on June 13, 2013)

Monsoon rains above average for second straight week (ET 13/6/2013)

Northern India was cloudy and drenched by showers in many places today as southwest monsoons arrived in Rajasthan five days before it was due, bringing about a sharp decline in temperatures.

Heavy rainfall and inclement weather was reported in several parts of the region where a farmer was killed in Himachal Pradesh by a lightning bolt in Mandi district this morning.

In Delhi, scattered showers and overcast conditions meant it was a pleasant day for residents with the maximum temperature dropping seven notches from yesterday to settle at 32.8 degrees.

The minimum in the national capital was a notch above normal at 28.8 degrees on what was a highly humid day with moisture content in air ranging between 62 and 72 per cent.

The weatherman has predicted a decent spell of rain over the next couple of days which isexpected to keep the mercury below normal levels.

The India Meteorological Department had said yesterday that monsoon was expected to hit Delhi at least a week ahead of its normal onset on June 29.

Weather officials in Rajasthan, meanwhile, announced today that the southwest monsoon had entered the state days before its expected arrival date of June 18.

The monsoon entered through southeast Rajasthan and activated in Udaipur region, MeT officials said, adding that conditions are favourable for its further advance.

Several places in the state received light to moderate rainfall in the last 24 hours with Balesar and Shergarh towns recording maximum of 9-cm rainfall each.

Monsoon covers entire country but may begin to weaken (BL 16/6/2013)

The South-West monsoon has covered the entire country at least a fortnight ahead of schedule in what has been a spectacular and punishing opening spell.

Progress of monsoon so far has been good but it may start weakening from July, a former Director-General of the India Met Department told Business Line.

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ABOVE NORMAL

June was expected to turn in above normal rainfall at the end of one of the best productive phases following an onset, he said.

Meanwhile, Climate Prediction Centre of the US National Weather Services suspected that monsoon activity might start to weaken from next week. Rains may relapse to below ‘climatological mean’ (historical normal for a given period) towards end-June and into July.

DRY WINDS

Paresh Nerurkar, a senior commander with Air India, told Business Line from Kolkata on Sunday that he could detect dry westerlies penetrating the North-West as they blew in from across the border.

On Sunday, the IMD too detected a western disturbance with a strong band of westerly winds parked just outside of Rajasthan-Gujarat. US National Centres of Environmental Prediction too showed skies clearing up over Northwest India (especially western parts) later during this week.

A low-pressure area was bringing heavy rains over Central India but could weaken under the onslaught of the dry westerly winds.

MONSOON LULL?

Drawing from experience, he said conditions reminded him of an impending lull in monsoon. ‘Break-monsoon’ is an inevitable recess after a rain pulse runs it course.

Depending on the extent to which it sustains, break-monsoon can decide fate of the early sown crops, especially during the humongous run in the onset phase of monsoon this year.

The former top official of Met Department cited model predictions to indicate that monsoon could hold good over North India until at least June 20 (Thursday).

It might weaken slightly in the first week of July. As of now, one of the regions where it had been weak was Bihar, he added.

Kharif planting picks up as monsoon advances (BL 14/6/2013)

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With the monsoon covering two-thirds of the country by mid-June ahead of schedule, planting of key kharif crops such as rice, oilseeds and cotton has picked up.

The sowing may get a further boost as the India Meteorological Department (IMD) on Friday maintained that the South-West monsoon will be normal for July and August – the two key months for planting and growth of kharif crops.

Rainfall for the country as a whole is likely to be 98 per cent of the long period average of 89 cm for the June to September period.

TOTAL ACREAGE

However, the total kharif acreage so far is lower than last year, largely on account of shortfall in sugarcane acreage, as drought in parts of Maharashtra and Karnataka had led to poor planting.

RICE ACREAGE

Meanwhile, transplanting of rice has picked up in Andhra Pradesh, Kerala, Karnataka and Tamil Nadu, while it is sluggish in Odisha and Assam among others compared with last year.

Total rice acreage, so far, is lower by about 10,000 hectare area (ha) over the last year.

OILSEEDS

The area under oilseeds is marginally higher than last year, as planting of groundnut and soyabean has commenced in the key growing States of Gujarat and Madhya Pradesh.

Karnataka has seen a higher planting of oilseeds such as groundnut, sunflower, soyabean and sesame, accounting for close to two-thirds of the planted area so far.

MORE RAINS

The timely arrival of monsoon and good rainfall distribution has resulted in 28 per cent more rains so far since June 1.

Of the 36 meteorological sub-divisions, 27 have received excess rains, while four have received normal and two are deficient so far.

The latest forecast by the weather department of normal monsoon for July and August should augur well for kharif crops.

COTTON AREA RISES

So far, cotton acreage has also seen a marginal increase over last year as farmers in Andhra Pradesh and Karnataka are planting more area under the fibre crop.

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Andhra has reported a higher area of 1.13 lakh ha under cotton, while in Karnataka the acreage is up by about half a lakh hectares over the last year at 1.26 lakh ha.

In North India, planting is almost complete and the key States – Punjab and Haryana –have reported a marginally lower acreage.

In Punjab, cotton acreage is lower by 13,000 ha over last year at 5.03 lakh ha, while Haryana has seen a shortfall of 29,000 ha at 4.86 lakh ha.

Other Northern States – Rajasthan and Uttar Pradesh – have also seen a marginal shortfall over last year.

In Gujarat, cotton planting is yet to gain momentum and the acreage so far is lower by about 50,000 ha, while Maharashtra is yet to report the numbers.

Above normal rainfall a boost for kharif season in A.P. (BL 15/6/2013)

The kharif agricultural season is progressing well in Andhra Pradesh, thanks to good rains in the first fortnight of this month.

The State as a whole received 88 mm of rainfall since June 1, which is 69 per cent more than the normal 52.1 mm.

This is seen as a good tiding for the State which reeled under drought last year and had deficient rainfall in 2011, vastly affecting agricultural operations in kharif.

So far, different crops were sown in 4.06 lakh hectares in various districts though it is just five per cent of the total season’s sown area of 81.12 lakh ha.

Jurala on river Krishna is currently holding 4.14 tmc ft of water, one tmc ft more than last year. Water storage level in Nagarjuna Sagar touched 150 tmc ft while in Srisailam it is 37.76 tmc ft.

In the Godavari river basin, Sriram Sagar is brimming with 10.10 tmc ft of water storagewhile the Godavari Delta System is holding 3.04 tmc ft. The level in Singur is just 4.78 tmc ft, much less than the 10.18 tmc ft storage by this time last year.

“The rainfall recorded so far this year in the State is the highest in the last ten years. Copious rainfall is expected throughout this season and Andhra Pradesh may receive an overall rainfall of 103 per cent as per the Met Department’s forecast,” the state Disaster Management said in a release.

Meanwhile, Chief Minister N Kiran Kumar Reddy directed the authorities concerned to ensure seeds and other farm inputs were made available to farmers in required quantities

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as the sowing operations were in full swing. (This article was published on June 15, 2013)

Excess monsoon so far; July-Aug to get normal rains (ET 14/6/2013)

As monsoon makes rapid progress, weather scientists today said the annual rains would cover the entire country ahead of schedule but were skeptical about showers in September.

"Monsoon has been very good so far having covered two- thirds of the country's land-mass," Laxman Singh Rathore, Director-General of India Meteorological Department, told reporters here.

Releasing an update on the monsoon forecast, he said the country would receive normal and fairly distributed rain in July and August. Rainfall is expected to be at 101 per cent of the long-term average in July and 96 per cent in August.

For the country as a whole, monsoon has been 28 per cent excess since onset over Kerala on June 1.

Rathore, who has vast experience in agro-meteorology, said that early onset of monsoon has led to early sowing, particularly of coarse cereals in last year's drought-hit regions.

"Whenever there is timely sowing, we have seen that the production is good. Particularly with respect to drought-hit regions of 2012-- the semi-arid corridor which produces coarse cereals there has been early sowing," he said.

Also, the bright side for paddy crop is that with timely onset of monsoon nursery raising is in place. "This would facilitate early or timely cross planting," he said.

Rathore said for long-term crops like cotton, sugarcane and plantation crops the irrigation requirement has vanished due to good rains, which would lead to lower cultivation costs and healthy crop.

The weatherman said rainfall has been good in drought-hit with Marathwada getting 32 per cent excess rains, Vidarbha (96), Madhya Maharashtra (82), north interior Karnataka (53), south interior Karnataka (41) and Saurashtra and Kutch 200 per cent excess rains.

Monsoon rains seen covering India before mid-July (ET 14/6/2013)India's monsoon rains are a week ahead of schedule, powering across two-thirds of the country by June 14 and heavier than normal, but the weather office is sticking to its forecast for average rains during the entire four-month period.

Heavier than normal rains can trigger flooding but at this stage in the June to September season, they spur planting of crops. India's biggest concern is drought during a monsoon,

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with rains crucial for the 55 per cent of farmland without irrigation.

The monsoon should cover the whole of India before the usual mid-July timing and their distribution over major crop-growing regions should be fairly even, B.P. Yadav, a director at the state-run India Meteorological Department (IMD), said on Friday.

Rainfall is expected to be at 101 per cent of the long-term average in July and 96 per cent in August, two key months for the planting and maturing of crops.

The strong start to the June to September monsoon boosts prospects of robust farm output. That could help the economy and hold down inflation, a critical concern for India's coalition government as it readies for a round of state polls this year and a national election by May 2014.

India is one of the world's biggest producers and consumers of rice, sugar and other food agricultural commodities. A strong monsoon will underpin government confidence harvests will be ample to cover the extra grains needed for its plans for a $24 billion welfare scheme to give cheap food to more of its poor.

Monsoon: 68% surplus rainfall in country (ET/ 17/6/2013)

Monsoon has brought bumper showers this year, with the country receiving a remarkable 68 per cent surplus rainfall till today.

29 out of the 36 subdivisions have received excess rainfall so far, statistics released byIndian Meteorological Department (IMD) said today.

According to the data, the normal expected rainfall in the country from June 1 to June 17 is 67.2 mm, while the rain gauges have measured 112.9 mm of rain so far, which is 68 per cent more than normal.

Of the 36 subdivisions, excess rains have been received at 29, normal at three, deficient at one and scanty at three.

"This surplus is fortunately very well spread. As of now 91 per cent of the geographical area of the country has received either normal or excess which is a very positive sign," said IMD Chief LS Rathore.

"It is a crop sowing stage and rainfall at this stage is very crucial. Only 9 per cent which is primarily confined to East and most of it is North-East where rainfall is either deficient or scanty will now fill up," he said.

Rathore said fortunately north-eastern India had received a very good pre-monsoon rainfall. So this deficiency doesn't give any kind of stress which you can perceive.

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However, because of the heat in the last week, there were some casualties but that will also be now under control.

Talking about Uttarakhand, which has been lashed by very heavy rains in the last couple of days, Rathore said, "For another 24 hours, Uttarakhand will continue to get some rainfall...thereafter progressively the system is likely to move towards East, so also the rainfall bank which is going to migrate to East India and thereafter particularly beyond 20th of June, the rain will pick up in the north-eastern region.

Actually the reason is that, the monsoon circulations' interaction with the western disturbance also gets a fillip because of the organic lifting over Uttarakhand. But now after 24 hours, situation is going to ease out from this part of the country, he said.

Monsoon covers India by mid-June, earliest ever: Met official (ET 17/6/2013)

Monsoon rains have covered the entire country a month ahead of schedule, brightening the prospects for a bumper output of summer-sown crops such as rice, oilseeds and cotton in one of the world's leading producers.

The rains usually cover all of India by mid-July, but this year it happened on June 16, the earliest such occurrence on record, a senior official at the India Meteorological Department said.

A strong start to the monsoon aids farm output as about 55 percent of the south Asian nation's arable land is rain-fed. It can also help hold down inflation, a critical concern for India's coalition government, which is preparing for national elections in 2014.

The farm sector accounts for about 15 percent of India's near $2-trillion economy, Asia's third-biggest.

"We expected an early coverage, but not so fast," said the Meteorological Department official, who did not want to be named as he was not authorised to speak to the media.

"A very strong pulse over the northwest region helped the monsoon to cover the entire country last night," said another weather official.

Analysts said the early rains should help boost output of summer crops by giving them more time to mature.

"An early sowing of summer crops like rice, cane, soybean, corn and cotton will give them more time to mature and lead to higher yields," said Prasoon Mathur, senior analyst at Delhi-based brokerage Religare Commodities.

Heavy showers would also help soften soils in drought-hit areas, including the major cane-growing state of western Maharashtra, Mathur added.

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Maharashtra was hit by drought last year and needs plentiful and timely rain to assist a recovery.

Farmers expect to see power costs fall as early monsoons reduce the need for irrigation, said Sudhir Panwar, president of farmers' group Kishan Jagriti Manch.

The current strong phase in the four-month long rainy season is expected to last through this week, and could then slow early next week, the first official said.

But overall rainfall during the first month of the monsoon is seen as remaining above average.

Last week, the weather office retained its forecast for an average monsoon for this year, riding on a timely start to the season on June 1.

‘Agri sector can boost economic prospects’ (BL 19/6/2013)

There had been enormous scope for the growth in agriculture sector in our country and if the potential was properly used, we could boost the economic growth of the country substantially in the coming years, said G. Chandrashekar of The Hindu Business Line.

Speaking at the seminar on agribusiness and commodities price risk management organised jointly byThe Hindu Business Line, Forward Market Commission, National Commodities Derivatives Exchange (NCDEX), Federation of Chamber of Commerce, Bangalore, and Davangere District Chamber of Commerce and Industry here recently, Chandrashekar said that though India was the highest producer of milk, and second highest producer of wheat, rice, sugar, cotton and vegetables in the world, the Indian policy makers have failed to make use this achievements to link it with the economic growth of the country.

“Though we are the highest producer of milk and second highest producer of wheat, rice sugar, cotton and vegetables in the world, per capita availability is very low,” he said.

POPULATION EXPLOSION

Expressing concern over not attaining the expected economic development owing to population explosion and decrease in export of commodities, he said that the country has at present 120 crore population and another two crore population would be added in another two years. He said, “We are adding one Australia in our country every year with regard to population.”

Chandrashekar said that there had been considerable increase in quantity of imports than exports and substantial reduction in investment were some of the factors resulted for Country not achieving expected economic growth. He said that countries like China, America which have limited population and which have exporting huge commodities, have achieved economical stability.

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China has 3 dill ion dollars of foreign exchange which is more than eight times of India, he said adding that we have a vast natural resources and man power apart from intellectual power and we should make use of all these to stay ahead of other countries.

YOUNG POPULATION

More than 53 per cent of our population is below 25 years and one third of our population is below 15 years, he said, adding that it was high time we have to make use of our youth force to achieve all round development of the country. Demand for Housing would continue to be there for atleast next 30 years, he said adding that at present we have five crore dwelling units short in our country.

He said that Indian market gradually integrating with global market and hence stake holders must have a global view of market. Because of price volatile, risk perception is heightened. Price discovery of commodity, price risk management, price risk or insurance against adverse price movement and locks in profit margin were some of the crucial aspects one need to have wide knowledge in the present global market, he said.

BANK AID

Deputy General Manager Canara Bank B. Jayarama Reddy in his address said that Canara Bank is giving preference to farmers in distribution of farm loans and crop loans. He said that the bank would provide financial assistance to farmers in installing pump sets, minor irrigation and lift irrigation apart from taking up dairying, piggery, sheep-goat rearing, duck rearing, bee keeping, to set up biogas plant, tissue culture, sericulture, and for farm mechanisation and commercial horticulture cultivation.

He appealed to farmers to make use of the loan facility and attain economic stability for themselves and to the country indirectly.

T. Bhanu, senior journalist, addressed the gathering.

Kasal S Vittal, president of the Chamber, inaugurated the seminar. Shambulingappa, secretary of the chamber of commerce, also spoke on the occasion.

After the function, Chandrashekar answered a volley of questions from the audience during the interactive session. (This article was published on June 19, 2013)

Monsoon not enough yet for drought-hit districts of Maharashtra (ET 19/6/2013)

The drought-hit districts ofMaharashtra have started receiving some rainfall but not enough, just yet, according to the state government. "Mumbai, Konkan region and western parts of Maharashtra have received rainfall much above average. However the drought hit areas are not getting enough monsoon rains and so the state government has decided to continue with relief measures in the area", Maharashtra'srelief and rehabilitation minister Patangrao Kadam has said.

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"Monsoon arrived ahead of schedule in most parts of western India and Mumbai city has received 775 mm of rainfall since June 1, which is 553mm or about 71% over average till mid-June. Pune region has also received decent rains of about 140 mm till now, which has resulted in an increase of about 2.5 TMC water in the dams that supply water to the city, but Aurangabad, Nanded and Jalna districts, which are part of Marathwada region, have not received enough rain. The average rainfall in these areas has been about 100mm to 120 mm. Though there has been some increase in the water level in dams, there has not been enough rain for agriculture in this region", said Kadam

Though the average rainfall in Marathwada region since the beginning of monsoon is better than earlier years, sources said the level in dams has gone down to such an extent that now much more rainfall is needed to bring relief to the farmers in the region.Maharashtra's 16 districts suffered drought conditions for two seasons consecutively in 2011 and 2012.

Monsoon relents over North, heavy rain belt moving East (BL 20/6/2013)

Monsoon is now entering a lull phase with heavy rains getting confined to East India and along the West Coast.

Fresh rains may strike flood-ravaged Uttarakhand and Himachal Pradesh early next week, an India Met Department outlook said.

RAINS FOR EAST

A warning valid for next two days said that heavy rain may lash West Bengal, Sikkim, Assam, Meghalaya, coastal Karnataka, Kerala and Lakshadweep.

Rain may lash many places over East India and spread to adjoining central India from during the same period, it added.

Predictions by US agencies suggested that two waves of rain emerging from Bay of Bengal would head north into the foothills of Himalayas and spare plains of North-West India during next two weeks.

After Uttarakhand, eastern foothills of Uttar Pradesh and Bihar could likely turn soft targets for heavy to very heavy precipitation.

The week beginning Thursday would see rains continue to batter parts of West Coast. Heavy rains are also forecast for Chhattisgarh and adjoining east Madhya Pradesh.

INTERIOR PENINSULA

Some rains are forecast for rest of central India. West Maharashtra (except coast), Telengana, Rayalaseema, coastal Andhra Pradesh; Karnataka (except coast) and Tamil Nadu may be left out.

West Coast may get some respite during the following week from June 27 to July 3. Himalayan foothills in east Uttar Pradesh and Bihar along with Nepal uphill are likely to

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get battered. Sub-Himalayan West Bengal and adjoining Gangetic West Bengal could witness heavy rain.

North-East India would have to make do with indifferent rain. Uttarakhand and adjoining plains around Delhi too may get a coupe of heavy spells.

DRY CONDITIONS

The Climate Prediction Centre of the US National Weather Services said that dry conditions are likely to expand over India during the week from June 26 to July 2.

It reiterated that the monsoon would begin to weaken from now and remain so until the first week of July up to which forecasts were available.

There is an increased risk of tropical cyclone formation in the North-West Pacific, which has implications for Indian monsoon.

Cyclones moving away in a north-northeast direction here (towards Chinese coast, Taiwan or Korea) may hasten monsoon flows over the Peninsula but rob monsoon of its share of moisture.

Climate change could impact food output: World Bank report (ET 20.6.13)

Projections on the impact of higher temperatures on account of climate change on agricultural produce vary depending on the temperature rise and location.

The government's attempts to push through the Food Security Bill may earn it political brownie points, but failure to counter and stem climate change is likely to blunt the impact of the legislation.

Existing projections on the impact of higher temperature on agricultural production vary. However, there is empirical evidence that higher temperatures, and the resulting higher levels of carbon dioxide in the atmosphere are expected to lower protein levels of crops such as wheat and rice.

A World Bank report stresses that the impact of climate change on food production could be severe, especially given that the benefits of carbon dioxide fertilisation, which is an increase in rate of plant growth due to increasing carbon dioxide concentration in the atmosphere, are still uncertain. The lower nutritional value of foodgrain would have "strong repercussions on food security and are likely to negatively influence economic growth and poverty reduction in the impacted regions", the report, titled "Turn Down the Heat: Climate Extremes, Regional Impacts and the Case for Resilience", has said.

While agricultural productivity of some regions of the country may improve with higher temperature, studies show that the nutritional value of crops decreases, bringing down the nutritional value of the foodgrain being offered to the households under the proposed law.

Projections on the impact of higher temperatures on account of climate change on agricultural produce vary depending on the temperature rise and location. Some areas,

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particularly arid regions, could experience improved production on account of higher carbon dioxide levels in the atmosphere. However, even as the quantity of the production increases, the nutritional value decreases.

According to studies, while higher temperatures would affect water availability, chances of droughts and flooding, and other elements that affect food production, these cannot be countered by the benefits of increased carbon dioxide, which are still uncertain.

The World Bank report has drawn on extensive studies linking the impact of climate change on nutritional value of the food production, particularly grains. Studies by D Taub, B Miller and H Allen reveal that while the grain mass increases on account of higher atmospheric carbon dioxide (as a result of global warming), the protein concentration of the grains decreases, particularly in wheat, barley, rice and potatoes.

Rice and wheat are key components of the foodgrain on offer under the food security legislation. More recent studies by Pleijel and Uddling on the impact on wheat production confirm this finding. The study found that increased carbon dioxide levels in the atmosphere result in decreasing the nutritional value of wheat harvests.

The report finds that crop production systems will be under increasing pressure to meet growing global demand in the future. Already the 0.8°C warming has shown to have significant impact on crop yield.

After two droughts, smile is back on AP farmers’ faces (BL 23/6/2013)

After two years of irregular and insufficient rains, farmers in Andhra Pradesh have started off the kharif season with a smile.

Into the third week of monsoon, the State received 23 per cent more rain this year as against deficits in the last two years.

All but four districts registered either average or excel rainfall. Visakhapatnam, East Godavari, Nellore and Kurnool showed a deficit of up to 59 per cent in rainfall.

Storage levels in major dams barring Nagarjunasagar, however, remain a worry.

The Agriculture Department expects higher acreage in oilseed crops as rains arrived on time.

Initial reports suggest good gains by cotton, maize, red gram and soya.

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ACREAGE

“We expect a slight drop in cotton acreage this year when compared to last year’s 22 lakh hectares. It might settle at the season average of 18 lakh ha,” an official of Agriculture Ministry told Business Line.

Cotton sowings covered an extent of four lakh ha as on June 19, as against three lakh ha same day last year. The season average for that day is two lakh ha.

“We are projecting a demand for 1.31 crore packets of cottonseed this year. We have positioned enough stocks to meet the demand,” Agriculture Minister Kanna Lakshminarayana said. But farmers’ associations expect shortage of seeds of a few varieties that are in great demand. “The government has long stopped development and procurement of seeds.

“It has completely left the business to private companies,” Rama Rao, a leader of Andhra Pradesh Rythu Sangham, told Business Line.

Groundnut, which suffered heavily last year, showed signs of come back this kharif by meeting the as-on-date target of one lakh hectares, meeting the season average.The State grows groundnut in 12 lakh ha.Soya made good gains by witnessing sowings in 34,000 ha as against a naught last year.

Kharif sowing: Maharashtra makes steady progress (BL 24/5/2013)

With the monsoon arriving on time in Maharashtra, sowing has been completed in about 20 per cent of the total cultivable area of 144 lakh hectares. Even the drought-prone Vidarbha region has received good rains and cotton is being planted on vast tracks ofland, said a senior officer of the State Government.State Agriculture Commissioner Umakant Dangat told Business Line that due to “good rains” in Vidarbha, cotton tops the list of crops sown in the State. The Konkan region has also received good rainfall, but planting of rice has not commenced in the region, he said.

On the other hand, Dangat said, districts such as Beed and Latur in the Marathwada region and parts of Satara district in western Maharashtra are yet to receive rainfall, which has delayed the sowing.

ADEQUATE RAIN

Since the beginning of the monsoon, the State has received 228 mm of rainfall, while the average rainfall in June is 128 mm. If the bounty continues, then the State could comfortably overcome the drought-like situation prevalent earlier.

This kharif season, crops are expected to be planted over 135 lh. This includes sugarcane, which overall would cover about 144 lh across Maharashtra. In the Konkan region – the rice bowl of Maharashtra – nurseries are spread over 30,000 hectares.

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Rice crop requires replanting and farmers are in the process of making nurseries with rice shoots in the Konkan area, said Dangat.

Agriculture expert Raosaheb Pujari said that in the agriculturally progressive Kolhapur, which remained unaffected by the drought, different crops have been planted in almost 80 per cent of the cultivable area. In talukas, which are near Ratnagiri and Sindhudurg districts of the Konkan region, the planting is almost 100 per cent, he said.

Pujari said that farmers have already planted soyabean, which is expected to be harvested by early September. After that, sugarcane would be planted, which would be ready for the 2014 cane crushing season.

He pointed out that last year, Sangli district was under drought, but this year it has received adequate rainfall. However, the farmers are still in a ‘drought mindset’ and have not started sowing earnestly. The demand for seeds and fertilisers has still not surged, he pointed out.

Tardy progess in building foodgrains storage in 6 states (ET 24/6/2013)

The performance of six states including Haryana, Uttar Pradesh, Bihar andWest Bengal has been unsatisfactory in construction of godowns for foodgrains storage through private participation theFood Ministry has informed the PMO.

In its status note to the Prime Minister's Office (PMO) on the FCI's Private Entrepreneurs Guarantee (PEG) Scheme for construction of godowns, the ministry said: "Progress of PEG is not satisfactory in Bihar, West Bengal, Uttar Pradesh, Haryana, Himachal Pradesh and Jammu and Kashmir."

Faced with storage shortage, the Centre had launched the PEG scheme targeting to create 20 million tonnes of covered and modern storage capacity via private investors in different states. Of these, 7 million tonne capacity has been created.

The PEG scheme was subsequently extended to state agencies who have the requisite land.

Under the scheme, FCI gives a guarantee of ten years for assured hiring of godowns for storage of foodgrains.

In the note, the ministry said the slow progress in construction of godowns in six states, where about eight million tonnes of storage capacity is to be created, was due to various factors including delay in conversion of land usage and finalising tenders.

For instance in Haryana, where 3.65 million tonnes storage capacity is to be built, getting approval on proposals for land use conversion (LUC) has taken time and consequently construction work has not commenced. Other states are still in the process of issuing tenders and shortlisting bidders for the purpose.

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The Ministry informed the PMO that it will closely monitor the "problem states" this year. "Emphasis would be on completing the construction of on-going works and ensuring that tenders are finalised and work commenced for the balance."

The ministry has kept a target to achieve completion of construction of 6 million tonnes of storage capacity in the current fiscal.

State-run FCI is handling about 77 million tonnes of foodgrains as of now, as against the storage capacity of 74 million tonnes, which also includes cover and plinth (CAP) space.

Subsidised foreign study tours for Maharashtra farmers to raise yield (ET 25/6./2013

To educate farmers on best agricultural practices, the Maharashtra government is organising a ten-day study tour to Europe.To educate farmers on best agricultural practices that will help them increase yield, the Maharashtra government is organising a ten-day study tour to Europe for 300 farmers this financial year.

"We started this initiative last financial year in which about 540 farmers have participated. This year we are planning to send up to 300 farmers under this programme taking the total to 791. The farmers, who are sent in batch of 45 each, are accompanied by two senior officers from Agriculture Departmentand University, who will help guide them in local language," Maharashtra Agriculture MinisterRadhakrishna Vikhe Patil said.

Under this initiative, 50 per cent of the tour cost is funded by the state government and the rest by the farmer, he said.

"This initiative is becoming popular as we are receiving more and more applications. We have about 1,700-1,800 applications pending with us. However, we give more preference towomen and award winning farmers," he said.

The tour are organised for Israel for micro-irrigation and green house, plasticulture technology, to Europe for dairy, processing, market study and flora, Holland for world best flower auction centre, bee-keeping and agri mechanisation and handling of agri produce, toVietnam and Malasiya for paddy and tropical fruit cultivation and agriculture operations, food processing.

The government also plans to send farmers to South America, South Africa, South East Asia, Australia and New Zealand.A budgetary allocation of Rs 10 crore for each fiscal year is earmarked, which would be raised depending on the need and response.The selection process for this trip is done by a committee, which ensures that the applications are from farmers, he said.

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XIII AGRICULTURAL /FOOD PRICES

Food prices to remain high: RBI (FE 6.6.13)

Food prices will remain high even as average inflation is expected to moderate to around 5.5 per cent this fiscal, a senior official of RBI said today.

"We see food prices continue to remain high, partly because income levels have gone up. Increasing real informal wages has been a major drive of inflation," RBI Executive Director Deepak Mohanty said here.

"We have higher inflation. We are also a developing nation and so it's good to have some amount of inflation," Mohanty said.

He was in the city to deliver a lecture on monetary policy at a programme organised by Gauhati University.

Many countries, including Japan, are having deflation and they are trying to go back to an era of inflation.

Talking about RBI's projections, Mohanty said, "We expect inflation will moderate to around 5.5 per cent this fiscal and growth will be 5.7 per cent, which will be much lower than the potential rate of 7 per cent."

Inflation is projected to come down to around three per cent in the medium term, he said adding demand pressure from fiscal deficit are significant and a major concern.

"Post crisis fiscal stability is an issue because if it is in the doldrums we can't achieve growth. We have taken financial stability as our objective," he added.

RBI Adviser (Monetary Policy Department) B K Bhoi said global prices of crude, food and metals are still at elevated levels and have an impact on Indian economy.

Slow farm growth could raise world food prices, FAO warns (BL 06/6/2013)

Slow growth of agricultural production and strong demand for biofuels could push up global food prices over the next decade, the United Nations Food and Agriculture Organization warned on Thursday.

Agricultural production is expected to expand by an annual average of 1.5 per cent to 2022, down from 2.1 per cent in the previous decade, the FAO said in a joint report with the Organization for Economic Cooperation and Development.

“High food prices are an incentive to increase production and we need to do our best to ensure that poor farmers benefit from them,” FAO Director-General Jose Graziano da Silva said.

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A lack of new agricultural land, rising costs and increasing environmental pressures are the main factors curbing growth, the report said.

But the FAO said it expected supplies of agricultural commodities to keep pace with global demand despite the limits on production growth.

Prices were forecast to remain “above historical averages over the medium term” for both crop and livestock products because of slower production growth and stronger demand for food and biofuels, it said.

Production shortfalls, price volatility and trade disruption “remain a threat to global food security,” the report said.

“As long as food stocks in major producing and consuming countries remain low, the risk of price volatility is amplified,” it warned.

“A widespread drought such as the one experienced in 2012, on top of low food stocks, could raise world prices by 15 per cent to 40 per cent,” it said. (This article was published on June 6, 2013)

Prices of urad dal, moong dal and sugar move up (ET 10/6/2013)

The prices of urad dal, moong dal and sugar went up rest all other commodities remained

unchanged in the wholesale foodgrains market here today.

Both urad dal and moong dal rose by Rs 100 per quintal to Rs 5,800 and Rs 7,600 from

their previous rates of Rs 5,700 and Rs 7,500 respectively.

Sugar edged up by Rs 30 per quintal to Rs 3,180 from its previous rate of Rs 3,150.

Thoor dal, gram dal, wheat, maida and sooji (90 kg) ruled steady.

The following are the wholesale rates of various agri- commodities today (in rupees per

quintal, except where stated otherwise): Thoor Dal Rs 7, 200, Urad Dal Rs 5,800, Moong

Dal Rs 7,600, Gram Dal Rs 4,200, Sugar Rs 3,180, Wheat Rs 2,300, Maida (90 kg) Rs

2,200 and Sooji (90 kg) Rs 2,300.

Onset of early monsoon set to provide comfort to RBI (BS 12.6.13)

Forecast of normal monsoon this season expected to bring down CPI

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The onset of early monsoon is set to provide comfort to the Reserve Bank of India (RBI) in further monetary easing. It is forecasted that 2013 will witness normal monsoon and according to economists this will help to bring down prices of agricultural commodities which are key components in Consumer Price Index (CPI) inflation.

“The initial signals of monsoon seems to be very encouraging in terms of timeliness and the progress. Assuming that similar trends continue going forward, it is positive for agriculture output and we are seeing over the next few months CPI easing which will be led by easing food prices,” said Shubhada Rao, chief economist, YES Bank. The central bank will announce its its mid quarter review of monetary policy on 17 June.

CPI inflation slowed to 9.39% in April compared with 10.39% in March. CPI inflation for May will be released this week.

However, many economists believe that RBI may maintain status quo on key policy rates in the mid-quarter review. Further rate cuts may get deferred to July as by then the central bank will have complete comfort on the progress of monsoon. RBI has reduced the repo rate by 25 bps in 2013 by 75 bps. At present, the repo rate is at 7.25%.

“For RBI, this year's monsoons again will be be a crucial variable in calibrating monetary policy, as they will have implications for both inflation and growth. Although the central bank's guidance remains cautious, we believe the flow of macroeconomic data – continued downside surprises in inflation, a more benign current account and weak growth indicators – has created room for larger monetary easing in the coming months,” said Rahul Bajoria and Siddhartha Sanyal of Barclays Capital.

According to Bajoria and Sanyal a normal monsoon would likely lead to a softer increase in minimum support prices of various agro-commodities in fiscal year 2013-14, which is their baseline expectation. “In sum, in case of favourable monsoon rainfall, the CPI inflation could move lower, to an average of 7-8% in fiscal 2013-14, which would be a five-year low,” said Bajoria and Sanyal.

Meanwhile, government bond yields are expected to fall further from current levels due to softening inflation data. The yield on the 10-year benchmark government bond 7.16% 2023 ended at 7.30% on Tuesday compared with previous close of 7.28%. “Since inflation will be softer, the yields may fall further. But the fall will not be drastic because of foreign institutional investors withdrawing from domestic debt,” said Ajay Manglunia, senior vice-president, Edelweiss Securities.

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Elevated food prices putting pressure on inflation in India, says RBI (FE 18.6.13)

Expressing concerns over price situation, the RBI today said expensive food items like cereals and vegetables has continued to put pressure on overall inflation rate.

"Still elevated food inflation, particularly in respect of cereals and vegetables, sustained upside pressures on overall inflation," RBI Governor D Subbarao said in mid-quarter review of the monetary policy.

Given that food inflation remains high, the inflation outlook will be influenced by concerted efforts to break food inflation persistence, he said.

Pinning hopes on rain God's intervention to cool price situation, the RBI chief said "last year's robust rabi production and the monsoon performance so far augur well for growth prospects."

He noted that the onset of the south-west monsoon has been strong and on time.

The inflation outlook going forward will be determined by suppressed inflation being released through revisions in administered prices, including the minimum support prices (MSP) as well as the recent depreciation of the rupee, he added.

The policy review noted that retail inflation, as measured by the new combined (rural and urban) CPI, edged down from an average of 10.2 per cent last fiscal year to 9.3 per cent in May.

Headline wholesale price index (WPI) inflation eased for three months in succession with the May reading at 4.7 per cent, down from an average of 7.4 percent in 2012-13, it said.

Retail inflation for agri, rural labourers rises in May (BL 20/6/2013)

Retail inflation based on Consumer Price Index (CPI) for agricultural labourers rose to 12.7 per cent in May from 12.32 per cent in April, due to rise in the prices of food items and fuel, an official release said.

Similarly, for rural labourers, it increased to 12.5 per cent in May from 12.15 per cent in April.

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“Point to point rate of inflation based on the CPI-AL and CPI-RL increased from 12.32 per cent and 12.15 per cent in April to 12.70 per cent and 12.50 per cent in May this year,” the release said.

The Inflation based on food index of Consumer Price Index-Agriculture Labour (CPI-AL) and Consumer Price Index-Rural Labour (CPI-RL) are 13.37 per cent and 13.14 per cent, respectively in May, it said.

According to the statement, West Bengal registered the maximum increase of 19 and 20 points, respectively for farm and rural workers, mainly due to increase in the prices of rice, wheat, meat goat, fish fresh, ginger, vegetables and fruits, gur, bidi, firewood, shirting cloth cotton (mill) and plastic shoes.

On the other hand, Bihar registered a decline of 11 points and 10 points, respectively for CPI-AL and CPI-RL due to decrease in the prices of rice, wheat/wheat atta, maize, onion and vegetable and fruits.

The consumer price index for farm and rural workers in May increased by 8 points and 9 points, respectively to stand at 719 points (CPI-AL) and 720 points (CPI-RL).

The rise or fall in index varied from state to state.

The index for farm workers recorded an increase which varied between 3 to 19 points in 19 states and a decrease of 11 points in one state.

Karnataka with 792 points topped the index table whereas Himachal Pradesh with an index level of 560 points stood at the bottom.

On the other hand, the retail inflation index for farm workers recorded an increase between 2 to 20 points in 19 states and a decrease of 10 points in one state.

Karnataka with 789 points topped the index table whereas Himachal Pradesh and Tripura with the index level of 592 points each stood at the bottom. (This article was published on June 20, 2013)

India helping in controlling global food prices: Sharad Pawar, Agriculture Minister (ET 25.6.13)India has emerged as a strong player in helping cool down global food prices by exporting major farm commodities like rice and wheat, Agriculture Minister Sharad Pawar said today.

"While feeding 17 per cent of world's population we have emerged as strong player in international market helping to cool down the world food prices," Pawar said at the 16th Indian Cooperative Congress organised by NCUI here.

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Last year, the country exported agriculture produce worth Rs 1.87 lakh crore, while this year till February itself exports have already crossed Rs 2.1 lakh crore, he said.

The minister said that the country has harvested record foodgrains year after year. Agriculture is the only sector in the country which has almost achieved its 11 Plan target of 4 per cent growth rate.

The sector has performed well also because of the presence of large number of primary cooperatives handling supply of agriculture inputs, credit, and marketing and storage activities, he added.

The minister said that the cooperatives are more relevant in the the present era than any other time because it is the most potent tool for inclusive growth.

"It creates job opportunities, sustainable livelihood for millions of people in the farm sector and also has the capacity to reverse the rural to urban migration," he said.

Both short-term and long-term cooperative credit sector and urban cooperative banking sector has the capability to promote financial inclusion, which is necessary for inclusive growth in the rural and semi-rural areas, he said.

According to official data, foodgrains production in 2011-12 was record at 259.32 million tonnes. It is expected to be high at 255.36 million tonnes this year.

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XIV AGRICULTURAL COMMODITY FUTURES

Govt policies are growth inhibitors of commodity futures

It is over a decade since the Government allowed futures trading in commodities. In the years that have gone-by, commodity trading has grown by leaps and bounds, though there was a drop in the value of trade last fiscal.

In 2012-13, the value of futures trading dropped to Rs 170 lakh crore from Rs 181 lakh crore the previous year.

This could be attributed to the ban on guar futures that had single-handedly lifted the turnover by 50 per cent during 2011-12. Besides, a drop in farm products prices and costlier gold too contributed to this trend.

In April this year, futures trading have showed signs of bouncing back with the value rising to Rs 14.77 lakh crore against Rs 11.52 lakh crore the same period a year ago. Bullion and farm products’ futures, too, are showing a rising trend.

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JOURNEY OF FUTURES

Commodities futures trading in the country dates back to 1875 and had a glorious run between the First and Second World Wars before being banned. Again after Independence, it spread its wings before the Government banned as it felt too much of speculation was leading to higher prices.

Socialism and a closed economy also helped the Government’s cause before it began reviewing its situation in 1980. However, a total change of attitude set in after the Government ushered in liberalisation in 1991.

As part of the economic reforms, the Government appointed a committee headed by Prof K.N. Kabra to look into futures trading. The committee gave its recommendations in September 1993. The irony of the committee’s recommendation was that Kabra dissented with the majority’s view to allow futures trading. He was, in particular, against allowing futures in essential commodities. But the majority’s view to allow futures trading in a host of commodities prevailed.

In April 1999, the Government allowed futures trading in oils and oilseeds with the Soyabean Processors’ Association of India getting permission. It was permitted to launch futures in soyabean and its products.

In 2002-03 Budget, the Centre said it was firm in its resolve to put in place a proper mechanism for futures trade in farm and agricultural products. Thus, a notification was issued on April 1, 2003 wherein various commodities could be trade in one exchange.

This led to the birth of exchanges such as the National Commodities and Derivatives Exchange, Multi Commodity Exchange and National Multi Commodity Exchange. In the last couple of years, ACE Derivatives and Commodities Exchange and Indian Commodity Exchange have also come into existence.

Commodity futures trading turnover is 70 per cent of the turnover witnessed in equities. It can, in fact, outperform equities but for lack of initiatives from the Government.

One of the factors inhibiting growth in futures trading is the delay in getting Parliament’s nod to amendments to the Forward Contracts (Regulation) Act, 1952. The amendment Bill has been pending for almost a decade now. The change in the Act will help usher in options trading in commodities. This will ensure participation of growers in futures trading.

KEY ISSUE

The other major problem affecting futures trading is Government ad hoc policies of banning futures. In 2007, when prices of wheat, rice and pulses soared, it banned futures trading in these commodities. Subsequently, it allowed futures in wheat but the ban remains on rice and pulses. Similarly, it resorted to a ban on sugar futures too when

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prices surged before lifting it a few months later. Rubber, soyabean and potato have also gone through such process.

The Government’s decision to impose commodities transaction tax on non-agricultural commodities is also seen as a dampener. Still, increasing population and demand are seen as indicators of bright prospects for commodity futures.

Commodities Transaction Tax likely from July 1 (BL 19/6/2013)

The Commodities Transaction Tax on non-agricultural commodities futures contracts is likely to be effective from July 1.

The legal decks have been cleared for the Government to impose this levy at 0.01 per cent of the price from this date, sources close to the developments said. The current securities transaction tax rate on equity futures is also pegged at 0.01 per cent.

The process of notification of CTT is in the final lap and the legislative department concerned has given its nod for this levy. Futures contracts on all agricultural produce except processed agricultural items will be exempt from CTT, it is learnt. The CTT levy is going to be applicable on the sell side of the transaction and payable by the seller.

In his Budget speech, Finance Minister P. Chidambaram had said it was time to introduce CTT in a limited way.

He pointed out that there was no distinction between derivative trading in the securities market and derivatives trading in the commodities market – only the underlying asset is different. Chidambaram had also then said that trading in commodity derivatives will not be considered as “speculative transaction” for income-tax purposes.

He had said that the CTT will be allowed as a deduction if the income from such transaction formed part of the business income.