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AgriNews: October 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”
Prepared by
National Council of Applied Economic Research
11, I.P. Estate
New Delhi 110002
(Coverage from September 26, 2013 to October 25, 2013)
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CONTENTS
Section Title Page No.
1 Highlights 1
2 Broad Sectoral Trends 5
3 Agricultural Policy 7
4 Rice 17
5 Wheat 27
6 Maize /Coarse cereals 33
7 Pulses 37
8 Edible Oils / Oilseeds 41
9 Milk 51
10 Vegetables – Potato/ Onoins 57
11 Sugarcane / Sugar 75
12 Inputs 91
13 Other Agri / Farm News 95
14 Agricultural / Food Prices 107
15 Agricultural Futures Prices 119
Note: Newspapers covered: BL= Business Line, BS = Business Standard, ET= Economic
Times, FE= Financial Express
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1
HIGHLIGHTS
Broad Sectoral Trends
Farm sector set to grow over 5%. If the prediction turns out right, it could help tame
food inflation , provide a much-needed boost to rural incomes and a knock-on effect
on other sectors of the economy. (ET: 12.10.13)
India's FY14 GDP growth to be 4.9%: Report. According to India Ratings, the
country's agricultural growth came to the rescue as without it, growth rate for this
financial year would have been much lower. (BS 23.10.13)
Agri Policy Issues
India's WTO food security stance garners support from French think-tank. The
question of public stock-holding for food security will be at the center of the next
WTO negotiations in Bali. (BS 29.9.13)
India's food law to protect poor from price volatility: Thomas. "The NFSA gives
'Right to Food' to 67% of the population, thereby protecting them against price
volatility." (ET 7.10.13)
No WTO promise on food security. Trade body chief says developing nations have
legitimate concerns on issue but notes need for consensus. (BS 8.10.13)
India to push for longer validity of WTO food subsidy waiver. India’s consent to
the temporary waiver being negotiated at the World Trade Organisation (WTO) to
allow developing countries to go beyond their permitted food subsidy limits will
depend on its duration and the food items covered by it. (BL 15.10.13)
Long-term market strategies must to ease prices: CACP. Onion prices have risen
fourfold in the past six months (BS: 25.10.13)
Rice
Govt's rice procurement drops to 34.1 mn tonnes in 2012-13. Government's rice
procurement declined marginally by 3 per cent to 34.1 million tonnes in the 2012-13
marketing year that ended last month due to sluggish purchases from Andhra Pradesh
and Tamil Nadu. (ET: 03.10.13)
India pips Thailand as Singapore’s leading rice supplier. India has overtaken
Thailand as Singapore’s biggest rice supplier for the first time, exporting 92,865
tonnes or 32.9 per cent of the total rice supply to the island nation in the first eight
months of 2013. (BL: 12.10.13)
Farmers in Punjab selling paddy much below MSP. High moisture content and
discoloration of grains due to untimely rains is acting as a deterrent. As a result,
farmers are forced to sell their produce at much below the minimum selling price
(MSP) of Rs 1,345 per quintal. (BS: 21.10.13)
India's rice exports may fall to 9.3 million tons in 2013-14: USDA. Rice exports
from India, the world's largest producer and exporter, are estimated to fall marginally
to 9.3 million tonnes in 2013-14. (ET: 21.10.13)
Wheat
India may set record wheat output this year on good rain: Government. The
government today said the country's wheat production this year may surpass the
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previous record of 94.88 million tonnes after good rains took water reservoir levels to
a 10-year high. (ET 26.09.13)
Govt limits wheat MSP hike to Rs 50/quintal on inflation worry. Concerned about
inflation, the government today hiked the minimum support price (MSP) of wheat by
Rs 50 a quintal for the marketing year starting April 2014, rejecting a proposal for a
higher increase. (ET 18.10.13)
Cabinet soon to consider cutting wheat export floor price. The cabinet will soon
consider cutting the floor price for wheat exports by 13 percent, potentially boosting
supplies from the world's second-biggest producer and easing benchmark prices in
Chicago. (ET: 24.10.13)
Maize/ Coarse Cereals
Maize production may touch record 25 mn tonnes this year. Maize production in
India this year is likely to touch record 25 million tonnes as adequate monsoon rains
trigger higher acreage across growing states. (ET: 07.10.13) Cereal exports to be under pressure. Initial surge might not sustain due to global
oversupply and falling prices, says trade. (BS: 14.10.13)
Pulses
Kharif pulses crop may have been underestimated. Confusion marks the first
advance estimate of kharif 2013-14 pulses production. (BL 4.10.13)
Rally in pulses may continue on fears of crop damage. Strong buying support and
weak arrivals have lifted tur prices in Indore mandis in the past one week by almost
Rs 150 a quintal. (BL: 23.10.13)
Edible Oils / Oilseeds
Crop damage to cap soybean output growth this year. Excessive rainfall in a
couple of major soybean-growing areas damaged the crop. (BS 1.10.13)
CCEA approves National Mission on Oilseeds and Oil Palm during the 12th Plan
period. The Cabinet Committee on Economic Affairs (CCEA) has approved the
implementation of the National Mission on Oilseeds and Oil Palm (NMOOP) during
the 12th Plan Period with financial allocation of Rs.3507 crore. (ET: 04.10.13)
Groundnut production to quadruple in Gujarat: SOMA. The association
estimates about 2.40 mn tonnes groundnut production this year as against 600,000
tonnes in previous year (BS 7.10.13)
Oilmeal exports up 104% in September. In the month, India exported 294,830
tonnes of oilmeal compared to 144,787 tonnes in year ago period (BS 7.10.13)
Mustard crop to be mapped through satellites. Currently, a satellite-based crop
estimation technique is used extensively for sugarcane by ISMA (BS 18.10.13)
Oilseed acreage and production up in Kharif 2013. As per the Ministry of
Agriculturethe acreage under oilseeds as on 17th October, 2013 estimated at 194.94
lakh hectares against 177.66 lakh hectares last year, up by 17.28 lakh hectares. (ET:
21.10.13)
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Milk
Milk prices on the boil as fuel, feed costs increase. Milk prices across the country
are set to rise ahead of the festival season, posing further problems to customers
already reeling under surging prices of tomatoes and onions. (BL: 14.10.13)
India likely to produce record 140.6 mn tonnes milk in 2014: Report. Milk output
is likely to expand by 4.5 per cent to reach a record 140.6 million tonnes in 2014
calendar year on a normal monsoon, increased demand for dairy products and rising
consumer income, says a USDA report. (ET: 22.10.13)
Vegetables – Potato / Onions
Higher output of Kharif crops to end onion prices from December. Onion prices,
which have set new records this year, may come crashing from December onward.
Kharif and late kharif crops are expected to yield a big harvest with farmers
increasing the acreage by about 15-20 per cent. (ET: 26.09.13)
Prolonged monsoon pushes potato prices up 25%. Prolonged monsoon leading to
delay in sowing of early tuber varieties by 15-20 days, in major potato-growing
States, have come as a boon to farmers in West Bengal. (BL 20.10.13)
Government relaxes norms for onion imports. Amid skyrocketing onion prices, the
government today relaxed norms for import of onion by allowing fumigation of the
kitchen staple in India without imposing any penalty. (ET: 23.10.13)
Panic grips Union government as onion price hits Rs 100 a kg. With onion prices
continuing to be on fire in the run-up to crucial state polls, an embattled government
scrambled to stem the surge but appeared to lack a coherent plan. (ET: 23.10.13)
Sugarcane / Sugar
Haryana to give country's highest ever price of sugarcane. Haryana chief
minister,Bhupinder Singh Hooda on Thursday announced to give country's highest
ever price of sugarcane to the farmers of the state. (ET : 26.09.13)
Brazil factors begin driving up global sugar prices. Sugar prices are tending to rise
in the global market on concerns over a couple of developments in Brazil. This could
help drive exports of sugar exports from the country if the trend continues. (BL:
13.10.13)
High debt, low sugar prices lead to delay in crushing by sugar mills. Bogged
down by huge debt and mounting cane arrears, sugar mills all over the country have
delayed crushing until the government makes cane price linkage clear. (ET 18.10.13)
Sugar output slips 4.5%,but consumption goes up. Domestic sugar consumption
grew 3.6 per cent to 22.8 million tonnes in 2012-13 over previous year, even as
production declined 4.5 per cent to 25.14 mt during the period. (BL: 21.10.13)
Inputs
Seed shortage might spoil bumper crop party this rabi. Agriculture ministry urges
states to form alliance with seed producers to meet future requirements (BS: 17.10.13)
Other Agri / Farm News
Extended rains boost rabi crop prospects. Sharad Pawar forecast India's wheat
output to exceed record of 94.9 mt set in 2011-12 crop year (BS: 9.10.13)
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Centre to build storage for steady flow of food grains under Food Security Act.
The Centre will provide Rs 450 crore while the land for construction will begiven by
the states that are willing to come up with these facilities. (ET: 18.10.13) ‘Climate change affecting major food crops’. Climate change is hitting closer to
home than earlier expected. Agriculture production has seen a significant drop due to
the effects of climate change such as increased temperature, floods and drought. (BL:
18.10.13) 'Rate of success of farm technologies just eight per cent'. The steps taken by the
government to support dissemination of 420 proven farm technologies in 5,000
locations nationwide has seen a success rate of just eight per cent. (ET 21.10.13)
Agri Commodity / Food Prices
World food prices drop to lowest in 3 years. An index of 55 food items tracked by
the FAO fell to 199.1 points from a revised 201.4 in August. (BS: 03.10.13)
India, ASEAN to look at ways to address food price volatility. To address the issue
of volatility in food prices, India and ASEAN countries will share their expertise to
boost their food security planning activities. (ET: 10.10.13)
Higher vegetable prices push retail inflation up to 9.84 pct in Sept. Retail inflation
for rural and urban areas in September stood at 9.71 pct and 9.93 pct, respectively.
(FE: 14.10.13)
Economy moving towards stagflation: CII survey of CEOs. Stagflation is a
situation where economic growth is too low, inflation too high, leading to steady high
unemployment. (BS 15.10.13)
Agricultural Future Prices
Chana down 1.5% on subdued demand, higher output hopes. Chana for
November delivery declined by 1.2%. (BS: 27.09.13)
Soybean up 1.6% on global cues. Marketmen said traders enlarging their positions
influenced by a firming global trend, pushed up soybean prices at futures market. (BS
7.10.13)
Maize down 1.6% on rising inventories. December contract weakened by 1.53%.
(BS: 08.10.13)
Mustardseed up 1.3% on renewed buying. Mustardseed prices rose by Rs 48 to Rs
3,732 per quintal in futures trading today following sustained buying by traders in
tandem with firm physical market sentiments. (BS 11.10.13)
Arrival of imports turns outlook bearish for chana. With arrivals outstripping
demand, chana prices have begun to drop in Indore mandis over the last few days.
(BL: 22.10.13)
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BROAD SECTORAL TRENDS
Farm sector set to grow over 5% (ET: 12.10.13) Agricultural GDP is likely to grow by over 5% this year thanks to the most abundant rain in
nearly two decades, a government think-tank has forecast. If the prediction turns out right, it
could help tame food inflation , provide a much-needed boost to rural incomes and a knock-
on effect on other sectors of the economy.
The demand for two wheelers, tractors and mobiles, in particular, could rise sharply helping
the government in its efforts to steer the economy out of a deep slowdown. For the UPA, that
would also be great news politically in the run-up to the 2014 general elections.
While private economists are still betting on the farm sector growing by around 4.5% this
fiscal year, the Commission for Agricultural Costs & Prices has estimated that the sector will
clock 5.2-5 .7% growth during the 2013-14 agricultural year (July-June ). During the last
financial year, farm sector growth was estimated at 1.9%. In recent years, the fastest growth
rate was in 2010-11 , which propelled overall economic growth to 9.3%.
"Comparing these likely agri-GDP growth rates in 2013-14 (agricultural year) with the last
year (2012-13 ) performance, it turns out that the agri-GDP growth is likely to be about three
times higher than last year," the study conducted by CACP chairman Ashok Gulati, Shweta
Saini and Surbhi Jain said.
India's FY14 GDP growth to be 4.9%: Report (BS 23.10.13)
According to India Ratings, the country's agricultural growth came to the rescue as without
it, growth rate for this financial year would have been much lower
India Ratings & Research (Ind-Ra) expects India's GDP growth to remain sluggish at 4.9% in
the current financial year, due to a mix of domestic and external factors.
According to India Ratings, the country's agricultural growth came to the rescue as without it,
growth rate for this financial year would have been much lower.
Indian economy, which has been witnessing a growth slowdown since FY12, is expected to
grow at 4.9% in the current financial year, well below its potential and last 10 years trend
growth rate of 7.9%, India Ratings said.
"But for higher agricultural growth due to favourable monsoons, the GDP growth during
FY14 would have been even lower," it said and added that it expects the agricultural sector to
grow at 4.5% in this fiscal as against 1.8% in 2012-13.
In the 2013 monsoon season (June 1 to September 30), the country received 6% higher
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rainfall than the long period average.
"This is clearly good news not only for kharif crops but also for rabi crops as water storage in
85 important water reservoirs (as on August 29, 2013) was 35% more than last year," it said.
However, industry remains a drag for the economic growth.
According to India Ratings, industrial growth in FY14 is likely to be 2.2%, lower than 3.1%
recorded in FY13.
Moreover, the services sector which was the bellwether of growth and had recorded double-
digit growth from FY06 to FY10 is also facing "heat".
The services sector has begun dwindling since FY11, it said.
India Ratings expects the sector's growth to slow down to 6.3% y-o-y in FY14 from 6.6% y-
o-y in FY13.
"As the largest sector of the economy, it has been quite resilient in the past. Even during the
year of global financial crisis (FY09), when the overall GDP growth of India fell down to
6.7%, it grew at 10%," it said.
Although the services sector continues to be the fastest growing sector of the economy, it is
also facing heat due to its strong linkage with the agricultural and industrial sectors on the
domestic front and the economies of US and EU on the external front, it added.
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AGRI- POLICY ISSUES
India's WTO food security stance garners support from French think-tank (BS 29.9.13)
The question of public stock-holding for food security will be at the center of the next WTO
negotiations in Bali
In its effort to get an agreement on the G33’s food security deal at the WTO (World Trade
Organization) Bali ministerial, India might find an unlikely support in France, the only nation
in the rich countries' club who is supporting the developing countries’ stance.
In a paper prepared by a French think-tank – CIRAD – it has argued for the need to correct
WTO rules for public stocks. The report stresses on the fact that if the current global norms
under WTO on public stocks remain unchanged then it will lead to unfairness, bad incentives
and price distortion.
The question of public stock-holding for food security will be at the center of the next WTO
negotiations in Bali which is taking place from December 3-6, 2013. India, along with other
emerging and developing countries have stated that it will not agree to a deal on trade
facilitation, which is being pushed by rich countries that seeks to cut transaction cost along
international borders for smoother flows of goods, until and unless they agree to conclude the
discussion on the food security proposal.
This proposal was originally mooted by the G33, a grouping of all emerging nations in 2008
and was included in the December 2008 negotiating text during a ministers’ meet.
The December 2008 text states: “acquisition of stocks of foodstuffs by developing country
members with the objective of supporting low-income or resource-poor producers shall not
be required to be accounted for in the AMS (Aggregate Measurement of Support).”
India along with other developing countries have been demanding since then that some of the
subsidies that are given as part of the procurement which is done for public stockholding
from poor and marginal farmers should not be regarded as a ‘prohibited subsidy’ or ‘amber
box’ subsidy by the WTO. Presently, these are prohibited under WTO norms.
The report highlighted that the current WTO rules on public stocks overestimate the domestic
support for agriculture substantially. “The current way to calculate the contribution of public
stocks to AMS is biased. It strongly overestimates the real support provided to farmers
through public stocks,” the report prepared by Franck Galtier of CIRAD stated.
Thus, the report said that a change of rules is required to derive a new mechanism of
calculation with a more “realistic measure” the developing countries, like that of India,
provides for domestic support.
While the US is completely against such a proposal, the European countries are still ready to
discuss the issue and find out an amicable solution to the problem. This is because the US
feels, any agreement on this issue will give unprecedented flexibilities to China as it gives
much more subsidies compared to India in terms of numbers and their procurement levels are
much higher.
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An agreement on this proposal is extremely crucial for India as 99 per cent of its farmers fall
under the ‘low-income or resource-poor’ category. Moreover, Indian government is also
concerned of the fact that in public procurement it is soon going to overshoot the ‘De
Minimis’ level, the threshold beyond which subsidies cannot be given under global trading
rules.
India's food law to protect poor from price volatility: Thomas (ET 7.10.13)
"The NFSA gives 'Right to Food' to 67% of the population, thereby protecting them against
price volatility," Thomas said.
Food Minister K V Thomas today said the recently enacted food law will protect 67 per cent
of the population from price volatility.
India has taken several measures to curb food price rise and are showing "promising results",
he said, while addressing the FAO session on international food prices.
"The landmark National Food Security Act gives 'Right to Food' to 67 per cent of the
population by ensuring them foodgrains at the most affordable prices, thereby protecting
them against price volatility," Thomas said.
The provisions under the law will result in availability of sufficient food for an active and
healthy life of poor people, he added.
Addressing a separate session on world food security, Thomas said that India's food law
marks a paradigm shift in approach to food security - from being a welfare measure to rights-
based approach.
The act legally entitles up to 75 per cent of the rural population and 50 per cent of the urban
population to receive 5 Kg of foodgrain per head per month at a highly subsidised rate under
PDS, he said.
Having enacted this historic law, it is necessary to ensure its proper implementation and
sustainability, he added.
Noting that several steps taken to check prices of essential food items are yielding results in
the domestic market, the Minister said there was a decline in prices of food in August this
year in India as compared to the corresponding period of previous year.
"The decline was mainly observed in cereals, oils/fats and sugar through there is a hike in the
prices of milk and meat. The rate of inflation for milk and sugar was stable at a lower level
and it was declining for edible oils," he said.
Besides taking measures to contain food price rise in India, the country has taken steps to
meet the foodgrains requirement of many nations and has always been in the forefront to
contribute to the global food aid programmes directly to the needy countries as well as
through World Food Programme.
The country had exported 15 million tonnes of rice and wheat since export curbs were
removed in September 2011.
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Thomas further said that India is supporting the initiatives launched by G-20 forum,
especially the Agricultural Market Information System (AMIS) and the Rapid Response
Forum (RRF), towards addressing volatility in global food prices.
India has already taken necessary measures in this direction by appointing the nodal points
for AMIS and RRF to make these mechanisms fully operative, he said.
"Initiatives like the AMIS and the RRF are timely steps in the right direction and we would
appeal to all nations to participate actively in this mechanism," he said.
The global implications of India's food security law (BS 7.10.13)
Balancing duty to the poor while mitigating 'policy externalities' arising out of the food bill is
India's latest challenge
The government has fought all odds to get the food security bill – an entitlement programme
that covers 67% of India’s 1.2 billion large population under a subsidised grain regime,
passed in the Parliament. But the battle now shifts to the global stage with India having to
convince negotiators, particularly the United States, at the WTO meeting in Bali, that this
new law will not have ‘market distorting’ effects on trade.
Commerce Minister Anand Sharma will meet the new WTO Chief Roberto Azevedo on
October 7, and at the core of their discussions is likely to be India’s demand for the
amendment of the Agreement on Agriculture (AoA). In a nutshell, this agreement restricts
India and other developing nations from exceeding ‘market distorting subsidies’ that it gives
to farmers, beyond 10% of total production. This is also called de minimis support.
According to Martin Khor, executive director of the South Centre (an inter-governmental
organisation of developing countries based in Geneva), India is among the countries that risks
exceeding this 10% threshold, with the ambitious food security programme being rolled out.
“In case of paddy India has already breached the 10% threshold. We are at 24% currently.
India will have to defend its right to subsidise, because the livelihood security of small
farmers is at stake. We allowed the US to boost its subsidies, now it is their turn to let us
fulfill our domestic commitments. Else let us approach the dispute panel of the WTO,”
Devinder Sharma, a food and trade policy expert told Business Standard
It is critical that New Delhi, backed by the G-33, bargains hard at the WTO table to seek
these exemptions to uphold its sovereign duties, adds Sharma. Even if it means a déjà vu of
the Doha round that ended in a colossal failure.
India will spend about $20 bn (Rs 1.2 lakh approximately) annually on food subsidy. That is
a pittance compared to the $400 bn that rich countries spend subsidising their farmers. Khor
in his column in The Star, Malaysia says it is ‘discriminatory’ and ‘hypocritical’ on the part
of developed countries like the US to pressure India into adhering to the AoA.
How India navigates through the WTO round in December remains to be seen, but what is
clear is that the world community is going to increasingly harden scrutiny on the potential
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implications of the food security bill and the global imbalances it might create. Nomura had
warned months ago that the scale of India’s food entitlement programme has the capacity to
send global food grain prices soaring in a year when the monsoon is deficient and India has to
import grains.
Andy Mukherjee, a Reuters Breakingviews columnist, reiterated this concern warning that
India will “start exporting food inflation in the years to come” to poor countries like Nigeria,
Senegal, Bangladesh and Indonesia if India’s imports swell in a drought year.
It is imperative for the Indian government then, to prudently balance its role as one of the
world’s biggest exporters and consumers of food grain, (of rice, sugar and wheat), while
sticking on to its commitment to the poor of this country.
The only sustainable way to reconcile these dichotomous demands is to continually increase
farm productivity, maintain consistently high stockpiles (without letting them rot), which
means increased investment in irrigation, and creating efficient supply chains. India’s food
grain production reduced from 259.29 million tonne in 2011-12 to 250 million tonne in 2012-
13 because of poor rains. Reducing our dependence on monsoons and improving agri-
infrastructure is critical to curbing import distortions during drought years, if we are to avoid
a backlash from the global community.
At the same time, it is also absolutely necessary for India to cut a winning bargain at the
WTO bearing in mind the fact that with the food bill now a reality, procurement from small
farmers will have to be stepped up (to 70 million tonne from 45 million tonne presently),
which means minimum support prices will also go up, making it impossible for India to stick
to AoA norms.
The challenge, then, is very clearly to defend our national obligations while giving due
credence to mitigating the “policy externalities” (the consequences of a policy that extends
outside the policymakers’ domain) that may arise out the passage of the food bill.
No WTO promise on food security (BS 8.10.13)
Trade body chief says developing nations have legitimate concerns on issue but notes need
for consensus
World Trade Organization (WTO) director general Roberto Azevêdo said on Monday that a
discussion on food security concerns, covering public stockholding and domestic food aid
programmes, requires a permanent and long-term solution subscribed to by all the 159
member-countries and was unlikely to be resolved in the coming ministerial meeting.
“We will try to find a solution between now and the ministerial conference in Bali. Until we
reach a solution, it would be premature to say what the nature of that solution is. But we will
try to find an outcome which all sides believe is a balanced outcome, in the interest of all of
them,” he told reporters here after meeting commerce and industry minister Anand Sharma.
The latter said the Government of India was hopeful of a positive outcome at the meet. He
also said the very fact WTO members were ready to discuss the food security proposal was
enough for developing countries to move ahead.
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The proposal on food security and public stockholding was floated by the G-33 coalition of
developing countries in 2008. While developing countries such as India, China and Brazil
had been pushing for the proposal to be taken up, the talks had been deadlocked since.
While assuring that members were now ready to discuss the topic, Azevêdo did not give any
assurance on whether it would be taken up during the Bali ministerial.
“When the proposal was originally floated by the G-33, it was rejected by many. But from
2008 till now, a lot of progress has taken place. Member-countries know that this is a
legitimate issue and countries are willing to discuss. But it is very complex issue. We have to
simplify the discussion and arrive at a permanent long-term solution,” he said in his address.
Discussion would lead to making those food subsidies legal that are now prohibited, and the
US and Europe had been opposed to taking up the matter. Public stockholding is a widely
used means to ensure food security in many developing countries where agriculture is largely
rain-fed. Updating of the rules would greatly help these countries in carrying out such
operations without defaulting on their commitments, Indian officials said.
During his speech to the Confederation of Indian Industry, Azevêdo urged industry leaders to
push the government to agree to a deal on trade facilitation, which the US and the European
Union have been very keen on signing in Bali. The WTO chief said this would lower cost
barriers and help companies to be part of the global value chain.
“This is not a small deal. It is a very big deal if done properly. We must deliver on this by
ambassadors and senior diplomats.
Azevêdo said governments need to show flexibility in continuing the process of having a
rules-based multilateral trading system. “Capitals have to work towards creating a Bali
package; else, it will be regrettable. WTO will lose relevance. The multilateral trading system
will lose relevance,” he said.
India hopes food security issues will be resolved at Bali meet (ET 13.10.13)
India expressed the hope that all issues related to food security and trade facilitation will be
resolved during the forthcoming meet of WTO members at Bali in December.
India today expressed the hope that all issues related to food security and trade facilitation
will be resolved during the forthcoming meet of WTO members at Bali in December.
"It has become imperative to revisit the issue of food security at the WTO and I remain
optimistic that we will have a resolution of all the issues related to multilateral trade,"
Commerce and Industry Minister Anand Sharma told reporters while returning with Prime
Minister Manmohan Singh from Indonesia.
New Director General of the World Trade Organisation (WTO) Roberto Azevedo had
recently said that India's food security law will raise subsidy levels and the issue needs to be
addressed in a positive manner.
"On food security issue, here is a G-33 proposal to allow countries with food security law to
procure goods for ensuring food security for its people. We have shown our willingness to
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find a common ground and take forward the negotiations," Sharma said.
He also said India will agree to negotiate about the trade facilitation pact.
India is keen to win legitimacy for its ambitious food security law that promises highly
subsidised foodgrain to the poor from the WTO and is open to the issue being discussed at
the Bali meeting.
The country is implementing the Food Security Act which entitles 82 crore people to 5 kgs of
foodgrain per person in a month at the rate of Rs 1-3 per kg. The country needs 62 million
tonnes of foodgrain in a year to implement the law.
Countries like the US and Canada have raised concerns over India's food security legislation.
They have asked India to explain the effect the legislation will have on global stocks and
commodity prices.
External Affairs Minister Salman Khursid also said this is absolutely an issue of high
importance to India.
"It is important to make a very clear distinction that these stockpiles are not for trading, not
for finding a market for our agriculture and other goods, but for safety and security of our
people," he said.
He said that India would engage with every country that have similar concerns on food
security.
"We are convinced that this is not just reasonable but also a moral imperative that we needed
to do something of this nature for our people. This is something that must go hand in hand
with our growth strategy," he said.
"Unless our people have food security, health security..., the (economic growth) numbers that
please the world, those would not be enough," Khurshid said.
The 9th WTO Ministerial Conference will be held in Bali from December 3-6. The
Ministerial Conference is the highest decision-making body of the 158-member WTO which
meets at least once every two years.
India to push for longer validity of WTO food subsidy waiver (BL: 15.10.13)
India’s consent to the temporary waiver being negotiated at the World Trade Organisation
(WTO) to allow developing countries to go beyond their permitted food subsidy limits will
depend on its duration and the food items covered by it.
The Government may also not agree to possible conditions attached to the waiver such as
linking it to international availability of foodgrain and global prices as proposed by some
developed countries, a Commerce Department official told Business Line.
“We want the temporary waiver or the peace clause to be in place for much longer than the
three years being offered by developed countries and all major foodgrains should be covered
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by it. The waiver should be applicable irrespective of the global market situation,” the official
said.
A group of more than 40 developing countries including India, Indonesia and the Philippines,
formally known as the G-33, have been trying to convince the WTO to amend its farm pact
(Agreement on Agriculture) to remove limits on public stock holding and food aid.
It is important for India to get a waiver because once its new Food Security legislation, which
offers 5 kg of subsidised foodgrain to about two-third of its population, is fully implemented,
it will breach the existing food subsidy limits fixed at 10 per cent of total production.
In return, these countries will support a Trade Facilitation agreement being pushed by
developed countries to improve customs infrastructure and ensure time-bound clearance of
shipments.
WTO members are hopeful of signing both agreements at the meeting of trade ministers from
all 149 member countries in Bali, Indonesia, in December. These pacts are expected to give a
boost to the Doha Round of negotiations launched in 2001.
The global trade talks have been stuck due to differences between developed and developing
country members over market access issues for both farm and industrial goods.
In a meeting of the Committee on Agriculture at the WTO on Monday, the Chairperson noted
that at this stage, members do not envisage changing the rules of the Agriculture Agreement.
“Instead, they are focusing on a shorter term way of allowing developing countries some
leeway to exceed their agreed domestic support limits when they buy, stock and supply
cereals and other food in order to boost food security among the poor,” Chairperson John
Adank of New Zealand said.
There is also no agreement on what safeguards would be available to prevent the release of
the stocks from affecting international markets, and how countries using the provisions would
provide enough information to make their actions transparent.
The G-33 wants to ensure that any agreement for a waiver should also include a time-line for
negotiating changes in the AoA to ensure that higher good subsidy limits become part of the
pact.
'Next CCEA meet to decide on duty hike of refined edible oil' (BS: 22.10.13)
There is a suggestion to keep the difference between refined and crude edible oils to 10% or
7.5%
The government is considering a duty hike of refined edible oil and the decision in this regard
will be taken in the next CCEA meeting, Food Minister K V Thomas said today.
"There is a suggestion to keep the difference between refined and crude edible oils to 10% or
7.5%. The next CCEA (Cabinet Committee on Economic Affairs) meet will take the decision
on raising the duty.
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"The CCEA meeting will be held only after the Prime Minister (Manmohan Singh) returns,"
Thomas said on the sidelines of a CII conference on 'Building Warehousing Competitiveness
- 2013'.
On the high onion price, the minister said the traders are taking advantage of the situation
where there is a shortage.
The rains have also restricted supply of onion from Maharashtra, he said.
"Traders are taking undue advantage of shortage...But we don't have any plan to abruptly ban
exports. The government this time has a stable policy. Instead of putting a blanket ban, we
are putting curbs to control export," he added.
Talking about wheat, he said the foodgrain is well accepted in the global market for its good
quality. However, the global wheat prices have now come down in a range of $260-280 per
tonne.
"A committee of secretaries (Commerce, Agriculture, Finance and Food) are studying the
situation and will take the right decision in the matter of cutting down MEP," he added.
Thomas also said there is a strong need to ensure sufficient warehouses to ensure that the
grains reach the intended targets.
"For this, we will need space to store over 85 million tonnes of grain by 2014," Thomas said,
adding that the government had space for 55 million tonnes in 2009, and today, it has only at
78 million tonnes.
Thomas further said warehousing is an important sector in the context of implementing the
food security, which Act the government adopted earlier this year.
The Minister urged entrepreneurs to take up the task of building warehouses, even though it
was not lucrative enough.
"Warehouses should have the support of government and I believe banks give out special
loans for building warehouses because as an industry, we have to grow and India needs more
warehouses," he added.
He further said the government is considering allowing village panchayats to build
intermediate warehouses, which will bring storage areas close to the recipients.
Long-term market strategies must to ease prices: CACP (BS: 25.10.13)
Onion prices have risen fourfold in the past six months
15
With onion prices showing no signs of easing, the Commission for Agricultural Costs and
Prices (CACP) has urged the Centre to draw a long-term market intervention plan to control
prices of the essential commodity.
Talking on the sidelines of AgriCorp 2013, a two-day conference organised by the Bombay
Chamber of Commerce and Industry,Ashok Gulati, chairman of the CACP, said, “There are
two ways in which the government can intervene and bring prices under control of any
commodity.”
According to Gulati, the government should first build buffer stocks, depending on onion
production and storage capacity. For long shelf-life, the onion should be hydrogenated.
During the lean season, it can be sold at a lower price. This has been found effective in the
case of commodities like sugar, as the presence of buffer stocks discourage traders from
hoarding.
Second, the government must import onion and sell it at a subsidised rate. This will bring
down onion prices substantially in the open market and the hoarders will have no option but
to sell it at the market rate.
When asked why the government should suffer losses in this exercise, Gulati told Business
Standard, “Nothing comes without a price. The government will have to bear this if it wants
onion prices to remain within certain limits.”
Anil Jain, managing director of Jain Irrigation Systems Ltd, said, “The wholesale price of
onion had been in the range of Rs 2 to Rs 4 a kg for 25 years between 1971 and 1996. After
that, the price started marginally moving up. In the last few years, the market price has
reached up to Rs 100 a kg.”
Despite such high prices, farmers were forced to sell their produce at rock-bottom prices
during the peak harvesting season, making cultivation unremunerative.
Currently, hydrogenated onion is being sold at Rs 15 a kg in certain markets as against the
prevailing market price of Rs 100 a kg. Meanwhile, wholesale onion price in Delhi touched
Rs 51.75 a kg on Thursday — a rise of Rs 1 a kg from the previous day.
Union Agriculture Minister Sharad Pawar, on Thursday, reiterated that heavy rainfall
restricted the supplies in Karnataka and Maharashtra, resulting in spiralling of prices.
Onion prices have risen fourfold in six months. Data compiled by the Ministry of Consumer
Affairs showed the retail onion price at Rs 60 a kg on Thursday in Chennai, Rs 66 a kg in
Mumbai and Rs 60 a kg in Kolkata.
The government has asked National Agricultural Cooperative Marketing Federation of India
Ltd to import onions from Pakistan and other countries. Of late, the focus of the government
has been to raise cereal output to meet the food security Bill requirement. Experts said it
should also focus on improving the production of fruits and vegetables.
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17
RICE
Punjab, Haryana eyeing 166 LT paddy purchase this season (ET : 30.09.13)
As paddy procurement starts tomorrow, Punjab and Haryana are eyeing to purchase 166
lakh tonnes (LT) of the crop for central pool for kharif marketing season 2013-14.
To ensure hassle free payment to farmers, the two states for the first time have decided to
make payment to farmers for their produce directly, though it will be optional for paddy
growers to avail new payment system.
Though Punjab has made an arrangement of procuring 150 LT of paddy, but it is expected
that 130 LT of paddy would arrive in grain markets.
"Arrangement for purchasing 150 LT of paddy has been made but we expect the arrival will
be 130 LT," a senior official of FCI (Punjab) told PTI here today.
Last season, around 127 LT of paddy was procured from Punjab.
Paddy procurement for central pool in Punjab and Haryana starts from October 1. In
neighboruing states of Haryana, the paddy procurement is expected at 36 lakh tonne, as
against 38.53 LT bought in last season, FCI official said.
"Because of shift in area under paddy to other crops, arrival of paddy may be lower this year.
Arrangement for procuring 36 LT has been made for the new procurement season," said an
official of FCI (Haryana).
In addition to it, 16 LT of basmati variety of paddy is expected to arrive in Haryana, official
said.
The major highlight of the new procurement season will be the direct payment to farmers to
be made by the procurement agencies as both states are giving an option to growers to receive
their payment directly into their bank accounts.
With direct payment, growers need not to depend upon commission agents for getting their
payment and wait for their dues.
"They can receive their payment in to their bank accounts," an official of Haryana State
Agricultural Marketing Board.
Punjab has asked it farmers to get themselves registered with state Mandi Board for availing
direct payment facility.
"Farmers are required to first get themselves registered with us for availing direct payment
system. Once farmer is registered, he will get payment directly into their bank accounts, "
official of Punjab Mandi Board said.
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Though official said it would take time before the direct payment system gets popular among
farmers.
Punjab waives taxes for Basmati procurement (FE 3.10.13)
In a bid to promote the food processing industry, the Punjab government has abolished all
levies imposed on the procurement of Basmati rice from the kharif marketing season (2013-
14), which commenced from October 1.
However, the Basmati paddy procured in Punjab would have to be processed in the state for
availing the sop.
Punjab food minister Adesh Pratap Singh Kairon told FE that the rationale behind providing
tax incentives was to encourage farmers to shift a chunk of the area under common variety
paddy to less water-intensive Basmati, which fetches a better price in global as well as
domestic markets.
“We want to promote the food processing industry in Punjab, and farmers are expected to get
better price realisation for their produce through abolition of levies,” Kairon said.
The Punjab government puts a levy as high as 14.5% on the procurement of paddy, which
includes rural development and infrastructure development cess (5%), VAT or sales tax (5%),
mandi fee (2%) and Arthiya’s commission (2.5%). From October 1, procurement of Basmati
from farmers by traders would not attract any tax, provided the paddy is processed in the
state.
“It’s a step in the right direction. The government should follow up with similar steps for
other crops — especially maize and wheat — to boost value addition in the state,” Ashok
Gulati, chairman, Commission for Agricultural Costs and Prices (CACP), said.
With rapid depletion of groundwater because of intensive agricultural practices through
cultivation of rice and wheat, the government is focusing on shifting at least one million
hectares of paddy to an alternative crop during the next few years.
“Besides, the new short-duration Pusa Basmati 1509 variety provides an opportunity for us as
it takes 120-125 days to mature as against 145-155 days taken by Pusa 1121, which has more
than 70% share in India's Basmati export market,” an agriculture scientist from Indian
Agricultural Research Institute (IARI) said.
Meanwhile, an official with All India Rice Exporters’ Association (AIREA) said Basmati
exporters from Haryana would start sourcing paddy from Punjab because of abolition of
levies and may shift processing units to the state if the Haryana government did not take
similar steps. Haryana imposes 11.5% tax on the paddy procured from the farmers in the
state.
Basmati exporters from Punjab have earlier urged the state against imposing levies by stating
that the high rate of taxes on paddy had left them uncompetitive and had a negative impact on
rice export.
Punjab contributes about 45% towards the country's annual production of long-grained
aromatic Basmati rice, which is estimated at around 4.5 million tonne.
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India exported more than 3 million tonne of Basmati during 2012-13, which is valued at more
than R17,000 crore. “With abolition of levies in Punjab, Basmati export from India is
expected to rise significantly this year,” a rice exporter said. In 2011-12, the country shipped
aromatic and long-grained rice worth R15,450 crore.
Govt's rice procurement drops to 34.1 mn tonnes in 2012-13 (ET: 03.10.13)
Government's rice procurement declined marginally by 3 per cent to 34.1 million tonnes in
the 2012-13 marketing year that ended last month due to sluggish purchases from Andhra
Pradesh and Tamil Nadu.
Consequently, rice procurement fell short of the targeted 40.2 million tonnes for the 2012-13
marketing year, that runs from October to September. In the 2011-12 marketing year, rice
procurement stood at 35 million tonnes.
State-run Food Corporation of India (FCI) and state agencies undertake procurement
operation on behalf of the government to ensure assured support price to farmers. Grains are
stored to meet demand under various welfare programmes.
"We have procured 34.1 million tonnes of rice, as against the target of 40.2 million tonnes for
the 2012-13 marketing year. The fall in procurement was due to lower purchases from two
southern states," a senior FCI official told PTI.
The drought-like conditions in Andhra Pradesh and Tamil Nadu affected production and
thereby arrivals were down in market last year, he said.
Rice procurement in Andhra Pradesh fell to 6.45 million tonnes in 2012-13 from 9.6 million
tonnes in the previous year. Similarly, procurement in Tamil Nadu declined to 4.89 million
tonnes from 15.47 million tonnes in the review period.
However, procurement in Punjab, Haryana and Chattisgarh remained higher than the
previous year.
The government's rice purchase from Punjab rose to 8.55 million tonnes in 2012-13 from
7.73 million tonnes in the previous year.
Rice buys from Chattisgarh grew to 4.8 million tonnes from 4.11 million tonnes, while
procurement from Haryana increased to 2.5 million tonnes from 1.6 million tonnes in the
review period, as per the FCI data.
FCI and state procurement agencies procured common variety paddy at Rs 1250 per quintal
and 'A' grade variety paddy at Rs 1280 last year. Procured paddy was later milled into rice.
The country had harvested 104.4 million tonnes of rice in the 2012-13 marketing year.
Rice procurement tails wheat, falls 3% in 2012-13 (BS: 05.10.13)
FCI purchased around 34.1 million tonnes of rice from farmers in 2012-13.
After an almost 32 per cent drop in wheat procurement, government’s rice purchases in 2012-
13, too, have fallen by three per cent to 34.1 million tonnes (mt) primarily because of low
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procurement in main producing states of Andhra Pradesh and Uttar Pradesh. The rice
procurement season runs from October to September.
However, experts said this is unlikely to have any impact on the ambitious National Food
Security Bill as stock in state-run warehouses is much more than the required quantity.
In FY14, government has purchased around 26 mt of wheat till September, as against 38.1 mt
in the whole of FY13. Though officially the wheat procurement season lasts till March, but
more than 96 per cent of the crop is purchased in the first four months itself. The low
procurement this year was because of increased purchases by private traders and a fall in
overall wheat production.
Meanwhile, Food Corporation of India (FCI) purchased 34.1 mt of rice from farmers in 2012-
13, while last year it had purchased 35 mt. The decline in procurement has been in Andhra
Pradesh, where purchases fell from 9.6 mt to 6.45 mt, while in Uttar Pradesh it fell from 3.35
mt to 2.28 mt.
“Procurement has dropped because of increased purchases by private traders and also low
output,” a senior government official said.
Ashok Gulati , chairman of the Commission for Agriculture Costs and Prices (CACP) told
Business Standard that the drop in procurement of paddy is good as the government has
ample stocks and this is not reflective of any long-term trend.
According to FCI data, rice stock in central pool was estimated to be 21 mt, three times more
than the required quantity of seven mt, while wheat stock was estimated to be 38.3 mt, as
against the required quantity of 14 mt. The data showed that rice procurement in Punjab,
Haryana and Chhattisgarh remained higher than the previous year.
The government's rice purchase from Punjab rose to 8.55 mt in 2012-13 from 7.73 mt in the
previous year.
In Chattisgarh , it grew to 4.8 mt from 4.11 mt, while procurement from Haryana increased to
2.5 mt from 1.6 mt in the review period, according to the FCI data.
FCI and state procurement agencies procured common variety paddy at Rs 1,250 a quintal
and A-grade variety paddy at Rs 1,280 last year. Procured paddy was later milled into rice.
The country had harvested 104.4 mt of rice in the 2012-13 marketing year.
Higher gains on basmati have exporters hoping for potboiler (BS 7.10.13)
India's position in basmati exports might consolidate further because the field trials of a new
variety, PUSA 1509
The unsteady movements of the dollar has brought anxious moments for exporters at large
but basmati rice exporters from India are envisaging better recoveries this year.
“India recorded a 54 per cent increase in the realisations from basmati exports from April to
August. We may register a 10 to 15 per cent increase in exports, with higher realisations of
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up to 25-30 per cent over last year,” a senior at the Agriculture and Processed Food Exports
Development Authority (Apeda) told Business Standard.
“Due to structural problems in Thailand, the overall exports scenario of rice has changed and
it has benefited exporters the world over. As the price of food items are going up in the
domestic and international market, the price of basmati rice is also rising. This is coupled
with the growing acceptability of Indian basmati around the world. We are expecting a
quantum jump in the realisations from exports,” he said.
India’s position in basmati exports might consolidate further because the field trials of a new
variety, PUSA 1509, have been quite successful and the new crop could be notified very
soon. It is a short duration crop with all qualities of PUSA 1121 and might replace PUSA
1121 in the next few years. This is likely to enhance export volume in the coming years, the
official added.
Satman Arora, joint managing director of Satman Overseas Ltd (Kohinoor Rice), says all
parameters of exports are perfectly placed this year. “The crop is better, the exports demand
is higher and the prices are more remunerative. So, we are expecting a 10-15 per cent jump in
our exports.”
Vijay Setia, managing director of Chaman Lal Setia Exports Ltd (Maharani Basmati), says
the carry-forward stock with exporters is
minimal. The rice mills in the past few
years have added significant capacities so
they are capable to milling higher
volumes of paddy. The Indian fine
variety rice is getting higher penetration and
recognition in West Asia very rapidly so
all these factors are likely to contribute to
higher sales in the overseas market.
While exporters are making a fast buck, the
farmers are also sanguine of getting higher returns. The new short duration variety, PUSA
1509, consumes less water and gives high yield.
Farmers are getting Rs 3,300 to Rs 3,400 per quintal of paddy this year as compared to Rs
2,200 to Rs 3,300 per quintal in the last season.
Kartar Singh of Sagrur says the mathematics for new basmati fits swell in the current
scenario of high input costs as it takes less time.
The Apeda official also confirmed up to five per cent increase in acreage under basmati in
Punjab and probability of increase in basmati acreage in the next year due to lucrative returns
to the farmers.
India pips Thailand as Singapore’s leading rice supplier (BL: 12.10.13)
India has overtaken Thailand as Singapore’s biggest rice supplier for the first time, exporting
92,865 tonnes or 32.9 per cent of the total rice supply to the island nation in the first eight
months of 2013.
22
Thailand shipped 85,816 tonnes or 30.4 per cent during January-August, The Straits
Times reported today. Vietnam supplied 77,459 tonnes or 27.4 per cent during this period.
Higher rice exports India’s rice exports to Singapore had risen to 29.5 per cent last year from 15.3 per cent in
2009.
Thailand has been the leading rice supplier to Singapore since 1998, accounting for over half
of the total rice consumption of the city state between 1998 and 2011.
But its market share fell to 35.3 per cent last year while supplies from India and other
countries have increased.
“Importers (are) taking advantage of the lower prices of Indian rice compared to Thai rice,”
the daily quoted a Trade and Industry Ministry spokesman.
The Singapore General Rice Importers Association said the shift in sourcing rice started
when global rice prices began surging in 2008.
Other rice producing countries have also curbed exports to ensure sufficient domestic
supplies while Thai crops have been hit by massive floods in the past.
Other rice suppliers to Singapore include Myanmar (2.5 per cent), Pakistan (2.4 per cent),
United States (2.2 per cent), Cambodia (0.9 per cent) and Australia (0.6 per cent) as well as
others (0.7 per cent).
Government agencies procure over 19 lakh tonne rice in 2013-14 (ET: 15.10.13)
Over 19 lakh tonne rice has been procured by the government agencies during Kharif
Marketing Season in the year 2013-14.
As per data made available to the Ministry of Consumer Affairs, Food and Public
Distribution, total 19,76,806 tonne rice has been procured till October, 15, 2013 during the
season.
Highest procurement has been made in Haryana i.e. 10,83,426 tonne followed by Punjab
8,74,761 tonne and Tamilnadu 14,934 tonne. Chandigarh have also made significant
procurement by procuring 3,685 tonne.
Farmers in Punjab selling paddy much below MSP (BS: 21.10.13)
High moisture content and discoloration of grains due to untimely rains is acting as a
deterrent in paddy procurement in Punjab. As a result, farmers are forced to sell their
produce at much below the minimum selling price (MSP) of Rs 1,345 per quintal.
According to the state agricultural marketing board data, there have been instances where the
paddy was being sold at Rs 900 per quintal against the MSP of Rs 1,345 per quintal. While,
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last year the minimum price it fetched was Rs 1,042 per quintal. It clearly indicates that the
farmers are not getting remunerative price for their crop and even lesser than the last year.
Speaking to Business Standard, one of the senior officials of the state agricultural marketing
board said, "The level of moisture content in paddy arrivals was found to be more than 20 per
cent which is in excess of permissible limit of 17 per cent. The high moisture content and
discoloring of grains acting is as a deterrent to the buyers. While the central government
agencies are refusing to buy crop citing high moisture content and discolored grains, the
private traders are procuring paddy at lower price than the MSP. Considering the weather, it
is very difficult that the moisture level in the grain will come down."
According to the data, as on October 20, in the ongoing kharif marketing season, out of the
total arrival of 48.93 lakh tonnes, government owned procurement agencies have so far
procured 35.61 lakh tonnes of paddy, which is 6 per cent lower than 37.87 lakh tonnes paddy
procured in corresponding period of last season.
While the participation of private traders in the current procurement season has increased
significantly. In the current season they had purchased 10.37 lakh tonnes, compared to 8.64
lakh tonnes during the corresponding period of the last year, thus witnessing an increase of 20
per cent. It is worth mentioning that Punjab expects to procure 130 lakh tonnes of paddy in
the current season.
Earlier, Chief Minister Parkash Singh Badal also said that the norms fixed for procuring
paddy have turned out to be "hindrances" for the process in the state.
"The specifications laid down by the Union Government, for paddy purchase, are creating
hindrances in the smooth procurement of paddy in the state,"he added.
Perturbed over the problem, farmers are seeking relaxation in crop procurement norms in the
wake of fetching lesser prices for their crop. Farmers in the state demands that the
specification pertaining to moisture content in paddy should be raised from 17 per cent to 22
per cent. They also demanded that norm for discoloured grains to be increased from three per
cent to eight per cent.
Paddy was sown over 27.50 lakh hectares in the state and it is expected that the production
may touch 160-162 lakh tones. But the state agriculture department officials said there could
be a five per cent drop in paddy yield due to inclement weather conditions.
India's rice exports may fall to 9.3 million tons in 2013-14: USDA (ET: 21.10.13)
Rice exports from India, the world's largest producer and exporter, are estimated to fall
marginally to 9.3 million tonnes in 2013-14.
Rice exports from India, the world's largest producer and exporter, are estimated to fall
marginally to 9.3 million tonnes in 2013-14 marketing year that started this month, a latest
report said.
India re-entered the rice exports market in September 2011 after a four-year ban on exports of
non-basmati rice. It had emerged as the world's largest rice exporter in 2012 ahead of its
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Asian counterpart Thailand.
According to the US Department of Agriculture (USDA), rice exports are pegged at 9.3
million tonnes for the 2013-14 marketing year (October-September), slightly lower than 10
million tonnes in the same period last year.
The report did not give reasons for projecting a likely drop in rice shipments for this year.
However, the USDA noted that the Indian government is unlikely to impose any export
restrictions in the near future with the forecast of near-record production and "more-than-
sufficient" government-held rice stocks this year.
Stating that strong exports may affect domestic price movement, the report said the
government has enough rice stocks to control any significant flare up in domestic prices due
to the upcoming general elections in 2014.
Assuming normal weather conditions during the harvesting period, the USDA said that the
country's total rice production is projected to remain near-record 105 million tonnes, as
against 104.4 million tonnes last year. A record rice output of 105.3 million tonnes was
achieved in 2011-12.
Earlier, the USDA had forecast rice output of a record 108 million tonnes this year. It has
now lowered the rice output projections considering lower planting due to deficient rains in
eastern states, the major rice growing region where most of the rice is not irrigated, the report
said.
Continued dryness in October in eastern India and the 'normal' cyclones in October-
November period across coastal India could damage the standing crop and further temper the
prospects of summer-sown rice production, it added.
USDA has pegged overall India's consumption to rise marginally to 96.70 million tonnes
during 2013-14, while estimating the total grain availability at 130.5 million tonnes for the
same period.
Rice production to be lower than estimated (BS: 22.10.13)
The deluge in parts of Odisha, resulting from cyclone Phailin, and hailstorms in Punjab and
Haryana recently are expected to hit rice production.
Earlier, the fourth revised estimate (2013-14) of the ministry of agriculture had pegged the
rice crop at 92.3 million tonnes (mt). Now, this seems a distant dream.
In 2012-13, Odisha contributed about 8.5 mt. Of the kharif acreage of 3.6 million hectares
this year, 0.5 million hectares has been affected in Odisha. This year, production in the state
might fall to one mt, said Trilochan Mohapatra, director of Rice Research Institute, Cuttak.
He added the earlier estimate of 107 mt (kharif and rabi combined) might not be met, as
adverse weather conditions had effected the crop in Odisha, western Uttar Pradesh, Punjab
and Haryana.
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Satnam Arora, joint managing director of Satnam Overseas Ltd (Kohinoor Rice), said the rice
crop in Punjab and Haryana might record a loss of two-four per cent. Ashwani Arora, director
of L T Overseas Ltd, said the crop had been hit by the delay in rains. He added production
might be up to four per cent lower than estimated.
In the 2012-13 kharif season, Punjab produced 16 mt of rice, while the output in Haryana
srood at about eight mt.
The Rice Research Institute had sent various teams to affected areas in different states and a
clear picture on production would emerge in about a week, Mohapatra said. In India, the
kharif season accounts for 88 per cent of the total rice production. As a result, damage to the
kharif crop might have a significant impact on the
overall production, Mohapatra said.
Farmers said in Odisha, floods, more than the cyclone,
had damaged the crop. But though the pre-mature and
mature crop had been damaged, the early-stage crop
could still be saved. While farmers might get some
compensation from the government, it was too early to
decide a course of action, said a farmer.
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27
WHEAT
India may set record wheat output this year on good rain: Government
(ET 26.09.13)
The government today said the country's wheat production this year may surpass the
previous record of 94.88 million tonnes after good rains took water reservoir levels to a 10-
year high.
India, the world's second-biggest wheat grower, had produced a record 94.88 million tonnes
of wheat in the 2011-12 crop year (July-June), buoyed by a good monsoon. Poor rains in
2012-13 lowered the output to 92.46 million tonnes.
"We are quite confident that we will easily achieve the wheat production target of 92.5
million tonnes this year as the water level in reservoirs is the highest in the last 10 years. If
the temperature remains good at various stages of crop growth, we could even cross the
previous record," Agriculture Commissioner J S Sandhu told PTI in an interview.
Sandhu said water in the country's reservoirs has risen to 130 billion cubic meters now, as
against 155 billion cubic meters of usable storage capacity.
While the reservoir position is very good in the north, south and west, there hasn't been much
improvement in central India due to less rainfall, he added.
As soil moisture is good, sowing of rainfed wheat will begin next month, while planting in
irrigated areas will start in the first week of November, he added. Sowing of wheat, the main
rabi (winter) crop, normally starts in October and harvesting takes place in March-April.
Sandhu said farmers will be encouraged to use two seed varieties (HB2967 and HH1105) that
are resistant to yellow rust fungal disease. Availability of the two seed varieties is sufficient,
he added.
On other winter crops, Sandhu said, "We aim
to achieve a total foodgrain production of
128.5 million tonnes in the rabi season of
this year. It is an easily achievable target."
The government has set a rabi production
target of 12 million tonnes for pulses, 14
million tonnes for rice, 4.4 million tonnes for
maize and 1.5 million tonnes for barley, he
added.
Wheat export: MMTC, STC & PEC get bids lower than floor price (BS: 04.10.13)
In Aug, CCEA had approved 2 MT of wheat exports from FCI godowns for this fiscal subject
to a floor price of $300 per tonne
28
State-owned trading firms STC, MMTC and PEC have received 11 bids for their tenders to
export 1.6 lakh tonnes wheat from the FCIgodowns with highest quotation of $267 per tonne,
which is lower than the floor price fixed by the government.
In August, the Cabinet Committee on Economic Affairs (CCEA) had approved 2 million
tonnes of wheat exports from FCI godowns for this fiscal subject to a floor price of $300 per
tonne through STC, MMTC and PEC.
STC received highest bid of $267 a tonne, while maximum quotations by global bidders in
case of MMTC and PEC were $261 per tonne and 260.08 per tonne, respectively, a
government official said.
STC and MMTC had invited tenders for export of 60,000 tonnes each from Mundra and
Kakinada ports, respectively, while PEC had invited bids for export of 40,000 tonnes from
Kandla port.
Sources said that PEC received six bids, MMTC got two bids and PEC three bids. The
bidders included Cargill, Emmsons and Starcomm.
As bids are lower than the base price, the Empowered Committee headed by Commerce
Secretary may not approve export at such a lower rate.
In 2012-13 fiscal, the government had earned $1.4 billion from export of 4.2 million tonne
wheat by PSUs. Indian wheat had fetched an average price of $311.38 per tonne.
Centre to raise wheat support price by Rs 50 a quintal (BS: 18.10.13)
Agricultural Ministry had pitched for rise of Rs 100 per quintal
Surging food inflation has prompted the government to increase the minimum support price
(MSP) for wheat during 2014-15. On Thursday, the Cabinet Committee on Economic Affairs
(CCEA) cleared an increase of Rs 50 a quintal for procurement.
“Wheat MSP has been increased by Rs 50 per quintal to Rs 1,400 for the 2014-15 crop year
(April-March) as against Rs 1,350 last year,” said Food Minister K V Thomas.
CCEA also approved an increase of Rs 50 for mustard MSP, to Rs 3,050 a quintal. The
support price for chana (gram) was raised by Rs 100 to Rs 3,100 a quintal. For masur, the
MSP was increased by Rs 50 to Rs 2,950 a quintal and safflower by Rs 200 to Rs 3,000 a
quintal.
While the increase in wheat MSP is the same as recommended by the government advisory
body, Commission for Agricultural Costs and Prices (CACP), the agriculture ministry had
pitched for a rise of Rs 100 a quintal on wheat MSP.
On the reasons for rejecting the agriculture ministry’s proposal, Thomas said: “We are
concerned about inflation and we can control prices of foodgrains, which we procure.”
In the 2013-14 crop marketing season (April-March), CACP had recommended freezing of
29
the wheat MSP at the existing Rs 1,285 a quintal. The Commission had said the huge wheat
stocks with the government did not make raising MSP a feasible option.
However, following strong opposition from various quarters, it had to review its decision.
The government later fixed the wheat MSP at Rs 1,350 a quintal — an increase of Rs 65 a
quintal. The government procures wheat from farmers at MSP during April-June.
Wheat is the main crop grown in the rabi (winter) season. Wheat sowing begins in October
and harvesting starts from April. India produces 90-95 million tonnes of wheat every year.
The wholesale price index-based food inflation has been hovering around 18 per cent for
August and September. However, the rate of price rise in wheat declined to 5.90 per cent in
September from 7.60 per cent in August.
Govt limits wheat MSP hike to Rs 50/quintal on inflation worry (ET 18.10.13)
Concerned about inflation, the government today hiked the minimum support price (MSP) of
wheat by Rs 50 a quintal for the marketing year starting April 2014, rejecting a proposal for
a higher increase.
Concerned about inflation, the government today hiked the minimum support price (MSP) of
wheat by Rs 50 a quintal for the marketing year starting April 2014, rejecting a proposal for a
higher increase.
"Wheat MSP has been increased by Rs 50 per quintal to Rs 1,400 for 2013-14 crop year as
against Rs 1,350 last year," Food Minister K V Thomas said.
The Cabinet Committee on Economic Affairs approved the hike in wheat MSP as
recommended by the Commission for Agriculture Costs and Prices (CACP), the government
advisory body. The CCEA rejected Agriculture Minister Sharad Pawar's proposal to pay
farmers Rs 1,450 per quintal of wheat.
Asked why the Agriculture Ministry's proposal wasn't accepted, Thomas said, "We are
concerned about inflation. When MSP goes up, obviously prices in the open market rise and
we have no control on that."
The CACP had recommended an increase of Rs 50 per quintal of wheat, keeping in view high
inflation in cereals and exports becoming unviable. It felt the existing MSP was comfortably
higher than the projected cost of production.
"We need to take a balanced decision of protecting both farmers and consumers. We are
giving a price support to farmers and not the income support," Thomas said.
The CCEA also approved MSP increases for gram by Rs 100 per quintal to Rs 3,100, masur
by Rs 50 per quintal to Rs 2,950 and mustard seed by Rs 50 per quintal to Rs 3,050.
The MSP of barley has been raised by Rs 120 per quintal to Rs 1,100 and safflower by Rs
200 per quintal to Rs 3,000 for 2014-15.
30
Inflation as measured by the wholesale price index rose to a seven-month high of 6.46 per
cent in September, while it was 9.84 per cent as per the consumer price index amid higher
prices of cereals and vegetables.
The increase in wheat MSP is likely to lead to a rise in the government's food subsidy bill in
the next fiscal.
Sowing of wheat starts in October and harvesting takes place from April.
Wheat MSP rise: No field day, say farmers (BS: 18.10.13)
Being an election year, the farmers were expecting a significant revision in the minimum
support price, in line with inflation
The farmers of Punjab and Haryana, backbone of the country's food procurement, are
dismayed at the Centre's decision to revise the minimum support price (MSP) of wheat by Rs
50 a quintal for rabi 2014.
Being an election year, the farmers were expecting the government to revise the price in line
with the rising input costs.
Pavitarpal Singh Pangli, president, PAU (Punjab Agricultural University), Ludhiana Kisan
Club, said PAU and Punjab State Agriculture Department had recommended an MSP of Rs
1,855 a quintal. "The increase in the cost of diesel, fertilisers and labour wages have
burdened the farmers. So, at least a Rs 500 revision was needed."
He added a protein-based price of wheat should be introduced to provide better remuneration
in Punjab, Haryana, western Uttar Pradesh and parts of Madhya Pradesh. "This is followed
internationally."
"Instead of a blanket price across India, the high-protein wheat should be seggregated from
the low-protein one. This could encourage farmers to grow better wheat."
Jagtar Singh Mehma, a farmer in Bhatinda, Punjab, said the perception created by the Centre
regarding remuneration and inflation was not logical. "The farmer community is highly
indebted in India and a higher remuneration is a must. There is no correlation between
inflation and rationalisation of MSP".
Mehma said besides input costs, the lease rate of land in Punjab had been increasing.
"Majority of the fields in Punjab are ploughed by tenants. Since the opportunity cost of land
is high in Punjab, big landlords revise the lease rate a year. A farmer in Punjab pays Rs
40,000 an acre of rent. This is not added to the cost by the Commission of Agriculture Cost
and Price."
"The investment in farming by farmers in Punjab and Haryana is very high due to low water
table and depleting nutrients."
31
Cabinet soon to consider cutting wheat export floor price (ET: 24.10.13)
The cabinet will soon consider cutting the floor price for wheat exports by 13 percent, two
government sources said on Thursday, potentially boosting supplies from the world's second-
biggest producer and easing benchmark prices in Chicago.
"After an inter-ministerial consultation, a note is being prepared to help the cabinet take up
the issue of lowering the price to $260 a tonne," said a government source involved in the
process.
Another source confirmed the move.
No date has been fixed for the next cabinet meeting, which would be the final step for a cut in
wheat export prices. Consensus between ministries usually means the cabinet will approve at
this stage, although new hurdles can emerge.
Cabinet meetings are usually on Thursdays but it was not held this week because Prime
Minister Manmohan Singh was travelling back from China.
Reuters reported on Oct. 15 that the government might soon cut the floor price for exports of
wheat from state-run warehouses, overflowing with stocks after bumper harvests since 2007.
Stocks will surge further as farmers are poised to harvest a bumper winter crop after above
average monsoon rains raised soil moisture levels and replenished reservoirs.
32
33
MAIZE/ COARSE CEREALS
Maize production may touch record 25 mn tonnes this year (ET: 07.10.13)
Maize production in India this year is likely to touch record 25 million tonnes as adequate
monsoon rains trigger higher acreage across growing states.
According to data available from Ministry of Agriculture, area of maize as on October 2 has
risen by 11% to 82.24 lakh hectare as against 74 lakh hectare in the corresponding period of
last year.
Higher than normal monsoon across major growing states like Andhra Pradesh, Karnataka,
Maharashtra and Madhya Pradesh is likely to further push rabi acreage this fiscal. As per the
first advance estimates of Ministry of Agriculture, maize production is expected at 17.8 mln
tonnes compared to around 16 mln tonnes as per fourth estimates for 2012-13.
"Maize production is likely to surpass all records this year. We expect bumper crop as kharif
production may cross 18 million tonnes by the time Ministry comes out with second advance
estimates as first estimates are usually very conservative," Mr. Raju Choksi, Vice-President
(Agri-Commodities), Anil Nutrients Ltd. said. Mr. Choksi added that rabi production last
year stood at around 6.25 mln tonnes despite bad monsoon and so this year; rabi production
too is likely to be higher.
"Maize prices have been firm since last couple of months due to scarce supply in the market.
With kharif crop likely to arrive in the markets from next fortnight onwards, the prices are
expected to fall by 7-10%," Mr. Choksi said. The prices will also be impacted because of
higher global supply. "Global supply of maize is likely to rise following record crop in
Argentina, Brazil and Black Sea Region; who are major exporters to world markets. India is
currently out priced in the international markets as Indian corn is being offered at USD 270-
275/MT FOB Kakinada/Vizag against Ukrainian origin which is being sold around USD
235/MT CNF South Korea," Mr. Choksi informed.
Maize has been trading in the range of Rs. 1,500-1,600 per quintal across major spot markets,
much above minimum support price (MSP) of Rs. 1,175 per quintal fixed by government last
year. This year, government has fixed MSP of Rs. 1,310 per quintal, higher by about 11%
compared to last year.
Maize set to glisten on rains (BS: 10.10.13)
Summer and winter crop expected to total 25 million tonnes, 10% higher than last year's
Riding the wave of a good monsoon, the maize crop in 2013-14kharif and rabi together is
likely to have a record production. Industry and farmers are putting the total crop at 24.5 to
25 million tonnes, by the indications available.
According to data from the ministry of agriculture, the sowing area of maize as on October 2
(kharif) had risen by 11 per cent to 8.22 million hectares against 7.4 million hectares in the
year-ago period. Rabi production is 20-25 per cent of total production.
34
Lured by the high remuneration (Rs 1,350-Rs 1,750 a quintal against the minimum support
price of Rs 1,175 a quintal last year) the farmers in all maize-growing states have increased
the sowing area.
Experts are expecting an increase of at least 10 per cent in the output this year.
According to Raju Choksi, vice-president (agri-commodities), Anil Nutrients, a higher-than-
normal monsoon across major growing states like Andhra Pradesh, Karnataka, Maharashtra
and Madhya Pradesh is likely to further push rabi acreage this financial year. By the first
advance estimates of the ministry of agriculture, production is expected at 17.8 million tonnes
compared to 16 million by the fourth estimates for 2012-13.
“Production is likely to surpass all records this year.
We expect bumper crop as the kharif
production may cross 18 million tonnes by the time
the ministry comes out with the second
advance estimates, as the first estimates are
usually very conservative,” he said. Choksi
added the rabi production last year was 6.25
million tonnes despite a bad monsoon and so this year production was likely to be higher.
The projections of a higher acreage and yield is music to the ears of the starch industry,
operating under thin margins. Many units had closed due to high cost.
According to Vishal Majithia, president of All IndiaStarch Manufacturers' Association, the
arrivals of kharif crop may get delayed due to the prolonged monsoon. “It may get deferred
by a month. So, we may have a flush of arrivals in December instead of November. The
excess rain may increase the moisture content in maize and may also destroy the crop. The
high moisture content also mars the prospects of exports,” he added.
He conceded the overall crop should be better than last year’s.
Jang Bahadur Singh Sangha, a farmer in Punjab, said the thrust on the diversification of
agriculture and the state's efforts have driven farmers towards maize. If the farmers get a
price higher than the minimum support price, the trend would continue, he added.
Cereal exports to be under pressure (BS: 14.10.13)
Initial surge might not sustain due to global oversupply and falling prices, says trade
While the initial export of cereals such as wheat, maize and rice was encouraging, their
shipments are likely to moderate over the rest of the year, due to surplus global supply and
estimates of lower realisation.
Private exporters and government agencies shipped 3.29 million tonnes of wheat in the first
five months of the current financial year as compared to 1.52 mt in the corresponding period
last year. Basmati and non-basmati rice exports saw a jump to 1.75 mt and 2.76 mt from 1.5
mt and 2.54 mt, respectively. Shipment of other cereals moved to 2.41 mt from 1.99 mt in the
period between April and August, show data compiled by the Agricultural and Processed
35
Food Products Export Development Authority (Apeda).
However, the trend is not expected to continue. “It might reverse now, due to falling global
prices on global over-supply,” said M P Jindal, president, All India Rice Exporters
Association (AIREA).
Prices of all agri commodities, including cereals, have fallen up to 42 per cent in the past year
on a rise in supply. The near-month contract on the benchmark Chicago Board of Trade for
wheat and corn (maize) fell 33.5 per cent and 40.7 per cent to $6 a bushel and $4.41 a bushel,
respectively, over a year. Rice remained resilient, with a marginal 2.2 per cent decline to
$15.13 for every 100 pounds.
The decline has moderated prospects for India’s exports of cereal. Jindal estimates these to
decline 15-20 per cent this year.
Also, the Food and Agricultural Organisation of the United Nations recently estimated global
cereal output to rise 7.7 per cent to 2,489 mt in the marketing season (July–June) this year, as
compared to 2,312 mt in the previous year. But world utilisation of cereals is set to keep a
lower pace of growth, of just 3.3 per cent, to 2,415 mt (earlier, 2,339 mt). Consequently, the
world stock is set to swell 12.4 per cent to 558.9 mt in 2013-14 as compared to 497 mt last
year.
“Wheat and maize might see a decline in exports this year but that will be covered by an
increase in export of basmati rice. In value terms, therefore, overall export of cereals would
remain the same as last year,” said A K Gupta, advisor, Apeda..
Assuming the value of cereal exports remains the same as last year, the quantity of shipment
will surely decline to the tune of depreciation in the rupee against the dollar. The rupee fell
16.53% to close at 61.55 against the dollar on Monday.
Basmati rice exports in India are set to rise to 4 million tonnes this year from the level of 3.5
million tonnes in the previous year.
According to Vijay Setia, ex-President of AIREA, India is enjoying a premium at least in rice
over its competing countries including Pakistan, Thailand and Vietnam. Pakistan produces
around 6.5 million tonnes of rice and exports around half of it. Out of 110 million tonnes of
rice production, India exports around 10 million tonnes annually.
India’s rice exports would continued to find a niche market globally being the world’s
healthiest rice with a number of health benefits. Exports of other cereals, however, would
continue to remain under pressure, said.
36
37
PULSES
Kharif pulses crop may have been underestimated (BL 4.10.13)
Confusion marks the first advance estimate of kharif 2013-14 pulses production.
According to the Ministry of Agriculture, pulses production for the season is 60 lakh tonnes.
This may be an under-estimate given that total acreage under pulses this season has been
higher by about six lakh hectares at 105 lakh ha, according to the Ministry’s acreage data.
Importantly, temporal and spatial distribution of South-West monsoon has been significantly
better this season than in 2012, raising the prospects for better yield.
According to the Ministry’s fourth advance estimate for 2012-13 (released on July 22, 2013),
total production of pulses during kharif 2012 was 59 lakh tonnes.
In other words, for the kharif 2013 season, despite a six lakh hectare increase in area planted,
the incremental production is a mere one lakh tonnes, that too in a season when precipitation
was more than satisfactory.
The confusion is compounded by a PIB release (infographics) that shows kharif 2012 pulses
production at 53 lakh tonnes.
Without any doubt, pulses production this season (kharif 2013) ought to be about four lakh
tonnes higher than last year’s, given higher acreage and satisfactory precipitation.
Anecdotal evidence bears this out. Trade and industry representatives from different parts of
the country point to improved yields. Crop damage is believed to be minimal.
Despite a marked expansion in planted area if pulses production has increased just
marginally, the Government’s production strategies and implementation should come in for
serious scrutiny.
It is imperative the Agriculture Ministry reviews the apparent anomaly without delay.
Revision of crop production data is not uncommon.
Estimate of 60 lakh tonnes (instead of a more realistic higher number) can unnecessarily fan
speculative interests, something best avoided.
Suppliers around the world are closely watching Indian pulses production, and would only be
too happy to jack up their export prices as India is forced to import pulses to meet the
domestic shortfall.
38
Domestic market prices of pulses also bear out the strong possibility of an underestimate of
kharif 2013 crop production.
Even five months after harvest (Rabi 2013), chana still rules at about Rs 3,000 a quintal.
Arrival pressure has kept prices of kharif pulses under reasonable check despite pick up in
seasonal demand.
Farm-gate rates of tur and urad are closer to the minimum support price announced for the
crops (Rs 4,200-4,300).
The apparent anomaly in pulses acreage and production estimate for 2012 and 2013 kharif
season needs to be corrected immediately so that the market gets correct information and the
right signals.
Sadly, like last year, this year too, kharif production has fallen far short of the official target
of 70 lakh tonnes.
Someone in the government must explain what has gone wrong. To what extent the next Rabi
harvest will be able to make up for the kharif shortfall remains to be seen.
Pulses may rally on reports of crop damage (BL 5.10.13)
With demand outstripping arrivals, both pulses and pulse seeds are ruling higher in Indore
mandis. Even as local mandis were closed on Friday on account of Amavasya, a majority of
pulse seeds ruled firm. Both moong and urad have been witnessing a bullish trend on slack
arrival and higher demand. Moong (new) is currently ruling at Rs 5,400-5,600 a quintal,
while moong (Maharashtra) ruled at Rs 5,600-5,800.
Amid report of damage to moong and urad crops, arrival of both the pulse seeds in mandis
here has declined sharply leading to steep rise in prices (Rs 700 a quintal) in the past two
weeks.
Rally in moong also perked up its dal with moong dal (medium) being quoted at Rs 6,200-
6,400 , moong dal (bold) at Rs 6,500-6,700, while moong mongar ruled at Rs 6,800-7,200 a
quintal.Urad (bold) was being quoted at Rs 4,100 , while urad (medium) ruled at Rs 3,500-
3,800. Amid report of damage to the crop, a rally in urad also appears imminent in the
coming days, said a trader Prakash Vora.
Urad dal (average) was at Rs 4,500-4,600, urad dal (bold) ruled at Rs 4,700-4,800, while urad
mongar is ruling at Rs 5,200-5,500.
Rise in demand and improved buying support from the millers have lifted masoor in Indore
mandis as well with masoor (bold) being quoted at Rs 4,200-25 , while masoor (medium)
ruled at Rs 3,800-4,200. Masoor dal (average) was being quoted at Rs 4,850-5,000, masoor
dal (medium) at Rs 5,050-5,200 a quintal.
Rally in pulses may continue on fears of crop damage (BL: 23.10.13)
Strong buying support and weak arrivals have lifted tur prices in Indore mandis in the past
one week by almost Rs 150 a quintal.
39
On Wednesday, tur (Maharashtra) was quoted at Rs 4,550 (Rs 4,375-4,400), while tur
(Madhya Pradesh) increased to Rs 4,000-4,150.
Rise in tur and other pulse seeds in Indore mandis has been attributed to increased buying
support from millers and traders ahead of Diwali. The bullish trend in tur and other pulse
seeds will likely continue this week, said Rahul Vora, a local pulse trader .
Rise in tur has also lifted its dal over the past one week on improved buying support with tur
dal (full) being quoted at Rs 6,300-6,400, tur dal (full) at Rs 5,800-5,900, while tur dal marka
ruled at Rs 7,000-7,100.
Slack arrival and strong demand have lifted urad prices by Rs 200 within a week, with urad
(bold) being quoted at Rs 4,300 , while urad (medium) ruled at Rs 3,500-3,800 .
With arrival being lower on account of damage to the crops due to heavy rains and lesser
import deals, rally in urad will likely continue in the coming days, said a trader. Urad dal
(medium) was at Rs 4,800-4,900, urad dal (bold) at Rs 5,500-5,600, while urad mongar ruled
at Rs 6,800-7,200.
Moong and its dal ruled stable on subdued demand and buying support with moong (bold)
remaining firm at Rs 5,400-5,500, while moong (medium) ruled at Rs 4,500-4,800.
Given extensive damage to the crop this year due to rains, rally in moong will also likely to
continue in coming days. Moong dal on (medium) was being quoted at Rs 6,300-6,400,
moong dal (bold) at Rs 7,000-7,100, while moong mongar ruled at Rs 7,400-7,700 a quintal
respectively.
40
41
EDIBLE OILS / OILSEEDS
Crop damage to cap soybean output growth this year (BS 1.10.13)
Excessive rainfall in a couple of major soybean-growing areas damaged the crop
India's soybean output is set to rise a marginal two per cent this kharif season, despite a
substantial 12 per cent increase in sowing area. Excessive rainfall in a couple of major
soybean-growing areas damaged the crop, leading to a decline in average yield this year.
Data compiled by the Soybean Processors' Association (SOPA) estimates India's total
soybean output this
year at 12.98 million
tonnes, as compared
to 12.68 million
tonnes in the
previous season. The
soybean output,
however, showed a
staggering 11.41 per
cent increase from
2011.
Despite prices of soybean remaining under pressure throughout the last year, farmers evinced
interest in bringing more area under this major kharif oilseed crop amid expectations that the
government would arrange soybean procurement at the minimum support (MSP) price
announced by it at the beginning of the season. While soybean prices fell below the MSP on a
couple of occasions last year, farmers remained hopeful of a recovery due to India's reliance
on imported edible oil.
"Based on the data collected by agriculture departments of the respective states, the area
covered under soybean cultivation during kharif 2013 is 120.327 lakh hectares, as compared
to 106.948 lakh hectares during kharif 2012, which shows a growth of 12.51 per cent. Due to
the timely arrival of the monsoon, the area under soybean cultivation has increased during
kharif 2013. But the crop suffered due to continuous rains and floods," said Rajesh Agrawal,
SOPA co-ordinator. According to the survey conducted by SOPA, the all India estimated
yield for kharif 2013 is estimated at 1,079 kg per ha as compared to 1,185 kg per ha in the
previous season, a decline by 8.94 per cent.
"Higher soybean output would increase farmers' holding capacity as shown during the last
year. Also, it would reduce India's reliance on imported oil," said Dinesh Shahra, managing
director of Ruchi Soya Industries Ltd, a leading FMCG player in India.
42
India currently imports 53 per cent of its 16.5 million tonnes of annual edible oil demand,
while the remaining is met through domestic sources.
CCEA approves National Mission on Oilseeds and Oil Palm during the 12th Plan period
(ET: 04.10.13)
The Cabinet Committee on Economic Affairs (CCEA) has approved the implementation of the
National Mission on Oilseeds and Oil Palm (NMOOP) during the 12th Plan Period with
financial allocation of Rs.3507 crore.
This would help in enhancing production of oilseeds by 6.58 million tonnes. This would also
bring additional area of 1.25 lakh hectares under Oil Palm cultivation with increase in
productivity of fresh fruit bunches from 4927 kg/ha to 15,000 kg/ha and increase in collection
of tree borne oilseeds to 14 lakh tonne.
Implementation of the proposed Mission would enhance production of vegetable oil sources
by 2.48 million tonnes from oilseeds (1.70 million tonnes), oil palm (0.60 million tonnes) and
tree borne oilseeds (0.18 million tonnes) by the end of the 12th Plan Period.
The implementation strategy in the Mission would place emphasis on increasing the Seed
Replacement Ratio (SRR) with focus on varietal replacement; increasing irrigation coverage
under oilseeds from 26 percent to 38 percent; diversification of area from low yielding
cereals crops to oilseeds crops; inter-cropping of oilseeds and use of fallow land; area
expansion under oil palm and TBOs; increasing availability of quality planting materials of
oil palm and TBOs; enhancing procurement of oilseeds and collection and processing of
TBOs. Recommended varieties and proven technologies would be demonstrated in a cluster
approach through mini kits and frontline/cluster demonstration. The cluster approach would
ensure participation of all categories of farmers, irrespective of the size of their holdings,
social status and would demonstrate visible impact of technologies in enhancing productivity
and production.
Gujarat to get record groundnut production as good rainfall doubles the yield (ET:
07.10.13)
Gujarat is expected to harvest record ground nut crop of 25.95 lakh tonnes during 2013-14
as the yield doubles over last year due to good rainfall.
Groundnut is one of the major crops in kharif season and Gujarat is the prominent state
growing groundnut. Since last 6 years, SEA Groundnut Promotion council has been
conducting the Groundnut crop survey to assess the size and quality of the Groundnut crop
for the benefit of the members and the industry at large.
Gujarat Government has reported that 16.60 lakh hectares is under Groundnut crop sown
during kharif season compared to 12.24 lakh ha in 2012-13 and 14.34 lakh ha in 2011-12.
A release of the Solvent Extractors Association stated, ""Average yield per hectare has
increased to 1560 Kg. per hectare against 760 Kg. per hectare last year. Gujarat is expected to
harvest record crop of 25.95 lakh tonnes during kharif season.""
43
This estimate is based on survey done between October 3 and 5, 2013. The crop sown earlier
during the first half of June is nearly matured and required dry spell for harvest. However, if
rain continues, there could be some damage to the standing crop ready for harvest to the
extent of about 5/7% and may be reduced approximately around 1.50 Lakh Tonnes.
Groundnut production to quadruple in Gujarat: SOMA (BS 7.10.13)
The association estimates about 2.40 mn tonnes groundnut production this year as against
600,000 tonnes in previous year
Saurashtra Oil Millers’ Association (SOMA) has estimated almost four times higher
groundnut production as compare to last year in Gujarat.
According to the association, good monsoon has encouraged farmers to take up groundnut
sowing in a big way which may result into increased production.
SOMA has estimated about 2.40 million tonnes groundnut production in Gujarat. According
to the association, the groundnut production was about 600,000 tonnes last year in the state.
At its annual general meeting (AGM) on Sunday in Rajkot, the oil millers’ apex body said
that, Gujarat has received good rainfall during monsoon and due to which the yield has
benefited.
Good rainfall has benefited the groundnut yield which may increase by nearly three times
from last year’s 500 kg per hectare to 1,500 kg per hectare. SOMA informed that groundnut
is sown on 1.65 million hectares of areas in Gujarat during this kharif season as against 1.17
million hectares in last year.
Samir Shah, president of SOMA said, “There might be some damage in groundnut crop due
to heavy rain at the end of monsoon but overall scenario is very positive as sowing has
increased in this kharif season. Sufficient and timely rainfall has increased the expectation of
higher yield in groundnut crop.”
As per the SOMA data, highest groundnut production will be seen in Junagadh district with
650,000 tonnes, follow by Jamnagar with 555,000 tonnes and Rajkot with 470,000 tonnes.
On the other hand lowest groundnut production has been estimated for Surendranagar district
with 25,000 tonnes as cotton areas is higher than groundnut there. For Banaskantha district,
SOMA has predicted 60,000 tonnes groundnut production.
Talking about the method of survey for groundnut production estimate, Manubhai Pateliya,
vice president of SOMA said, “Association is still using traditional method for groundnut
production estimation. We contacted more than 500 farmers and asked them about the growth
of plants, yield expectation. On the basis of these details, we have estimated the production.”
However, SOMA also confirmed that several millers were engaged in manipulative activities
in edible oils. Some of the millers were mixing groundnut oils.
This has tarnished the image of edible oil industry of Gujarat. Issues such as export of
44
groundnut oil, stock limits and some tax related matters were raised in the AGM.
The leaders have decided to meet the concerned state and central government officials to
resolve the matters.
India soymeal exports down 4% in oil year 2012-13: SOPA (BS 7.10.13)
India soymeal exports decline 4.13 per cent in the recently completed Oil year (October
2012- September 2013) compared to previous Oil year (October 2011-September 2012),
according to Soybean Processors Associations of India (SOPA).
Exports in Oil year 2012- 13 stood at 3,473,133 tonne compared with 3,622,909 tonne in the
Oil year 2011-12.
"Marginal decline was expected as soybean arrivals remained low in the last Oil year," said
Rajesh Agrawal, spokesman and coordinator, SOPA. Soybean is the basic raw material for
soymeal.
Major export destinations were Iran, Japan, France, Thailand, Vietnam, Indonesia and Korea.
On a financial year basis, the export during April 2013 to September 2013 was 876,294 tonne
compared with 837,078 tonne in the same period last year up 4.68 per cent.
"Current Oil year started with weather uncertainties and new crop quality issues but we hope
the situation gets better in the coming days," added Agrawal.
Oilmeal exports up 104% in September (BS 7.10.13)
In the month, India exported 294,830 tonnes of oilmeal compared to 144,787 tonnes in year
ago period
Exports of oilmeals in the month of September 2013 was up by 104% due to heavy import
demand from Iran and Europe and South Korea coupled with depreciation in the rupee,
Solvent Extractors' Association said in a press release.
In the month of September, India exported 294,830 tonnes of oilmeal compared to 144,787
tonnes in the same period a year ago.
Oilmeal imports by South Korea from India during April-September this year is reported at
518,178 tonnes compared to 459,303 tonnes last year, while Iran imported of 571,171 tonnes
compared to 456,687 tonnes, Thailand imported of 100,248 tonnes compared to 119,596
tonnes.
Vietnam and Indonesia have both decreased their oilmeal imports from India as both the
countries have increased their crushing as well as India faces stiff competition from other
countries as well, SEA said in a report.
Vietnam imported 67,191 tonnes compared to 205,878 tonnes last year, while Indonesia
imported 39,180 tonnes compared to 99,480 tonnes of last year.
45
Europe has turned out to be bigger market for India. Europe and others have imported
196,744 tonnes compared to 31,326 tonnes of last year.
Soyameal exports touch all time high of over Rs 10000 cr (BS 9.10.13)
Exports of soyameal during the same period last year stood at Rs 7,745.36 crore: SOPA
Exports of soyameal have jumped 37% to touch an all time high of Rs 10,588.43 crore in
marketing year 2012-13 (October-September), mainly on the back of rupee depreciation.
Exports of soyameal during the same period last year stood at Rs 7,745.36 crore, according to
the data available with Soyabean Processors Association (SOPA).
"Total realisation from exports this year was high despite fall in the quantity of exports,
manly due to fall in the value of rupee against dollar," SOPA spokesperson Rajesh Agrawal
said.
However, in quantitative terms, the total exports of soyameal declined 4% to 34.73 lakh
tonnes during the marketing year 2012-13 from 36.23 lakh tonnes in the previous year on
lower availability of soyabean for crushing.
Also, soyameal exports to Iran have jumped 85% to 9.64 lakh tonnes during marketing year
2012-13 amid trade sanctions from the US.
Japan, France, Thailand, Vietnam, Indonesia and Korea are the other major destinations for
Indian Soybean meal exports.
Soyameal is mainly used as animal feed and India is Asia's biggest soyameal exporter.
Japan may import rice bran oil from India, to improve fiscal numbers (ET: 17.10.13)
Rice bran oil is gaining popularity across the world as it is rich in mono-unsaturated fatty
acids and has a higher cholesterol reducing power.
There is some good news for theUPA government, which is trying hard to tackle the rising
import bill. Japan has shown interest in buying rice bran oil from India - a country that
depends on import of edible oil for meeting nearly 60 per cent of its domestic consumption.
Export of rice bran oil will help India earn foreign exchange, thus reducing the rising import
bill on account of edible oil.
India is likely to import edible oils worth Rs 56,000 crore in the current oil year (November
2012- October 2013). In volume terms, the country is expected to import 10.5 million tonne
edible oil this oil year.
Talking to ET, BV Mehta, executive director of the Solvent Extractors' Association of India
(SEA), said: "Indian rice bran oil, known as 'heart oil' in Japan, may soon land on the coast of
Japan if every thing goes well. Manufacturers of Japanese rice bran oil (they also call it rice
oil) have shown keen interest in the import from India. Some of the Japanese producers are
also looking for joint ventures with Indian companies for value-added products." In fact, a
seven-member Japanese team from Wakayama Prefectural government has recently met the
members of SEA to discuss the possibility of importing rice bran oil from India.
46
India is the second-largest producer of the oil after China and the country has the potential to
produce over 14 lakh tonne rice bran oil. Currently, it produces about 9 lakh tonne, of which
only 3 lakh tonne is used as edible oil. The rest is used by vanaspati industry or blended with
other oils.
Rice bran oil is gaining popularity across the world as it is rich in mono-unsaturated fatty
acids and has a higher cholesterol reducing power. It has the highest amount of oryzanol,
which has cholesterol lowering properties, unique micro nutrients and natural antioxidants
compared to other cooking oils. It reduces cholesterol absorption, blood platelet aggregation
and increases cholesterol excretion, thus reducing total cholesterol effectively.
However, a major hurdle for the bulk exports is the existing policy. The government does not
allow bulk exports of edible oils. It only allows exports of small packs of 5 kg with a
maximum limit of 20,000 tonne. "We will take up the matter with the government so that rice
bran oil can be exported to Japan and other countries," Mehta said.
In India, rice bran oil, which is available at Rs 110-115 per litre, is giving a tough
competition to olive oil. "After Adani Wilmar launched rice bran oil under its Fortune brand,
it has witnessed tremendous growth in the domestic market. In the current fiscal year, rice
bran oil is expected to grow 25 per cent. Olive oil industry is facing a big challenge from rice
bran oil," said AR Sharma, chairman of AP Solvex, the largest rice bran oil producer in the
country.
Mustard crop to be mapped through satellites (BS 18.10.13)
Currently, a satellite-based crop estimation technique is used extensively for sugarcane by
ISMA
For the first time, cereal crops will be mapped in India through the satellite-based Geographic
Information System (GIS). A pilot will be on the mustard crop from the coming Rabi season.
According to officials, the GIS will also be used to provide information on spatial distribution
of the mustard crop, production and estimates, weather forecasting, market price fluctuations
in major mustard producing states such as Rajasthan, Uttar Pradesh, Punjab, Gujarat, Madhya
Pradesh and Haryana.
At present, a satellite-based crop estimation technique is used extensively for sugarcane by
the Indian Sugar Mills Association. Officials said the Mustard Research and Promotion
Consortium (MRPC) has been roped in as the nodal agency to manage and collate all the data
generated from satellite sources as well as those from field studies.
“This technology will be based on maps,topo-sheets to identify the control points and other
important agriculture related information of the respective districts,” MRPC officials said.
The department of biotechnology under the ministry of science and environment will provide
the scientific support for the same.
Officials said if the pilot to map crop conditions, production and acreage is successful in
mustard, it will expanded to other crops as well.
47
India annually produces 6-8 million tonnes of mustard seed and ranks third in the world in
production, having a market share of 11 per cent.
“The decision support system for various applications in major oil seeds is still a big
challenge in India and GIS would enable the Indian mustard industry, crop advisory agencies
and various government departments to address this challenge,” Pragya Gupta, senior
scientist and assistant director at MRPC said.
Mustard Seed Production In Million Tonnes
Year Mustard Seed
Production
2009-10 6.6
2010-11 8.17
2011-12 6.6
2012-13 7.82
2013-14* ---
*mustard is a rabi crop and sowing for it begins around January
Source: Department of Agriculture
Bumper groundnut crop predicted in Kharif 2013 (BL 20.10.13)
Satellite-based estimation, scientific yield model aiding predictions
Indian Oilseeds and Produce Export Promotion Council (IOPEPC) has forecasted a bumper
groundnut crop in Kharif 2013.
During their Annual Trade meet held in Hyderabad, IOPEPC, which comes under the
Ministry of Commerce, announced that groundnut production during Kharif 2013 is
estimated to be 49.16 lakh tonnes in five major states of Gujarat, Rajasthan, Andhra Pradesh,
Karnataka and Tamil Nadu which account for close to 90 per cent of total groundnuts
produced in India.
This is higher by 21.03 lakh tonnes as compared to Kharif 2012, when the crop was only
28.12 lakh tonnes in these states, owing to monsoon failure. The final crop estimates will be
released after crop cutting experiment in December 2013.
Groundnut exports during 2013-14 are expected to be about 6 lakh tonnes. Sesame seed
exports this year may be lower because of extensive damage to crop caused by heavy rains
during extended monsoon in major sesame growing areas.
Kishore Tanna, Chairman, IOPEPC, while releasing the figures, in a statement informed that
area and crop estimation till now has been traditionally based on limited field survey and
revenue records, which are susceptible to errors, leading to wrong estimates.
To enable trade to make informed business decisions, IOPEPC has undertaken a project to
correctly assess the crop, using GIS or satellite based crop survey and scientific yield model
based on historic weather data. This provides accurate date.
48
Ajit Chavan, Deputy Secretary, Ministry of Commerce, said export of agriculture produce is
on top of the Government's agenda. As a result of which India's agri exports have risen from
$15 billion during 2009-10 to $37 billion during 2012-13.
He assured Government support to promote agri exports and informed about some of the
major and structural policy changes made in the last three years, which have helped exports.
Sixteen exporters were given awards for excellence in exports of various oilseeds and edible
oils by Ajit Chavan.
Oilseed acreage and production up in Kharif 2013 (ET: 21.10.13)
As per the Ministry of Agriculturethe acreage under oilseeds as on 17th October, 2013
estimated at 194.94 lakh hectares against 177.66 lakh hectares last year, up by 17.28 lakh
hectares.
Kharif Oilseeds Crop is estimated at 169.05 lakh tons for the year 2013-14 against last year's
151.83 lakh tons. Overall oilseeds yield has increased to 867 kgs/ha during current kharif
crop from 855 kgs/ha. last year.
Last year's soybean crop revised downward to 107.00 lakh tons from 113.40 lakh tons. In the
current year, inspite of sizable increase in area under soybean, the crop is lower than last year
due to extensive damage both in term of quality and quantity due to heavy rain fall during
end September also early October at the time of harvesting.
Cottonseed bales production is estimated at 360 lakh compared to 330 lakh bales during
2012-13. Cottonseed production is estimated at 111.60 lakh tons against 102.30 lakh tons last
year and Cottonseed Oil production would be 12.20 lakh tons compared to 11.13 lakh tons
last year.
Rice Bran Oil production estimated at 930,000 tons during 2013-14 compared to 900,000 ton
during 2012-13. Local Palm Oil production is estimated at 110,000 tons for the current year
against last year 80,000 tons.
Maize oil production is increasing in the country hence shown separately from minor oils and
estimated at 50,000 tons for the current year.. The Vegetable Oil available from kharif
oilseeds crop and the secondary sources are estimated at 58.03 lakh tons compared to last
year's 52.65 lakh tons i.e up by 5.38 lakh tons.
Allow groundnut oil, rice bran oil exports, industry urges Govt (BL: 23.10.13)
The Solvent Extractors Association of India has urged the Government to allow bulk exports
of groundnut oil and rice bran oil, a move that could help fetch better returns to farmers on
impending bumper kharif harvest.
“We have met officials in the Food and Commerce Ministry and urged them to allow exports
and do away with the minimum export price (MEP),” said B.V. Mehta, Executive Director,
SEAI.
49
Currently, the MEP on edible oils, after the recent reduction of $100 a tonne, is $1,400.
Mehta said the international prices are currently ruling at around $1,000 a tonne and the high
MEP does not make any sense.
Currently, edible oils in consumer packs of up to 5 kg is allowed for exports and total
shipments in such packs are estimated at around 10,000 tonnes.
“The Government wants foreign exchange and there is a demand for bulk oil exports,
especially groundnut oil from countries such as China, the US and Indonesia,” Mehta said.
The Government should look at allowing the shipments to encash the potential by imposing
some quantitative ceiling, Mehta said.
The Government had banned exports of edible oils in bulk in 2008 as prices soared. It also
imposed a MEP to discourage shipments.
Mehta said that allowing exports of groundnut oil would also help farmers get better
realisation this year as the kharif groundnut crops size has been pegged at 47-48 lakh tonnes
against last year’s 26 lakh tonnes.
Timely and excess monsoon rains this year had helped farmers plant more groundnut
especially in Gujarat, where the crop size is projected to be 26 lakh tonnes against last year’s
6.9 lakh tonnes.
Further, demand for rice bran oil also exists from countries such as Thailand and Japan, he
said. India, which has developed and perfected a technique for the physical refining of rice
bran oil, is the largest producer and the current production is estimated at nine lakh tonnes a
year.
India is the largest importer of edible oils and total consumption is estimated at 17.5 million
tonnes growing annually at five per cent.
Edible oil firms want higher domestic oilseed production (BS: 24.10.13)
Edible oil import bill has multiplied over the years owing to sharp increase in consumption
Oilseed production in India is too small to keep pace with the rising domestic demand for
refined oils, according to edible oil companies. The firms have asked the government to take
appropriate steps to increase domestic production of oilseeds.
“We want the government to take measures for boosting oilseed production through high
yield varieties and making such crops lucrative for farmers,” Dalda business head Dinesh
Agarwal told Business Standard here. Dalda is the largest selling refined oil brand in India
having a market share of over 25 per cent. India is a top importer of edible oils in the world.
Edible oil import bill has multiplied over the years owing to a sharp increase in consumption
and muted domestic oilseed production, resulting in flight of precious foreign exchange from
the country.
“There is an urgent need for ramping up domestic oilseed production by educating farmers
and convincing them to adopt modern farming tools for higher yield,” Agarwal noted.
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The composite refined oil market in India is pegged at 18 million tonnes annually and
growing by five to six per cent. It includes 1.6 million tonnes of refined oil market in
consumer pack.
“Almost 40 per cent of the domestic market is dominated by unorganised players, but the
organised space is slowly getting bigger,” said Agarwal.
The per capita refined oil consumption is low in India at 14 kg compared to 23 kg in
developed countries. The figure is 47 kg in the US.
Dalda was acquired by Bunge India Private Limited in 2003 from Unilever. Bunge India is a
wholly-owned subsidiary of Bunge Limited, a global agribusiness and food major operating
in 40 countries.
Meanwhile, Dalda unveiled its new range of vitamin-enriched cooking oil range in the Uttar
Pradesh (UP) market. The company sources almost 12 per cent of its mustard oilseed
requirements from UP.
51
MILK
Milk prices on the boil as farmers feel inflation heat (BS: 14.10.13)
Amul, Gowardhan raise prices by Rs 2 a litre; others might wait for some time.
Milk prices are set to soar yet again, with milk sellers led by the Gujarat Cooperative Milk
Marketing Federation (GCMMF) resorting to a price hike. Increase in input costs, including
cattle feed prices, dry & green fodder prices, cost of diesel and other inputs has prompted at
least two leading milk sellers to hike milk prices by five per cent.
GCMMF, which sells the ‘Amul’ brand of milk, has decided to raise the price of all Amul
milk variants by Rs 2 a litre in the Delhi and Mumbai markets, with effect from October 15.
Joining Amul is a Mumbai-based private dairy, Parag Milk Foods, owner of the Gowardhan
brand of cow milk, which has implemented a similar raise in prices.
“This year, an extended monsoon has led to the scarcity of dry fodder and therefore, fodder
prices have overall increased by about 30 per cent. Further, there has been an increase of 15
per cent in the price of cattle feed since September 2012,” said R S Sodhi, managing director,
GCMMF.
“Price rise was imminent, as overall costs, including food inflation, fuel, labour cost and
fodder put pressure on farmers. Current food inflation surged to 18 per cent and cattle feed
prices increased 15 per cent. But Amul milk prices have increased by only 10 per cent with
the latest raise,” Sodhi said.
Following the price rise, Amul Gold (full cream) milk will cost Rs 44 a litre, compared to the
current price of Rs 42, while Amul Taaza (toned milk) will cost Rs 34 a litre, up from the
current Rs 32. The new price of Amul Slim and Trim double toned milk will be Rs 30 a litre,
compared to the existing price of Rs 28.
The increase will be effective from October 15 in New Delhi and Mumbai, which will be
followed by a similar raise in other cities within a week. However, in Gujarat, the price rise
will be made effective only by the month-end, GCMMF officials said.
With an average daily milk
procurement of over 11.5 million
litres per day (lpd), Amul sells 3.5
million litres of milk daily in the
Delhi and Mumbai markets.
Besides the Gujarat, Mumbai and
Delhi markets, Amul also
supplies milk to Kolkata, Kanpur,
Lucknow and Nagpur, among
others.
Dairy experts noted that even after the price hike, milk was under-priced in the country.
“Most of the private dairies in north India pay Rs 38 a litre to farmers, while Amul pays
52
around Rs 35. And we sell at around Rs 42 a litre. Even after a price hike of Rs 2 a litre,
dairies will make a loss of Rs 2-4 per litre,” said a dairy source from Dholpur in Rajasthan.
Parag Milk Foods has also raised milk prices by Rs 2 per litre. “The prices have been
increased from Dussehra in the Mumbai market,” said Devendra Shah, promoter and
chairman of Parag Milk Foods.
“We are not revising milk prices in the immediate future. Milk price rise depends on local
areas and market conditions,” said R G Chandramogan, chairman and managing director
of Hatsun AgroProduct, a leading South India-based private dairy.
He, however, admitted that there is definitely pressure on dairies to hike milk prices due to a
host of reasons including rise in inflation as well as diesel and fodder prices. “Although we
are not increasing prices immediately, we may assess the situation after two to three months,”
Chandramogan added.
Milk prices on the boil as fuel, feed costs increase (BL: 14.10.13)
Milk prices across the country are set to rise ahead of the festival season, posing further
problems to customers already reeling under surging prices of tomatoes and onions.
Market leader Gujarat Co-operative Milk Marketing Federation (GCMMF), which owns the
Amul brand, has increased prices of pouched milk by 5-7 per cent. This will come into effect
from Tuesday.
This is the second time that Amul has increased prices this year, after the one in April. Other
players such as Mother Dairy, Hatsun, SMC Foods and Sterling Nova are expected to follow
suit.
In fact, Karnataka Milk Federation, which owns the Nandini brand, had raised prices in
September by Rs 2 a litre.
Defending the latest price increase, R.S. Sodhi, Managing Director, GCMMF, said: “Our
price hike is lower than the general food inflation in the country.” Sodhi blamed rising
production and logistics costs on account of increase in fuel prices and fodder prices.
The extended monsoon has hit the availability of both dry and green fodder raising the costs
by 20 per cent, he said.
Before increasing milk prices, Amul had hiked prices of products such as butter, paneer and
cheese among others by an average of 10 per cent in the past one-to-two months.
Admitting that there was pressure from milk producers to increase prices, Sodhi said unless
the farmers were paid properly, they could move away from dairying.
Amul, Sodhi said, pays about 80 per cent of the product price to farmers.
Food inflation for September ruled high at 18.4 per cent on higher onion and cereal prices. In
fact, milk prices have risen by some 62 per cent since October 2009.
53
In the same period, prices of onion have increased 1.5 times, while tomato rates have
doubled. Edible oil, mainly sunflower, has kept pace with rising milk prices. “There is a cost
pressure build-up,” said R. Chandramogan, Chairman and Managing Director of Hatsun Agro
Products, citing logistics and processing costs.
“It is a matter of time before we increase the price, but we have not decided on the quantum
so far,” he said.
“We are keeping a close watch on the procurement prices as well as raw material prices and
input costs that affect the farmers. We will review our consumer prices of milk if required,”
Mother Dairy said in a statement.
Sandeep Agarwal, Director of SMC Foods Ltd, which sells pouched milk under the
Madhusudhan brand in Delhi and the National Capital Region, said that the hike was overdue
as excess stocks of skimmed milk powder (SMP) had kept a lid on prices over the last 1-1.5
years. “The backlog had to be cleared and the latest round of hike will take care of prices till
March,” Agarwal said, adding that his company was in discussion with its peers on increasing
prices.
SMP exports since June last year, when the Government allowed shipments, are estimated at
around 1.3 lakh tonnes.
A weak rupee in the recent past had made the Indian SMP exports attractive and the monthly
shipments are estimated at 7,000-8,000 tonnes. “Shipments are almost negligible now and we
are honouring the earlier commitments,” Sodhi said.
SMP exports are unlikely to have an impact on the domestic availability of milk as the flush
or peak milk producing season will start soon.
India is the largest milk producer and the milk output stood at 133 million tonnes last year.
SMP exports accounted for less than half per cent of the milk produced in the country.
An estimated one million tonnes of milk are required to produce about 1.5 lakh tonnes of
SMP.
India likely to produce record 140.6 mn tonnes milk in 2014: Report (ET: 22.10.13)
Milk output is likely to expand by 4.5 per cent to reach a record 140.6 million tonnes in 2014
calendar year on a normal monsoon, increased demand for dairy products and rising
consumer income, says a USDA report.
Milk production in India, the world's largest producer and consumer, is estimated to have
declined marginally to 134.5 million tonnes in the current year, it added.
"Strong farm-gate prices and rising demand for value-added products are stimulating
increased milk production. Growing private investment in dairy processing facilities is
providing further impetus," the US Department of Agriculture (USDA) said in its latest
report.
Milk production is forecast to be at a record 140.6 million tonnes in 2014 calendar year,
54
while production of Non Fat Dry Milk (NFDM) is likely to increase by 19,000 tonnes to
4,89,000 tonnes in the same period, it said.
The USDA estimated production of combined butter and ghee (clarified butter) to increase
approximately by 3 per cent to 4.88 million tonnes in 2014, as against 4.74 million tonnes
this year.
India's milk consumption is set to match with its production level in 2014, while domestic
consumption of NFDM is pegged at 4,25,000 tonnes assuming increased exports and little
imports this year, the report said.
Quoting industry estimates, the USDA report said the Indian dairy consumption market has
grown at an annual rate of 6.8 per cent over the last decade.
"The major factors driving growth in milk consumption are increased demand due to
population growth, greater affordability due to increased disposable incomes, increasing
awareness and availability of dairy through retail and food service segments and increased
consumer interest in high protein diets," the report said.
Of the milk produced, 40 per cent is used or consumed on-farm, and 60 per cent is sold.
Industry sources report that of milk sold 70 per cent goes through the unorganised sector, and
only 30 per cent via the organised sector, it added.
Mother Dairy hikes milk prices in Delhi-NCR by Rs 2 per litre (FE: 22.10.13)
Price of full cream milk has gone up from Rs 42 to Rs 44.
Mother Dairy, the largest milk supplier in the Delhi-NCR region, has increased milk prices
by Rs 2 per litre with effect from Wednesday due to rise in input cost.
The price of full cream milk has been raised to Rs 44 per litre from Rs 42 a litre, while that of
toned milk to Rs 34 per litre from Rs 32 per litre.
The double-toned milk will now be available at Rs 30 per litre against the existing Rs 28 per
litre and token (loose) milk will cost Rs 32 a litre from tomorrow from Rs 30.
In a statement, Mother Dairy said it is "compelled to take a hike in its milk prices for all its
variants".
The company said that the rise in input costs has forced it to raise the consumer prices to
ensure remunerative prices to farmers and sustained availability of milk.
"Cattle feed and fodder contributes the bulk (almost 75 per cent) of the total cost of
production of milk. Significant increase in the cattle feed & fodder and labour has led to the
rise in overall cost of production," it explained.
Mother Dairy noted that close to 80 per cent of the total sale proceeds goes into the
procurement of milk. "With this the Company ensures sustainability of dairy farming by milk
producers. This is probably one of the most efficient means of ensuring inclusive growth".
Increase in milk prices could have an impact on food as well as overall WPI inflation, which
stood at 6.46 per cent and 18.40 per cent, respectively.
55
Mother Dairy sells about 30 lakh litres milk per day (both loose and poly-pack) in Delhi-
NCR.
Besides Delhi-NCR, Mother Dairy is increasing the prices in cities like Mumbai, Lucknow,
Kanpur, Pune and other places where its milk is sold. The company, however, did not gave
the details.
56
57
VEGETABLES- POTATO/ ONIONS
Higher output of Kharif crops to end onion prices from December (ET: 26.09.13)
Onion prices, which have set new records this year, may come crashing from December
onward. Kharif and late kharif crops are expected to yield a big harvest with farmers
increasing the acreage by about 15-20 per cent.
When prices started appreciating from July, farmers increased the acreage significantly.
"Area under kharif and late kharif onion is likely to increase by 15-20 per cent. But prices
may come down significantly in December and January," said RP Gupta, director, National
Horticulture Research and Development Foundation.
Ajit Shah, president, Onion Exporters Association, said, "Production of the kharif and the late
kharif crops is much higher than the previous year."
The kharif onion is harvested from October while the late kharif crop comes to market from
December to February. If production goes up, prices will crash because the crops have no
shelf life.
Even though most of the rabi crop is stored by farmers, the downtrend in onion prices may
continue till March-April when the rabi crop is harvested. Onion seed sales also confirm the
expected increase in acreage.
A majority of onion farmers saves seeds from their own produce for the next crop. Bejo
Sheetal, the seed company that dominates the hybrid onion seed market in the country, felt a
shortage of about 20-25 per cent. "We could not meet the demand in Maharashtra. We are
likely to fall short of seed supply in Tamil Nadu, Uttar Pradesh and Rajasthan, where sowing
will take place in the next few months," said Sameer Agarwal, managing director, Bejo
Sheetal.
The company's sales grew by 30-40 per cent over 2011-12. Sales had dropped last year by
about 25 per cent due to drought in key onion growing states. Though tomato price
fluctuations are not as high as that in onion, farmers have increased area under tomatoes too.
"Tomato prices this year are almost double than the previous year. Tomato area will go up in
Sonipat, Panipat and Karnal," said Kawal Singh, head of the Haryana chapter of Vegetable
Growers' Association of India. "Tomato area will be slightly higher this year. Tomato prices
are higher now. But fields are not vacant and alternative crops like cauliflower, okra and
beans are available to farmers. These vegetables are harvested in shorter periods and have
good rates," said the head of vegetable seeds division of an MNC.
New approach needed to address seasonal hike in onion prices (ET: 29.09.13)
A new approach is needed to address seasonal spike in onion prices as farmers have started
storing the winter grown crop and marketing it later in the lean period of August-October for
better returns,Consumer Affairs Secretary Pankaj Agrawal.
58
"Firstly, everyone has to understand that rabi (winter) onion is a commodity that is being
marketed. Stored onion is a good product to be released slowly in the market during the lean
period of August-October," he said, adding that a new approach needs to be adopted to
address the seasonal spike.
Since much of onions are stored in Maharashtra, this state sets the price trend for others
including Delhi, he said. Even Madhya Pradesh traders, who also supply onions to the
national capital, take price cues from Lasalgoan in Maharashtra, he added.
Agrawal said retail prices of onions in the southern region are softening due to arrival of early
summer crop from Karnataka and Andhra Pradesh.
Prices, however, remain high at Rs 66-75 per kg in Delhi and other parts of north India as the
south crop is costlier in terms of transportation and demand is being met through stored crop,
he added.
"There is about 4 per cent fall in onion production. But supplies in the country were down by
34 per cent in August and 39 per cent so far in September. The percentage fall in output does
not match with the percentage of shortages. Do they correspond? It means someone is
hoarding," Agrawal said.
"Farmers, especially in Maharashtra, are holding back onions as the government is
encouraging them to create storage capacity for the crop. Farmers are getting good price this
year, he said, adding that dehoarding onions from their godowns is not the solution to address
the price rise issue.
If farmers store, you cannot dehoard. If we dehoard, it will be for the first time that Indian
farmers will be arrested for hoarding, he said.
"Would you like to do that? Do you want to impose Inspector Raj on farmers? That is not the
way we want to work. There are certain challenges," Agrawal said.
Of 27 lakh tonnes of onions stored across the country, Maharashtra -- the largest onion
producing state -- has stored 15 lakh tonnes. It has sold most of the stored onions and
currently has about 2 lakh tonnes, Agrawal said.
Agrawal said the government has the option of declaring onion as an essential item and take
action on hoarding. "Before taking such a step one needs to understand that 17-18 million
tonnes of onions are not produced in one season and then hoarded."
About 60 per cent of produce arrive in April-May, the rest 20 per cent each in September and
November, he added.
Onion exports fall by 87% in Sept on govt curbs (ET: 11.10.13)
Onion exports fell sharply by 87 per cent to below 20,000 tonne in September on government
restrictions.
59
Exports were at 1,50,833 tonne in the year-ago period. In the last few months, the
government has taken several measures to control onion prices in the domestic retail market
but they continue to be in the range of Rs 60-70 a kg.
It had also raised the minimum export price (MEP) of onions to $ 900 per tonne from $ 650
per tonne to curb outbound shipments. MEPis a benchmark price below which onion cannot
be exported.
"Exports declined in a significant way in the last two months due to MEP. We exported
29,247 tonne in August and it has further come down to 19,218 tonne in September this
year," a senior government official told PTI.
Despite lower quantity of shipments, the country earned Rs 108.96 crore last month as export
realisation remained significantly higher at Rs 56,700/tonne as compared to Rs 11,304/tonne
in the year-ago period, he said.
In September 2012, India exported 1,50,833 tonne but earned only 170.51 crore.
In the first six months of the current fiscal, onion exports fell to 7,16,246 tonne from
10,01,467 tonne in the same period last year.
Even as export volumes are coming down, onion prices in the domestic market continue to
rule at unaffordable levels of Rs 60-70 per kg in most retail markets.
Domestic supply is being improved through imports as well. But the significant impact on
prices are expected to be seen with the arrival of new crop from Maharashtra and other
growing states from end of this month.
Potato, onion, tomato prices skyrocket ahead of Diwali (BL: 22.10.13)
It’s not just onions; potatoes and tomatoes are also leaving the common man in tears. Prices
of the three most common vegetables have hit record highs ahead of Diwali.
Potato, onion and tomato are 40-50 per cent costlier today than at the same time last year,
says Pradipto Sahoo, Head of the Fruit and Vegetable Business at Mother Dairy.
Trade sources attribute the rise to the disruption in supplies due to the extended monsoon and
the recent rain from Cyclone Phailin affecting the harvest. However, consumers blame
hoarding and profiteering for the high prices.
Since early October, the average price of potato has risen by about 30 per cent to Rs 25-30 a
kg in Delhi at the retail level. In Bangalore, where potato arrivals are higher than in other
markets, the average wholesale price has moved up 30 per cent in the past three weeks.
In Agra, the other large market for potato, the average wholesale price has risen by over 12
per cent during the period, while in Kolkata, the increase has been about 25 per cent.
Tomato prices have risen by more than 25 per cent to currently retail at Rs 35-40 a kg in
Delhi.
60
Onion prices have stabilised at the wholesale level, at Rs 50-60 a kg, but continue to rule high
at Rs 70-100 a kg at retail outlets in Delhi, with traders taking advantage of the supply
situation. The rise in onion prices since July has fuelled food inflation, which touched 18.4
per cent in September. The price rise has affected sales of potato, onion and tomato, the
vegetables most consumed by the common man. “Our sales are down 10-20 per cent year-on-
year by volume, while the value has gone up by 30-40 per cent,” said Sahoo.
Rajinder Sharma, Chairman of Azadpur Mandi in Delhi, attributed the increase in prices of
potato and onion to the extended monsoon and the rain accompanying Cyclone Phailin
affecting the harvest. With rains ending in the North, supplies should improve post-Diwali,
bringing down prices, he added.
Though the Government has been planning to import onions to boost supplies, Sharma said
there were no takers for the imported varieties as they were found to be less tasty.
Onion arrival at Lasalgaon APMC shrinks, new production hit (BL: 22.10.13)
With production of new onions taking a hit due to rains and rates of the old variety of the
bulb continuing at a record high, the common man may have to endure the double whammy
as there’s no respite in sight ahead of Diwali.
While only 510 quintals of old onions arrived onWednesday in the country’s largest
Lasalgaon agricultural market produce committee (APMC) in the district, the arrival of the
new red onions stood at 1950 quintals, sources said, adding the delayed Kharif crop is
expected only by January 2014.
With the supply shrinking at major APMCs at Lasalgaon, Pimpalgaon (Baswant) and Yeola
APMCs, the old onion was auctioned at Rs 5972 per quintal at Lasalgaon and the new bulb at
Rs 4400-4500 per quintal.
Sources said the arrival of new onions was affected due to rains during just-concluded
Navratri festival, and this has sent the retail rate of the old variety of bulb at Rs 70-80 per kg.
In Pimpalgaon APMC, onions (old variety) were sold at Rs 6200 and in Yeola APMC at Rs
5852 a quintal.
Prolonged monsoon pushes potato prices up 25% (BL 20.10.13)
Prolonged monsoon leading to delay in sowing of early tuber varieties by 15-20 days, in
major potato-growing States, have come as a boon to farmers in West Bengal.
According to Patit Paban De, Member of the West Bengal Cold Storage Association, farm-
end price (net of storage expenses) of potatoes has moved up 25 per cent to Rs 600-650 a
quintal on Friday, from Rs 460-480 in the first week of October.
As in mid-September farmers were earning Rs 440-460 a quintal against a production (and
storage) cost of nearly Rs 500 a quintal, owing to excess stock arising out of over production.
61
West Bengal reported 12 per cent rise in potato production to nearly 98 lakh tonnes last
season. The early variety hits the market in December-January. Major production (primarily
Jyoti) comes in March.
Nearly 40 per cent of State’s production is used in meeting majority of demands of eight
North Eastern States, Odisha, Andhra Pradesh, Jharkhand and Bihar. The State also imports
limited quantities of early tuber from Punjab and UP.
Though he doesn’t rule out possibilities of prices coming down to some extent, De is hopeful
that overall prices will remain firm for the rest of the season ending in December.
Trend reversal
The price movement was unexpected. As in September, De was pessimistic of upward
movement in prices. Over 400 cold storages in Bengal, the second largest potato-growing
State, had nearly 1.5 lakh tonnes excess stock compared with last year. The situation was
reportedly even worse in UP, the biggest producer.
“Potato farmers should end up in heavy losses this year,” he told Business Line on September
13.
The scenario improved slightly in the first week of October, as prices moved up Rs 20 a
quintal, as traders were stockpiling to meet demands during the 10-day-long Puja holidays.
But, De was still not convinced of any major price rise potential.
But, the entire outlook changed this week. To start with, cold storages report reduction in
stock to last year’s level. De attributes this (release of 1.5 lakh tonnes additional stock) to
distress sale by farmers before the Puja. Meanwhile, news started pouring in — not merely
from Bengal, but also from UP and Punjab — about delay in sowing of early varieties
fuelling expectation of a demand gap.
Demand gap
Considering, 8 lakh tonnes of monthly trade of
potatoes in Bengal (to meet own consumption and
of other States), sowing may result approximately
4-5 lakh tonnes additional demand for stored tuber.
De, who is more concerned about farmers, argues
that the gap is too high when measured against 24-
25 lakh tonnes of stock in cold storages, which are
scheduled to go on annual maintenance closure in
January.
The indication is, a section of farmers, who could
hold on to stock till now, may expect to end the
year in profit.
62
Respite likely on onion prices next week (BS 23.10.13)
Increased harvesting expected to boost supply
Onion prices are likely to begin falling in a week, with an expected increase in supply on
intensified harvesting, halted for two weeks due to extended rain.
Despite intermittent declines in the wholesale markets, consumers have continued to pay
highly for onions over an unusually sustained period of a little over two months.
Data compiled by the Ministry of Consumer Affairs show a huge difference between
wholesale and retail prices. At the wholesale market at Vashi,
Navi Mumbai, prices were Rs 48-52 a kg two months earlier and
had fallen to Rs 36 a kg earlier this month; retail consumers
continued to pay Rs 65–70 a kg throughout. In Delhi, the price
was Rs 48.75 a kg in the wholesale market on Tuesday and Rs 69
a kg in retailing.
“The price difference between the wholesale and retail markets
should be Rs 5-7 a kg; Rs 10 a kg at the most. Such a massive
difference and for such a sustained period is unusual,” said R P
Gupta, director, National Horticultural Research and
Development Foundation (NHRDF). He said prices had moved
up again after a decline due to disruption in harvesting of the
kharif crop. Extended rainfall left too much mud in the field.
Govt mulls ban on onion exports, calls meeting of producer states (BS 23.10.13)
After a brief lull, onion prices are again on the boil, touching a high of about Rs 80 a kg in
the national capital and other parts of the country.
The government is again attributing the rise to hoarding by farmers and traders and transport
disruptions due to unseasonal rains. To control prices, it is considering a ban on exports. It
has also planned a meeting of senior officials from all onion-growing states later this month.
But despite all efforts, onion is perhaps the only commodity that sees such price fluctuations.
And, this might continue in the near future.
So far this year, the monthly average retail prices of onions have fluctuated between Rs 19 a
kg and Rs 55 a kg. In 2012, it had touched a year's high of Rs 23 a kg, before falling to Rs
12.5 a kg. In 2011, prices moved between Rs 11 a kg and Rs 50 a kg.
ALL IN A DAY
Onion prices soared to around Rs 90 a kg in
most parts of the country, on low supplies
Government resists banning exports,
commerce minister; directs Nafed and other
agencies to urgently import onions from
Egypt, China and Pakistan
Food minister may meet officials from major
63
onion-producing states on October 25
Directs states to take stern action against
hoarders
Food Minister K V Thomas calls Agriculture
Minister Sharad Pawar to discuss onion crisis;
says cartelisation in onions should stop
Thomas to again meet Pawar on Thursday to
discuss the crisis
Government expresses hope prices will ease
in next few weeks
Therefore, the spike in retail prices of onions, preceded by a decline in rates, isn't new; onion
prices have been volatile for some time. However, what has changed since 2009 is the extent
of the fluctuation. Data sourced from the department of consumer affairs show in Delhi and
Lucknow, prices have risen or fallen Rs 20-30 a kg in retail markets within just a few weeks.
What makes them fluctuate so widely?
For one, the demand for onions is one of the most inelastic. In other words, unlike cabbage,
brinjal, or even potato to an extent, the onion doesn't have a substitute. Therefore, even a
small change or disruption in supply leads to a sharp rise in retail onion prices.
"There is no switch factor for the onion; either you have it, or you don't. This makes its
demand absolutely inelastic," Ashok Gulati, chairman of the Commission for Agricultural
Costs and Pricestold Business Standard.
Citing an example, he said though the prices of cauliflowers were ruling at Rs 80-100 a kg in
retail markets, there was no hue and cry about it, as this vegetable could be supplemented.
The onion is also one of the most globally aligned commodities among all vegetables
produced in India---about 10 per cent of the country's annual produce is exported.
Ramesh Chand, director of National Centre for Agriculture Economics and Policy Research,
says, perhaps, onion is the only crop produced four times a year; therefore, there are no
extended periods of glut or shortage. "Onion prices do not rise for long; neither do these fall
sharply for a long time, as there is no single bulk-producing season, which makes it volatile,
unlike other crops except, perhaps, the potato," he said.
In Maharashtra and some parts of Gujarat, the onion is harvested four times a year - in
August-September, October-December, January-March and finally, April-May. In Karnataka
and Andhra Pradesh, the crop is harvested in July-September, October-November and March-
April.
So, the crop is practically grown in the early-kharif, kharif, late-kharif and rabi seasons.
This peculiar characteristic is exploited to the hilt by all in the entire onion value chain---
farmers, wholesalers and even the neighborhood hawker.
The situation becomes acute whenever there is 'expectation of scarcity', as seen earlier this
month. Now, one is seeing the same situation again - a sudden disruption in supplies to
Lasalgaon in Maharashtra (India's biggest and possibly the only wholesale market for onion)
encouraged everyone in the value chain to exploit market conditions.
64
Imperfect markets About 80 per cent of the country's onion prices are determined by 10-15 major traders
controlling 15-20 major markets in Maharashtra's Nashik-Lasalgaon belt. It is they who
determine when to stop supplies and when to release stocks. R P Gupta, director of Nashik-
based National Horticulture Research and Development, says since 2004, when the onion was
removed from the list of essential commodities, there has virtually been no control on onion
trade.
He said this year too, there was no shortage of onions; it was a slight disruption in supplies
that had been exploited to the hilt by a small group of traders, and this had raised prices in
retail markets in Delhi to about Rs 80 a kg.
"In 2012-13, India's onion production was 16.3 million tonnes (mt), while the demand was
expected at 12 mt - 4.3 mt were surplus. Assuming India exports two mt of onion this year,
there should still be 2.3 mt of surplus onions in the country.
"The question is where have these onions gone?" asks Gupta.
On the nature of cartelisation in onion trade, a senior officer said because of good rains in the
primary onion-growing belt of Maharashtra and Karnataka, all stakeholders in the value chain
expected prices to soften from mid-September.
To cash in on the limited window of opportunity, as the last crop came in late, traders started
squeezing onion supplies from June, which resulted in a massive price spiral around mid-
August and mid-September and, subsequently, from October 18. A sudden burst of rains in
the main growing belts around early October, which disrupted supplies, proved beneficial for
the cartels.
"Otherwise, how would someone explain an almost Rs 13/kg fall in wholesale prices of
onions in Lasalgaon in just one day - between September 19-20? Surely, this is not
production-driven," the official said, adding the entire onion value chain was driven by a few
traders and wholesalers.
Perhaps, onion is the only commodity that doesn't lose market value after storage. In other
words, even if the crop is stored for seven-10 days, it does not lose value and isn't damaged;
therefore, there is greater tendency to hoard.
The road ahead As a commodity, onions would continue to remain a pain, unless proper policies to stock and
import are framed. Gulati says, "In the short and medium term, we must have a buffer
stocking policy for onions." In other words, every year, some amount of onions could be kept
in major consuming centres as stocks; whenever supply is short, it can be augmented
immediately.
Another option is a different trade policy - importing onions in big quantities in a short time
so that demand is met.
65
The question is who will bell the cat?
In the long term, India should have a strong vegetable processing sector, one that enables
conversion of fresh vegetables into processed items for use during a shortage. "As with
tomatoes in some countries, the case should be the same for onions in India," Gulati says.
Chand advocates building good storage facilities across the country.
Till then, onion prices would continue to haunt all---farmers (when prices crash) and
consumers (when prices rise) alike.
"This is not the first time we have experienced price volatility in onions and surely, it
wouldn't be the last," sums up Gulati.
Government relaxes norms for onion imports (ET: 23.10.13)
Amid skyrocketing onion prices, the government today relaxed norms for import of onion by
allowing fumigation of the kitchen staple in India without imposing any penalty.
Fumigation is a technique used for pest control by suffocate or poisoning the pests
within. The government has relaxed the the conditions for import of onions till November 30
this year, according to an official statement.
The consignments of imported onion which arrive in Indian port without fumigation and
endorsement to that effect on the Phytosanitary Certificate (PSC) would be fumigated here by
the importer through an accredited treatment provider.
"Such consignments of onion for consumption will not be subjected to the four times penal
fees on account of non compliance of conditions of import," the statement added.
The consignment would be inspected thoroughly by quarantine officials and released only if
found free from pests and diseases of concern to India.
However earlier in the day, co-operative major National Agricultural Cooperative Marketing
Federation of India ( NAFED) has floated tender to import the onions from Pakistan, Iran,
China and Egypt, after kitchen staple prices touched all-time high of Rs 90 per kg.
Monopoly of wholesale trade causing onion price hike: Agriculture Ministry (ET:
23.10.13)
The price spike in onions upto Rs 90 a kg in the national capital is due to "monopoly" of
wholesale traders in the absence of amendment to the APMC Act, a senior Agriculture
Ministry official said today.
Supplies in northern region have been hit as unseasonal rains in producing belts have delayed
harvesting of kharif crop, but the overall output is estimated to be higher, he said, adding that
there could be a "glut' situation" in the coming days and prices may fall sharply.
Onion crisis has continued for the last three months with retail prices having shot up again to
Rs 80-90 per kg in Delhi and other major cities due to supply crunch.
66
"Onion crisis would not have blown out of proportion had Delhi and some other states
amended the Agriculture Produce Marketing Committee (APMC) Act by now," said Sanjeev
Chopra, Joint Secretary in the Agriculture Ministry.
The Delhi government has not amended the APMC Act and as a result there is a "monopoly
of wholesale traders", he noted.
Chopra said that there are about 1,500 wholesale traders in the national capital dealing in
various agri-commodities.
"We have fixed number of wholesale traders against an infinite number of suppliers and
consumers. The amendment to the APMC Act could have encouraged more players and
competition," he told PTI.
He further said that when prices are set at an higher level in the wholesale mandis, retailers
further sell at a much higher rate. "However in the recent period, retailers too are keeping a
huge margin and this is hurting consumers."
For instance, wholesale price of onions in Delhi are ruling in the range of Rs 48-51 per kg in
last two days, while retail prices have gone upto Rs 90/kg, he said and emphasised the need
to amend the APMC Act to address this price difference between wholesale and retail price.
Agriculture marketing is a state subject. The Centre had finalised a model APMC bill and
circulated to various States and UTs in 2003 for implementation to reform agri-marketing
system. So far, 16 states have amended their Acts based on the model provided by the
Centre.
The model Bill includes provisions for direct marketing and purchase of agriculture produce
from farmers, contract farming and setting up of markets in private and cooperative sectors,
among other things.
NAFED floats tender to import Onions amid high domestic prices (ET: 23.10.13)
After Onions touched an all time high of Rs 90 per kg, co-operative major NAFED today
floated tender for import of the bulb from Pakistan, Iran, China and Egypt.
National Agricultural Cooperative Marketing Federation of India (NAFED) has floated
tender after kitchen staple prices touched Rs 90 even though wholesale rates were much less
at Rs 50-60 a kg. The previous record high of retail prices was in 2010 when it touched Rs 85
per kg.
"NAFED is interested in importing onions of Pakistan, Iran, China and Egypt origin to be
delivered at NAFED warehouse at Lawrence Road, New Delhi," the co-operative major said
in the tender.
According to a senior official of NAFED, onions from Pakistan, Iran and China would cost
around USD 200-USD 250 per tonne, while those from Egypt is likely at USD 350 per tonne.
67
Whereas India has fixed minimum export price of Onions at USD 900 per tonne to deter
outbound shipments.
In the tender, NAFED has sought "fresh quality big onions, Red/Pink in colour, size above
45mm, with white flesh, well dried, free from mechanically damaged, bulbs double, semi-
matured, sprouted, soft, mushy, wet bulbs and completely free from fungus infestation and
insect mould attack."
It also said a crop certificate issued by the competent authority stating that the onion crop is
of new crop of 2013, is required.
On September 2 also NAFED had floated a tender for import of Onions.
However, NAFED reserves the right to accept or reject any or all offer in part or full without
assigning any reason thereof, says the tender.
Meanwhile, concerned over price spike, the Centre asked states to take firm action against
hoarders to boost domestic supplies as prices have been high for the last three months.
After discussing the issue with Agriculture Minister Sharad Pawar, Food Minister K V
Thomas had said there is no plan to ban exports.
A senior government official, however, said that the Centre is also considering banning
overseas shipments.
Panic grips Union government as onion price hits Rs 100 a kg (ET: 23.10.13)
Congress govt in Delhi, which rode onion anger to power in 1998, was more precise as it
shifted the blame on hoarders in BJP-ruled Madhya Pradesh.
With onion prices continuing to be on fire in the run-up to crucial state polls, an embattled
government scrambled to stem the surge but appeared to lack a coherent plan.
As onion prices, defying the sharp dip in the rates in the country's biggest wholesale market
at Lasalgaon in Nashik, continued to spiral and touched the Rs 100 per kg mark in the city
and elsewhere, panic in the government was obvious. Food minister K V Thomas rushed to
Maharashtra as the Congress-ruled state accounts for 28% of the total onion production and
can help tame prices by cracking down on hoarders.
Commerce minister Anand Sharma blamed hoarders for the spike in onion prices which
political rivals have painted as the UPA government's failure, and worse, insensitivity
towards the poor.
The Congress government in Delhi, which rode the onion anger to power in 1998, was more
precise as it shifted the blame on hoarders in BJP-ruled Madhya Pradesh. Civil supplies
minister Haroon Yusuf alleged that hoarders were keeping supplies from reaching Delhi to
sabotage Congress's prospects in the assembly elections.
68
But beyond the anger, the central government did not seem to have any plan to deal with the
crisis. Banning exports was considered only to be discarded after it was recognized that with
domestic prices ruling high, few would have the incentive to sell abroad. "Banning exports
may sound politically right but it will not be a good decision economically," Thomas told
TOI.
Onion imports from Egypt, Afghanistan and Pakistan were spoken of but going by the
experience a couple of months ago when prices started shooting up, it may not prove to be
beneficial. In the summer, imports from Pakistan were held up because of clearance problems
at the Wagah border.
The crisis appeared to be man-made. On Tuesday, the average wholesale price of the new
crop at Lasalgaon was Rs 3,900 a quintal, 37% cheaper than in the summer. Yet, the drop
was not reflecting in retail prices.
Onion supplies to Delhi increased 10-15%, in the last 24 hours and brought down the price by
Rs 100 quintal at the wholesale level.
But there was no let up in the price at the colony level, with prices touching Rs 100 a kg in
many localities. Intriguingly, there was wide variation even within short distances,
confirming the fear that hoarders could be at work. "This shows there is hoarding or delayed
selling by traders to create artificial crisis," said a government official.
Food minister Thomas said that he planned to meet agriculture minister Sharad Pawar and
Maharashtra CM Prithviraj Chavan to discuss how to ease supplies from the state. This may
not prove to be an easy task, considering not just the defiance that the hoarders have
displayed despite dire warnings of a crackdown by functionaries at all levels.
What may prove to be more problematic is that in many cases, farmers are holding on to their
stocks expecting better prices. Moving against them may be politically prohibitive. Farmers
are far more powerful as a political constituency both because of numbers and the fact that
they don't carry the stigma attached to hoarders.
Govt mulls ban on onion exports, calls meeting of producer
states (BS: 23.10.13)
After a brief lull, onion prices are again on the boil, touching a
high of about Rs 80 a kg in the national capital and other parts
of the country.
The government is again attributing the rise to hoarding by
farmers and traders and transport disruptions due to unseasonal
rains. To control prices, it is considering a ban on exports. It
has also planned a meeting of senior officials from all onion-
growing states later this month.
But despite all efforts, onion is perhaps the only commodity
that sees such price fluctuations. And, this might continue in
the near future.
So far this year, the monthly average retail prices of onions
have fluctuated between Rs 19 a kg and Rs 55 a kg. In 2012, it
69
had touched a year's high of Rs 23 a kg, before falling to Rs 12.5 a kg. In 2011, prices moved
between Rs 11 a kg and Rs 50 a kg.
Therefore, the spike in retail prices of onions, preceded by a decline in rates, isn't new; onion
prices have been volatile for some time. However, what has changed since 2009 is the extent
of the fluctuation. Data sourced from the department of consumer affairs show in Delhi and
Lucknow, prices have risen or fallen Rs 20-30 a kg in retail markets within just a few weeks.
What makes them fluctuate so widely?
For one, the demand for onions is one of the most inelastic. In other words, unlike cabbage,
brinjal, or even potato to an extent, the onion doesn't have a substitute. Therefore, even a
small change or disruption in supply leads to a sharp rise in retail onion prices.
"There is no switch factor for the onion; either you have it, or you don't. This makes its
demand absolutely inelastic," Ashok Gulati, chairman of the Commission for Agricultural
Costs and Pricestold Business Standard.
Citing an example, he said though the prices of cauliflowers were ruling at Rs 80-100 a kg in
retail markets, there was no hue and cry about it, as this vegetable could be supplemented.
The onion is also one of the most globally aligned commodities among all vegetables
produced in India---about 10 per cent of the country's annual produce is exported.
Ramesh Chand, director of National Centre for Agriculture Economics and Policy Research,
says, perhaps, onion is the only crop produced four times a year; therefore, there are no
extended periods of glut or shortage. "Onion prices do not rise for long; neither do these fall
sharply for a long time, as there is no single bulk-producing season, which makes it volatile,
unlike other crops except, perhaps, the potato," he said.
In Maharashtra and some parts of Gujarat, the onion is harvested four times a year - in
August-September, October-December, January-March and finally, April-May. In Karnataka
and Andhra Pradesh, the crop is harvested in July-September, October-November and March-
April. So, the crop is practically grown in the early-kharif, kharif, late-kharif and rabi
seasons.
This peculiar characteristic is exploited to the hilt by all in the entire onion value chain---
farmers, wholesalers and even the neighborhood hawker.
The situation becomes acute whenever there is 'expectation of scarcity', as seen earlier this
month. Now, one is seeing the same situation again - a sudden disruption in supplies to
Lasalgaon in Maharashtra (India's biggest and possibly the only wholesale market for onion)
encouraged everyone in the value chain to exploit market conditions.
Imperfect markets
About 80 per cent of the country's onion prices are determined by 10-15 major traders
controlling 15-20 major markets in Maharashtra's Nashik-Lasalgaon belt. It is they who
determine when to stop supplies and when to release stocks. R P Gupta, director of Nashik-
based National Horticulture Research and Development, says since 2004, when the onion was
removed from the list of essential commodities, there has virtually been no control on onion
70
trade.
He said this year too, there was no shortage of onions; it was a slight disruption in supplies
that had been exploited to the hilt by a small group of traders, and this had raised prices in
retail markets in Delhi to about Rs 80 a kg.
"In 2012-13, India's onion production was 16.3 million tonnes (mt), while the demand was
expected at 12 mt - 4.3 mt were surplus. Assuming India exports two mt of onion this year,
there should still be 2.3 mt of surplus onions in the country.
"The question is where have these onions gone?" asks Gupta.
On the nature of cartelisation in onion trade, a senior officer said because of good rains in the
primary onion-growing belt of Maharashtra and Karnataka, all stakeholders in the value chain
expected prices to soften from mid-September.
To cash in on the limited window of opportunity, as the last crop came in late, traders started
squeezing onion supplies from June, which resulted in a massive price spiral around mid-
August and mid-September and, subsequently, from October 18. A sudden burst of rains in
the main growing belts around early October, which disrupted supplies, proved beneficial for
the cartels.
"Otherwise, how would someone explain an almost Rs 13/kg fall in wholesale prices of
onions in Lasalgaon in just one day - between September 19-20? Surely, this is not
production-driven," the official said, adding the entire onion value chain was driven by a few
traders and wholesalers.
Perhaps, onion is the only commodity that doesn't lose market value after storage. In other
words, even if the crop is stored for seven-10 days, it does not lose value and isn't damaged;
therefore, there is greater tendency to hoard.
The road ahead As a commodity, onions would continue to remain a pain, unless proper policies to stock and
import are framed. Gulati says, "In the short and medium term, we must have a buffer
stocking policy for onions." In other words, every year, some amount of onions could be kept
in major consuming centres as stocks; whenever supply is short, it can be augmented
immediately.
Another option is a different trade policy - importing onions in big quantities in a short time
so that demand is met.
The question is who will bell the cat?
In the long term, India should have a strong vegetable processing sector, one that enables
conversion of fresh vegetables into processed items for use during a shortage. "As with
tomatoes in some countries, the case should be the same for onions in India," Gulati says.
Chand advocates building good storage facilities across the country.
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Till then, onion prices would continue to haunt all---farmers (when prices crash) and
consumers (when prices rise) alike.
"This is not the first time we have experienced price volatility in onions and surely, it
wouldn't be the last," sums up Gulati.
Onion prices to fall even before imports: Traders (ET: 24.10.13)
Government is also talking about banning exports of onion as a higher minimum export price
has not helped to tame domestic prices.
Even though union agriculture minister Sharad Pawar has said the government may import
onion from China to quell a spike in prices, private traders will not import any of them
because they will not recover even 25% cost of the imported onion. The government is also
talking about banning exports of onion as a higher minimum export price has not helped to
tame domestic prices.
It is desperate to bring down the price of the staple food input so that it would not face an
angry voter ahead of elections to five state assemblies. However, traders say both measures
are not feasible. “We have already burnt our fingers when we imported onions two months
ago as domestic prices crashed by the time imported onions landed here.
This time too, domestic prices will come down by the time imported onions reach India,” said
Ajit Shah, president, Onion Exporters Association. Wholesale prices in different growing and
consuming regions have increased by over 200% from June to September. Retail prices have
behaved most erratically, remaining above Rs 60 per kg for the longest period ever,
occasionally reaching Rs 80 per kg and Rs 90 per kg in major cities.
Agriculture minister Sharad Pawar said onion prices will remain high for the next 2-3 weeks.
Experts and traders expect prices to cool down within a week. “The downward trend in onion
prices will begin in the next 3-4 days as fresh crops are being supplied to many markets in
Maharashtra,” said RP Gupta, director, National Horticulture Research and Development
Foundation, Nashik.
Danish Shah, managing partner, Sanghar Exports, said, “In the next 10 days, prices are likely
to come down by 50%. They are likely to be Rs 20 per kg to Rs 30 per kg in wholesale.”
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Heavy rainfall during Ganesh festival has damaged some crops in Maharashtra. According to
the state agriculture department, productivity of about 5-7% crop will decline due to the
recent rainfall. Current wholesale prices of new onions are about Rs45 per kg, which do not
justify the retail price of Rs90 per kg to Rs100 per kg.
The maximum wholesale price of old onion is in the range of Rs 60 per kg to Rs 70 per kg
and is being bought by exporters and seed breeders.
Potato prices almost doubled in most parts of India over past one week (ET: 25.10.13)
Potato prices almost doubled in most parts of India over past one week
Potato prices have almost doubled in most parts of India over the past one week. While most
states are yet to take steps to check the spike in prices, West Bengal chief minister Mamata
Banerjee has called a meeting on October 30 to review the situation.
For Mamata Banerjee, it is a dilemma because farmers are gaining from a jump in prices.
They are now getting 10 for a kg as compared to 4.50 per kg a fortnight ago. But rising prices
are pinching the buyers who are paying almost 33% more for a kg now.
The Jyoti variety is commanding a retail price of 16 per kg compared to 12 a kg a week ago.
Bengal farmers are sending potatoes to the neighbouring states of Bihar, Jharkhand, Odisha
and Assam, where rains have damaged the crop.
"A sudden demand from these states has pushed up prices. Moreover, rains have destroyed
crops in south India too. But farmers have suffered huge losses for the entire year as what
they earned was much below the cost of production," said Patit Paban De, member, West
Bengal Cold Storage Association.
Earlier, Mamata Banerjee had taken tough measures to control vegetable prices. But potato
traders say the CM is aware about the distress sale of potatoes this year. Dilip Pratihar,
secretary, West Bengal Potato Merchants Association, said, "There were some move
toseal state borders to stop the movement of potatoes from West Bengal to neighbouring
states. But it fizzled out and trucks loaded with potatoes have left for Jharkand and Assam."
Rising potato price is not an isolated phenomenon in Bengal alone. Prices in Uttar Pradesh,
the largest producer of the tuber, have more than doubled at the retail level. "Farmers are
getting 16 per kg now from 8-9 per kg a week ago. In Agra market, consumers are buying
potato at 25-30 per kg," said Naveen Shukla, owner of Naveen Agri Farm. Untimely rains
have delayed fresh sowing of the crop in the state by almost 25 days.
The current demand is being met from the old stock which is why prices have gone up,
explained the traders. But the Akhilesh Yadav government in UP is not intervening to control
prices.
Traders say that with Lok Sabha elections round the corner the government is not likely to
intervene. "Farmers are benefitting from the price rise and therefore the government will
allow the present situation to continue keeping an eye on the rural vote bank," said Sushil
Chaudhary, a potato trader from Saharanpur. The state had produced 138 lakh tonne of potato
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last season.
In Punjab, another major potato producer, prices have shot up. Farm prices have appreciated
to 12 per kg from 8 per kg. At the retail level, consumers are paying 16-18 per kg. But the
Shiromani Akali Dal- led government in Punjab is not intervening. "It is a temporary
phenomenon and prices will cool off within the next fortnight when new crop comes to the
market. Therefore, there is no point for the government to step in," said Sukhjit Singh Bhatti,
owner of Jalandhar-based Bhatti Agritech.
74
75
SUGARCANE / SUGAR
Haryana to give country's highest ever price of sugarcane (ET : 26.09.13)
Haryana chief minister,Bhupinder Singh Hooda on Thursday announced to give country's
highest ever price of sugarcane to the farmers of the state. This would benefit the farmers to
the tune of an additional income of Rs 450 crore to Rs 500 crore during the year 2013-14.
The chief minister, announced to give a price of Rs 301 per quintal for the early variety of
sugarcane, Rs 295 per quintal for mid variety and Rs 290 per quintal for late variety.
Sugarcane is cultivated on over 3 lakh acres of area in Haryana. The rate of recovery of sugar
has increased from 9.05 % in 2012-13 to 9.76%.
Mr Hooda said that while considering the demands of the representatives of the farming
community, he had decided to further increase the price of sugarcane as decided by the
Haryana state sugar control board thus increasing the price of mid variety from Rs 291 to Rs
295 per quintal and that of late variety from Rs 286 to Rs 290 per quintal.
With this hike for the year 2013-14, the rate of early variety of sugarcane has been increased
by Rs 25 per quintal as compared to that of 2012-13. Similarly, the rates of mid and late
varieties have been increased by Rs 24 per quintal as compared to the year 2012-13.
Hooda said that during the last eight years of his eight years tenure, the price of early variety
of sugarcane has been increased by Rs 184 per quintal whereas the INLD government had
increased it by merely Rs 22 per quintal during its rule from July 1999 to February 2005.
When the Congress assumed office in 2005, at that time the rate of sugarcane was Rs 117 per
quintal, but now it had been increased to Rs 301 per quintal, thus making an increase of 157
% said Hooda.
Farmers have been paid on time for the sugarcane purchased from them and for the last
crushing season, no arrears are pending neither of cooperative nor of private sugarmills. He
said that in case of Uttar Pradesh, arrears of sugarcane amounting to Rs 2500 crore are yet to
be paid.
Sugar mills sitting on huge inventory of 8.5 mn tonnes: ISMA (BS 6.10.13)
Stock pile up may spell trouble for sector, says industry body, seeks govt support and
rationalisation of cane prices
Sugar mills have begun the 2013-14 marketing year, that started this month, with an opening
stock of 8.5 million tonnes and this huge inventory could spell trouble for the sector,
according to industry body ISMA.
In 2012-13 marketing year (October-September), mills had an opening stock of 6.2 million
tonnes, sufficient to meet three months' demand.
"We have the opening stock of sugar of about 8.5 million tonnes, higher than last year. The
production estimate for 2013-14 is also more than the demand," Indian Sugar Mills
76
Association (ISMA) Director General Abinash Verma said.
"It will be a difficult situation for the industry unless there is support from the state, central
governments and rationalisation of sugarcane pricing," he added.
Ex-factory prices of sugar are currently lower than the last year's level, he said, adding that
banks are reluctant to give loans to Uttar Pradesh-based mills unless there is linkage between
cane and sugar prices.
Verma feared that sugarcane arrears to farmers will increase substantially from the current
outstanding of about Rs 3,000 crore in the absence of government support. Maximum arrears
pertain to Uttar Pradesh, the second biggest sugar producing state in the country.
ISMA has pegged sugar production in 2013-14 at 25 million tonnes as against the annual
demand of 23.5 million tonnes.
With likely surplus production this year, mills will have to focus on exports, said Verma.
Asked about crushing operation, Verma said mills in Uttar Pradesh will start after the
announcement of state advisory price (SAP) for this year.
In Maharashtra, the country's largest sugar producing state, mills are expected to begin
crushing operations by the end of this month.
The Centre has fixed a fair and remunerative price of sugarcane at Rs 210 per quintal for
2013-14 marketing year.
Last year, the country produced 25.1 million tonnes of sugar and imported 0.75 million
tonnes, taking the total availability of sweetener to 25.85 million tonnes. The demand was
about 23 million tonnes and exports were 0.35 million tonnes.
Sugar exports to get a lift from refining growth abroad (BS: 9.10.13)
India, which has exported only small quantities of sugar lately, could ship as much as three
mt in 2013-14.
A jump in sugar refining capacity in Asia and Africa is set to help India boost exports of the
raw variety of the sweetener and reduce the world no 2 producer's bulging stocks.
Capacity for turning raw sugar into the white variety in Sri Lanka, Iraq, Yemen, Egypt and
Bahrain, is expected to almost double from current levels of 5.6 million tonnes (mt) annually
in coming years, industry executives said.
India, which has exported only small quantities of sugar lately, could ship as much as three
mt in 2013-14, capitalizing on rising demand in the two regions.
"Significant refining capacities have come up and substantial capacity is being added in both
Asia and Africa and that will, in a few years, lead to about 10 mt of total refining capacity in
that region," said Leonardo Bichara Rocha, an economist with the International Sugar
77
Organization.
Rapid population growth, a rising middle class and migration to cities from rural areas mean
more demand for ice creams, soft drinks and processed food, pushing up sugar consumption
to 35-40 mt a year in Asia and Africa, according to trade and industry officials.
When consumption is stagnating elsewhere, traders see an annual 2-3 per cent rise in sugar
demand in Asia and Africa.
As production from the cane crop has lagged demand growth in the region, refineries are
springing up to fill the gap. The refineries import raws, or unrefined sugar, to process into
whites at a refining cost of $60-$90 a tonne and charge a premium on the end-product.
Al Khaleej Sugar in Dubai and Savola Group in Saudi Arabia were the first to spot the
opportunity and build refineries. Others are now following suit.
In India, sugar production has surged, with 2013-14 expected to be a fourth straight year of
surplus output. India's stockpiles stand at more than 8 mt.
Indian mills, on their part, plan to boost production of raws to meet rising demand from the
regional refineries. "Companies would focus more on raws to cater to demand overseas," said
Sanjay Taparia, chief financial officer of Simbhaoli Sugars.
More production of raws for exports would mean a lower output of whites, which would help
cut India's stockpiles. Also aiding exports from Indian mills will be a turnaround in New
York raw sugar futures and a drop in refining margins, making it more lucrative to export raw
sugar.
White-over-raws premiums fell to between $85 and $88 a tonne from $121 in August.
Meanwhile, New York front-month contract has rebounded 16 percent since falling to a
three-year low of 15.93 US cents a pound in mid-July, partly on hopes the market could
absorb a global surplus.
Indian shipments will have the benefit of geographical proximity to the refineries compared
to competitors such as Brazil, the world's top sugar producer and exporter.
"You have got $10-$15 (per tonne) freight advantage than Brazil," said Nick Kwolek,
regional manager of Sucden Middle East in Dubai.
Still, India would face stiff competition from Thailand, the world's second-largest sugar
exporter, where availability of the sweetener for shipments is expected to jump after the
crushing season starts in mid-November.
"The fourth quarter and the early first quarter of next year will be very important for India,
before Thai producers have raw sugar volume to export. That will be a window the Indian
producers will be able to exploit," said Tom McNeill, director at Brisbane-based commodities
analyst Green Pool.
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Brazil factors begin driving up global sugar prices (BL: 13.10.13)
Sugar prices are tending to rise in the global market on concerns over a couple of
developments in Brazil. This could help drive exports of sugar exports from the country if the
trend continues.
Though initial projections for the current season that began this month have pegged supplies
higher than demand, rains and currency movements could change the market scenario.
During the weekend, sugar prices in the global market rose to a three-month high as rains in
Brazil’s Centre South raised concerns over production. Additionally, Brazil has approved a
six per cent hike in prices of gasoline, encouraging production of more ethanol.
Higher production of ethanol will cut sugar production, in turn, driving up prices.
White sugar in London was quoted at $508.90 a tonne and raw sugar ended at 18.72 cents a
lb during the weekend.
A report by Rabobank last week said that rising global prices and a week rupee could boost
exports from India this season. On the other hand, it said that the scope for sugar prices to rise
globally is limited next year as supplies are likely to exceed demand again.
According to Rabobank preliminary projections, global surplus of raw sugar is likely to be
5.4 million tonnes (mt), while the global stocks-to-consumption ration is expected to
increase.
A volatile currency market, resulting from the US Federal Reserve’s plan to phase out its
$85-billion-a-month stimulus package, will also impact sugar prices, which are dollar-
denominated. Rabobank analysts Andy Duff said that global surplus, however, will be lower
than 9.9 mt projected for 2012-13. “It implies a further build-up of global stocks during 2013-
14 and a further increase in the global stocks-to-consumption ration.
Together, these factors will mean prices will remain under pressure,” he said.
However, the global surplus will depend on production in Centre South Brazil with a wet
weather during October-November likely to result in cutting down of expectation of sugar
production and availability.
Rains have also slowed progress of Russia’s beet harvest, raising concerns over production
estimates and import requirements for the next season. Such uncertainties could result in a
marginal risk premium for 2014 sugar prices. “Unless the fundamental picture changes
drastically over the next few months, any upside for world raw sugar prices appears limited,”
said Duff.
Liberalisation of sugar market by the European Union in 2017 will see limits for production
lifted. Sugar production is expected to increase in the European Union, inducing competition
between producers. Currency weakness is also likely to help Australian growers, said
Rabobank.
79
Sugar industry seeks Govt’s help to start crushing (BL: 17.10.13)
Battling cane arrears and a downward trend in prices amidst sluggish demand and high
stocks, the Indian sugar industry has sought Government intervention to kick-start the
crushing operation in the new season.
“The sugar industry has suffered substantial losses in the last season. At current prices, it is
not sustainable to run the industry,” said M. Srinivasan, Chairman of the Indian Sugar Mills
Association (ISMA).
He said millers were facing tough time in raising working capital as bankers, who have put
the sugar industry in the negative list, have refused to extend loans if the cane pricing was not
rationalised according to the Rangarajan Committee recommendations.
Srinivasan suggested that the Government arrange bank loans to meet the working capital
needs and waive interest up to 12 per cent, as in 2007-08, which could give Rs 3,500 crore
liquidity to the mills.
He further said the Government should hike the import duty on sugar to about 40 per cent or
stop the inflow completely to stabilise the prices.
So far, about 7.5 lakh tonnes of sugar is estimated to have been imported of which, about 3.5
lakh tonnes have been re-exported.
Abinash Verma, Director General, ISMA, urged the Government to facilitate exports of 3 mt-
5 million tonnes of sugar over the next eight to 10 months to reduce the inventory build up or
else the sugar balance at the end of current year in September 2014 could touch as high as 10
mt.
At current global prices, exports are not viable and the Government should assist exports by
providing the transport subsidy as it had done in 2006-07 and 2007-08.
Also, the Government should allow conversion of existing sugar stocks into ethanol, Verma
said.
Calling for an implementation of cane pricing reforms as recommended by the Rangarajan
Committee, Vice-Chairman of ISMA Ajit Shriram said cane prices in Uttar Pradesh have
seen an increase of 75 per cent in the past four years, while the sugar prices have risen by
only six per cent during the period.
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“The Indian sugar industry is paying nearly twice that of Brazil toward the cane costs to
produce one kg of sugar and that’s simply not sustainable,” Shriram said.
In Uttar Pradesh alone, the cane arrears for last season stood at Rs 2,400 crore, while the all-
India figures are estimated at Rs 4,000 crore.
Sugar prices have been on the decline over the past few months on ample domestic supplies
and bearish trend in global prices.
The ex-factory prices in Uttar Pradesh, which stood at Rs 31 a kg two months ago, now stand
reduced to Rs 29.50, while the production cost is estimated at Rs 34-35.
“We cannot have low sugar, high cane price and a viable industry,” Shriram said.
With banks refusing to extend credit, the cane arrears will start building up from day one of
the crushing season this year as millers have no money to pay, Shriram said.
“If the UP Government makes its stand on cane pricing clear, we can re-approach the banks
for working capital,” Shriram said. The UP Government had fixed cane price of Rs 280 for a
quintal last year.
M.G. Joshi, Managing Director of the National Federation of Sugar Co-operative Federation,
said the situation was alarming and that crushing would begin only after the mills and farmers
decide on quantum of first advance payment in Maharashtra.
Last season, the Maharashtra mills paid an average cane price of Rs 2,650 a tonne, excluding
the harvesting and transportation cost of Rs 500/tonne.
Sugar ind seeks hike in import duty and export sops (BS: 17.10.13)
Govt should assist the sugar industry in exporting 30-40 lakh tonnes in the next 8-10 months:
ISMA
ISMA, the apex body for sugar industry, today demanded the government to
increase import duty on sugar and provide assistance for exports to bail out the sector that
suffered losses in 2012-13 season.
"Immediately increase the import duty from the current 15% to at least 40% on both white
and raw sugar," Indian Sugar Mills Association Director General Abinash Veram told
reporters here.
Stating that sugar mills have a huge opening stock of about 90 lakh tonnes, ISMA said the
government should "assist the sugar industry in exporting 30-40 lakh tonnes in the next 8-10
months."
In Uttar Pradesh alone, the sugar mills faced a loss of about Rs 3,000 crore because of higher
sugarcane price in the state, Verma added.
The association also said the Centre should impress upon the States to immediately accept
and implement the Rangarajan Committee recommendations linking sugarcane price to the
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sugar price and by-products price realisation.
Stating it faced liquidity crunch, ISMA said the government should re-introduce the interest
subvention scheme on bank loans to enable sugar mills to meet the working capital
requirement.
"Government brought in a scheme in 2007-08, whereby loans equivalent to excise duty
paid/payable in two years, were given by banks, and the interest burden was borne by the
Central Government as well as the Sugar Development Fund to an extent of 12% per annum.
A similar scheme now would give liquidity of Rs 3500 crore to mills," ISMA said.
It also suggested that the Centre should create strategic sugar reserves of 20-30 lakh tonnes,
to be held regionally by FCI.
"These steps are required to be implemented immediately so that the sugar industry could
start their sugarcane crushing on time in 2013-14 sugar season and save the industry and
farmers from sickness and extinction," the association said.
Sugar production of India, the world's second largest producer and biggest consumer, is
estimated at 250 lakh tonnes in the 2013-14 season (October-September) as against 251 lakh
tonnes in the previous year.
This would be the fourth successive season when sugar production is higher than domestic
demand, which is seen at 230 lakh tonnes annually.
High debt, low sugar prices lead to delay in crushing by sugar mills (ET:18.10.13)
Bogged down by huge debt and mounting cane arrears, sugar mills all over the
country have delayed crushing until the government makes cane price linkage clear.
Staring at an estimated everhigh surplus stock of 10 million tonne of sugar in the coming
season (October 2013-September 2014), Indian Sugar Mills Association (ISMA) said that
high cane cost and low sugar prices have made the working of the industry unviable.
"Banks are refusing to extend the working capital to the mills, especially in Uttar Pradesh, for
the coming season, until the cane prices are rationalised. In such a case, sugar mills would be
unable to start their crushing operations," said M Srinivasan, President, ISMA. In UP alone,
sugar mills face a loss of Rs 3,000 crore. Co-operative mills based in Maharashtra and
Karnataka also said that they would not start cane crushing unless the first cane price
submission is made post-Diwali.
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"There is no clarity on cane price this season. Karnataka did declare a gazette on cane price
linkage, but no ratio was mentioned in it. Maharashtra is still indecisive," said MG
Joshi, managing director, National Federation of Co-operative Sugar Factories (NFCSF).
The state advised price (SAP) of cane in UP was revised recently to Rs 280 per quintal
currently. Sugar price prevailing in north India is Rs 31 per kg and Rs 29.5 per kg in
Maharashtra. Total amount of cane arrears currently is aroundRs 4,000 crore, out of which
the share of UP is highest at Rs 2,400 crore.
In its recommendations, the Ranagarajan Committee has linked the cane price with the price
of sugar and byproducts. But cane price still remains a state subject and is usually kept high
to appease farmers.
Sugar market was partially decontrolled in April this year, when mills were allowed to sell
whole of their produce, even the sugar needed for public distributions system, at market rate.
However, no decision was taken on the cane price. As per ISMA's estimates, sugar
production in India is estimated to touch 25 million tonne in the coming sugar season. Last
season also saw imports of 0.7 million tonne of refined sugar coming in India, while the
export amount was just half at 0.3 million tonne.
While government increased the import duty to 15 per cent, millers are asking for a duty of at
least 40 per cent of sugar imports. "We are also requesting the government to help the
industry in export 3 to 5 million tonne of sugar in the next 8 to 10 months to bring in some
parity," said Abinash Verma, director general, (ISMA).
This would be the fourth consecutive season when sugar production in India would be higher
than the domestic demand, which is 23 million tonne annually.
Sugar output slips 4.5%,but consumption goes up (BL: 21.10.13)
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Domestic sugar consumption grew 3.6 per cent to 22.8 million tonnes in 2012-13 over
previous year, even as production declined 4.5 per cent to 25.14 mt during the period.
The Indian Sugar Mills Association (ISMA) on Monday attributed the decline in last year’s
output to the lower crushing and recovery levels in Maharashtra.
For the sugar year ending September 2013, production stood at 25.14 mt against 26.34 mt in
the corresponding last year. The top two producing States — Maharashtra and Uttar Pradesh
— produced 7.99 mt and 7.48 mt, respectively.
Sugar output in Karnataka stood at 3.46 mt, Tamil Nadu at 1.96 mt and Andhra Pradesh at
0.99 mt, ISMA said.
The overall output fell due to lower recovery and less sugarcane crushing on account of
insufficient rains in Maharashtra, Karnataka and Tamil Nadu, it said.
An estimated 250.7 mt of sugarcane was crushed in 2012-13 against 257 mt in the previous
year. Sugar recovery was down at 10.03 per cent from 10.25 per cent in the review period.
ISMA said the opening sugar balance for the new crushing season starting October 2013
stood at 8.85 mt.
CONSUMPTION
Sugar consumption, as reported by the sugar mills to the Food Ministry in their statement up
to September 30, stood at 22.8 mt against 22 mt in the previous year.
Sugarcane area drops in AP; farmers seek Rs 3,500 a tone (BL: 21.10.13)
With the cost of production going up sharply, sugarcane farmers in Andhra Pradesh have
demanded the State Government to ensure a price of Rs 3,500 a tonne for 2013-14.
The Federation of Sugarcane Growers’ Associations of Andhra Pradesh has appealed to Chief
Minister N. Kiran Kumar Reddy to bring pressure on the Union Government to increase the
statutory minimum price (SMP) for this season.
“The State Government should ask the factories to give a remunerative price (State advisory
price) over and above the SMP,” N.S.V. Sharma, Secretary of the Federation, told Business
Line.
He also suggested that the reimbursement of purchase tax (which is Rs 60 a tonne) be passed
on to the growers and not to the factories.
“If farmers get it, it will bring relief to them. He appealed to the Chief Minister to convene a
tripartite meeting with representatives of factories, officials andgrowers to discuss the
problems faced by the sugarcane farmers.
AREA DOWN
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The State grows sugarcane in 1.89 lakh hectares on an average. But the acreage went down
by five per cent this year. Unofficial figures, however, put this still lower. As a result, the
Government has pared production estimates.
As against the average production of 147 lakh tonnes, the State is expected to produce a tad
lower.
In fact, the decrease in area continued for the second consecutive year. While the area
dropped by 15 per cent last year to 1.76 lakh ha, it is all set to come down to 1.65 lakh ha
next year.
“Farmers planted only in 63,500 ha this year (which will come for harvest next season). With
the rattoon crop (the follow-up crop) covering an area of 1.01 lakh ha, the total area could
touch the 1.76 lakh-ha- mark,” N.S.V. Sharma said.
With the crop turning unremunerative, farmers are shifting to other crops such as maize and
oil palm, wherever possible.
“It is only those farmers who cannot afford other crops (based on water availability) are
growing cane,” he said.
Sugar industry for direct manufacture of ethanol (BS: 21.10.13)
A practice prevalent globally, to reduce fuel needs
Sugar mills have urged the government to allow direct manufacturing of ethanol from cane.
A practice prevalent globally, to reduce fuel needs, it is currently banned in India due to the
fear of massive cane diversion to it, resulting in lower sugar output.Brazil, for example, meets
37 per cent of its annual fuel requirement through ethanol.
The US has moved towards 20 per cent blending of the green fuel with petrol. Currently,
ethanol is produced in India as a byproduct of sugar manufacturing. Direct manufacturing of
ethanol from cane does not yield any sugar output. As of now, India has surplus sugar of 8.8
million tonnes, set to rise to 10.3 mt by the end of the 2013-14 season.
This will be the second highest sugar inventory India ever had, the largest being 11 mt in
2007-08.
“Hence, we urge the government to allow direct manufacturing of ethanol from cane,” said
Abinash Verma, director-general of Indian Sugar Mills Association (Isma).
With the record high carryover stocks, the government introduced several rescue measures
for protecting sugar industry in 2007-08. In addition to introducing a five mt mandatory
buffer stock, it allowed export incentives on six mt and also an interest subvention on a
working capital loan of Rs 3,500 crore for four years. Sugar prices declined by Rs 4-5 a kg to
Rs 12-13 a kg in that year. The industry also saw the highest cane payment arrears, at Rs
16,000 crore.
The industry anticipates a similar situation this year. With mounting cane arrears of Rs
127,00 crore this March and sugar prices falling by Rs 5-7 a kg this sugar year (October
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2012–September 2013), the government might be asked to again rescue the industry, with
similar measures.
With an estimated 1.5 mt of surplus sugar output in the ensuing crushing season, India will
have the highest ever carryover stock, of 10.3 mt in 2013-14. Isma has forecast the sugar
output at 25 mt in crushing season 2013-14. India’s annual sugar consumption is estimated at
23.5 mt.
At an average of Rs 29.5-31 a kg, the sugar industry estimated yield losses of Rs 3-4 a kg in
this season. the price has since fallen further.
There is an urgent need to bring the inventory level to four mt, for which the government
should procure two to three mt for a strategic reserve for supply through the Public
Distribution System, said an industry official. The government should also raise import duty
on white sugar to 40 per cent from the existing 15 per cent to restrict the sweetener’s supply
into India from Pakistan, he added.
After an year of getting decontrolled, sugar output falls 2.5% (ET: 22.10.13)
Karnataka crushed 33.3 million tonne of sugarcane to produce 3.4 million tonne of sugar,
with 60 mills under crushing operations for the season.
At the end of a year of getting decontrolled from the government's levy mechanism,
India's sugar industry closed its production at 25.1 million tonne, which is slightly less than
last year and with a lower recovery.
In its season-end sugar production update for October 2012 - September 2013, theIndian
Sugar Mills Association (ISMA) said 526 sugar mills crushed about 250.7 million tonne of
sugarcane, which was about 2.5% less sugarcane crushed than the last sugar season, when
India crushed 257 million tonne of cane to produce 26.3 million tonne of sugar.
The largest sugar producing state of the country, Maharashtra produced 7.9 million tonne of
sugar after crushing 70.1 million tonne of sugarcane, with a total of 172 mills under crushing
operation in the whole season. Sugarcane crushing for the season was 9% lower, while sugar
production was 11% lower than last year. This is due to a lower sugar recovery in 2012-13 at
about 11.41%.
Following it was Uttar Pradesh where there was better sugar recovery. The state produced 7.4
million tonne of sugar, with 122 sugar mills under operation during the season. Mills in Uttar
Pradesh crushed 81.5 million tonne of sugarcane
and reported 9.18% sugar recovery. UP sugar
mills crushed 6% more sugarcane, and produced
7.3% more sugar than last year. Better sugar
recovery than last year's of 9.07%, helped in
giving slightly more sugar production.
Karnataka crushed 33.3 million tonne of
sugarcane to produce 3.4 million tonne of sugar,
with 60 mills under crushing operations for the
season. In Karnataka, sugarcane crushing was
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4.2% lower, while sugar was 10.5% lower than last year. The sugar recovery fell from was
11.14% in 2011-12 to 10.40% in 2012-13. In Karnataka, sugarcane crushing was 4.2% lower,
while sugar was 10.5% lower than last year. The sugar recovery fell from was 11.14% in
2011-12 to 10.40% in 2012-13.
Sugar exports seen 2.6 million tonnes in 2013/14 (ET: 23.10.13)
Traders in the past days struck deals to export about 175,000 tonnes of raw sugar for
December-January delivery.
India, the world's second-biggest producer of sugar and a swing exporter that can
impact global prices, will export 2.59 million tonnes of its excess sugar production in
2013/14, an official said on Tuesday.
Traders in the past days struck deals to export about 175,000 tonnes of raw sugar for
December-January delivery, marking their first sale of the sweetener in the new season
beginning in October, which took some of the wind out of the recent rally in sugar prices.
ICE March raw sugar prices rose 0.26 percent to 19.47 cents per lb on Tuesday.
Although some market projections are expecting potential exports from the world's largest
consumer of sugar at as much as 3 million to 4 million tonnes this season, Vijay Singhal,
sugar commissioner for India's main sugar producing state of Maharashtra, said that would be
unlikely.
"The international price of sugar is too low for exports. It would take government incentives
or subsidies at these prices for sugar," Singhal said on the sidelines of the 13th Datagro
International Sugar and Ethanol Conference in Sao Paulo.
The area of sugar cane is due to fall slightly in India's main sugar producing states to 5.12
million hectares in 2013/14 from last season's 5.17 million hectares due to unfavorable rains,
Singhal said. Sugar production would only fall slightly to 24.3 million tonnes from 25.8
million the year before, he said.
"We have an internal sugar surplus of 8.8 million tonnes and we expect to export a net 1
million tonnes of refined sugar and 1.5 million tonnes of raw sugar," Singhal said.
Singhal added that the surplus will fall to 7.9 million tonnes next year in line with a declining
output of sugar and growing consumption. Consumption of sugar that was growing at 3
percent to 4 percent in the country was helping bring down the surplus. He projected
consumption at 23.9 million tonnes.
Datagro's conference kicks off the annual Sugar Week and Sugar Dinner on Wednesday that
brings traders, buyers, producers and analysts from around the world.
"Two factors will determine the final export numbers: the monsoons and the government,"
said Singhal, referring to the general elections next year, which means that the government
typically maintains or extends favorable minimum prices for cane producers.
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Analysts say government subsidies for cane producers were likely to stay favorable for
production next year at the cost of mills which were increasingly at the risk of going bust
because of the high costs of cane and low price of sugar.
Guilherme Nastari, the Indian sugar specialist at analysts Datagro, said India should produce
24.4 million tonnes of sugar in 2013/14, down slightly from the 24.8 million last season.
Meanwhile, Nastari saw India's consumption up slightly at 23.3 million tonnes in India from
23.1 million last year.
Datagro also projected production growth in the world's No. 2 sugar exporter after Brazil,
Thailand, to 11 million tonnes in 2013/14, up from 10.3 million tonnes last season due to
favorable price subsidies from the government there.
Thailand is expected to export more than 8 million tonnes of sugar this season, a first for the
big Asian exporter, according to Peter Baron, Executive Director of the International Sugar
Organization.
Sugar stockists clear old stocks at lower rates (BL: 23.10.13)
Sugar prices on the Vashi wholesale spot market extended losses by Rs 5-10 a quintal as local
demand was lower than arrivals.
Selling pressure at the upper mill level continued, however, prices ruled unchanged as
producers held back and decided not to sell at lower rates.
Naka rates were steady on routine activities.
A Vashi-based wholesaler said that demand for the fine variety continued to be higher ahead
of Diwali, while stockists preferred to sell their old fair quality stocks at lower rates.
Producers are continuously selling in local markets in the absence of neighbouring States’
buying.
Arrivals in Vashi market were 62-63 truckloads ( 100 bags each) while local dispatches were
also 60-61 loads.
On Tuesday, 14-16 mills offered tenders and sold about 43,000-45,000 bags at Rs 2,700-
2,840 (Rs 2,700-2,840) for S-grade and Rs 2,880-3,000 (Rs 2,880-3,000) for M-
grade. Naka and mill tender rates were unchanged since last four-five days.
Government to examine sugar mills' demand for raising import tax: KV Thomas (ET:
24.10.13)
Government will examine the demand made by local mills for raising the import tax on sugar,
the food minister said on Thursday, to help curb imports and reduce domestic stocks.
India, the world's second biggest producer after Brazil, imposes a 15 percent tax on sugar
imports.
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"We will examine the industry's demand for raising import tax on sugar," K.V. Thomas told
reporters.
In India, sugar production has surged, with 2013/14 expected to be a fourth straight year of
surplus output. India's stockpiles stand at more than 8 million tonnes.
Cane price dispute may hamper sugar export efforts (ET: 25.10.13)
Key state governments haven't been able to finalise the minimum price for the new season
which has begun in Oct as they try to accommodate competing interests.
A dispute over sugarcane prices between farmers and mills may curb sugar exports from the
world's second-biggest producer, delay crushing in the new season and even trigger
bankruptcies.
Farmers in the top sugar producing states of Maharashtra, Uttar Pradesh and Karnataka are
demanding more money for their cane while millers, already cash-strapped, want to reduce
prices in sync with falling sugar prices.
Key state governments, which set cane prices in India, haven't been able to finalise the
minimum price for the new season which has begun in October as they try to accommodate
competing interests.
They have a tough balancing act to perform this year as regional political parties are
pressuring them to raise cane prices to keep farmers happy ahead of local and national
elections in the next few months.
A prolonged dispute could mean a missed sugar exports opportunity for India, which
hadstocks of 8.8 million tonnes on Oct. 1 and is eyeing exports of up to 3 millions tonnes this
year. International demand and prices are firm and a key competitor, Thailand, has not started
exports in a big way.
Traders have struck export deals for about 175,000 tonnes of raw sugar for December-
January delivery so far, but exports are unlikely to pick up if mills are forced to buy cane
from farmers at higher price. Less exports from India may offer a respite to the over supplied
global market.
"It is not possible even to pay last year's price for cane, any hike is impossible...Why should
we start mills, when we are going to end with higher losses and debt?" C P Patodia, chairman
of the Uttar Pradesh Sugar Mills Association, told Reuters.
Uttar Pradesh, second-biggest producing state, fixed the minimum price for cane at 2,800
rupees ($45.58) a tonne in the previous season, but mills ended up with 30 billion rupees in
losses and 24 billion rupees owed to farmers, he added.
Mills in Maharashtra and Karnataka, the biggest and third-largest sugar producing states,
respectively, also paid around the same price for cane last year.
This year farmers from these three states, which account for around three quarters of the
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country's sugar output, are demanding 3,000 to 3,800 rupees per tonne.
"There is robust exports demand for raw sugar, but most mills can't commit supplies as they
are not sure about the production cost," said an official with a global trading house that last
week struck a deal to export 25,000 tonnes raw sugar.
India managed to export only about 300,000 tonnes sugar in the 2012/13 year that ended on
Sept. 30, compared with 3.3 million tonnes in the previous year as higher cane price lifted
sugar production cost and made shipments uncompetitive.
"In the overseas market raw sugar prices are rising. Mills need to take advantage and sign
deals before supplies start from Thailand," the official said, referring to the world's second-
largest exporter.
POLITICALLY SENSITIVE COMMODITY
Mills are hoping state governments will cut cane prices, but since sugar is a politically
sensitive commodity, the chances are remote. Farmers also insist mills pay more as their
production cost has also increased.
The row over cane prices erupts regularly around this time, just before the start of the
crushing from November, but this year it is fiercer and tougher to break as politicians have
become more deeply involved.C P Patodia
Sugar prices are hovering around Rs 2,900 per 100 kg, down from around Rs 3,400 in
October 2012, reflecting an increase in supply.
Regional parties want a cane price hike to keep farmers happy ahead of local and national
elections, in a country where more than half the 1.2 billion population is dependent on
agriculture.
"Labour wages, diesel and electricity prices have gone up. Production cost has risen roughly
20 per cent. Mills should compensate the rise in production cost," said Raju Shetty, a farmers'
leader from Maharashtra and a member of Parliament.
Mills point to their plight.
"With production costs only going up and revenue only coming down for the mills, the very
survival of the sugar industry is at stake," said Abinash Verma, director general of the Indian
Sugar Mills Association.
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91
INPUTS
Seed shortage might spoil bumper crop party this rabi (BS: 17.10.13)
Agriculture ministry urges states to form alliance with seed producers to meet future
requirements
Despite extended rainfalls, shortage of quality seeds could spoil the winter (rabi) crop party
this year.
Agriculture Minister Sharad Pawar, while inaugurating a rabi conference recently, forecast a
record wheat output this year. He estimated a higher output of other rabi crops on adequate
soil moisture due to rainfalls.
But, J S Sandhu, agriculture commissioner, department of agriculture & cooperation
(agriculture ministry), estimated a severe shortage of quality seed this rabi season. Sandhu
estimated quality seed of wheat may remain in short supply.
Preliminary estimates by Sandhu indicate a minor shortfall in the supply of seeds in the
coming sowing of winter crops. Any expansion in sowing area, as widely estimated due to
soil moisture, could increase further the requirement of seed. Since, there is no immediate
plan to raise supply, the estimated deficit may remain wider.
Quality seed is the most critical of all agricultural inputs and determines the performance and
efficiency of other inputs for enhancing productivity and production and thereby the income
of farmers. It is essential that adequate seeds with good genetic potential are produced in
sufficient quantity at an affordable price and made available to farmers for achieving higher
production.
Most important, the supply of quality seeds is not a one-time affair. The seed is to be
produced in every growing season every year. To produce certified seeds from breeder seeds,
at least three years are required. It has been assessed that to achieve food production targets,
there is a need for replacing the
existing Seed Replacement Ratio
(SRR) by increasing it at the rate of
33 per cent for self-pollinated crops,
50 per cent for cross-pollinated and
100 per cent for hybrids.
More, India often gets affected by
natural calamities of different
magnitude and type. When the
normal seasonal (kharif /rabi)
agricultural programme gets stalled, a contingency plan is resorted to.
Often, the contingency plan also gets stalled for non- availability of seeds. Vulnerable states
have to take action in advance to produce the required variety of seeds through their seed-
producing agencies rather than depending on outside state agencies. The seeds are then kept
in a bank.
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Many states have prepared a long-term seed plan (2013-14 to 2016-17) based on their agro-
climatic conditions, crop varieties, targeted SRR (seed required for normal conditions and
seed required for contingency situations).
Sandhu advised states to put in place their breeder seed indent plan for production of
foundation seeds and then certified seeds through their seed-producing agencies like State
Directorates of Agriculture, State Seeds Corporation, State Seed Farms, State Agriculture
University Farms, State Oilseed Grower Federations, state co-operatives such as National
Seed Corporation, Krishak Bharati Cooperative, Indian Farmers Fertiliser Cooperative and
private companies.
The agriculture ministry urged states to execute memoranda of understanding with seed
producers for supply of the required quantity of certified quality seeds for different crops to
ensure their timely availability.
Now, paddy to come under drip irrigation (BL: 20.10.13)
After providing the drip irrigation technology for cash crops, Netafim Irrigation India Pvt Ltd
is now driving adoption of the technology in rice.
Randhir Chauhan, Managing Director, Netafim India, told Business Line that the company
decided to experiment the drip fertigation system in rice, oil seeds and pulses as the use of
drip irrigation system was largely confined to cash crops such as sugarcane, banana and
vegetable crops at present.
“We have been conducting field trials here in rice on a pilot basis, and the initial response has
been positive,” Chauhan said, adding that the company was poised to rope in more acreage
under drip fertigation in the years to come. Farm Varsity experts estimate the area under rice
in India at 42 million hectares.
“Rice is a water-intensive crop. It occupies just about 30 per cent of the cultivable area but
consumes nearly 70 per cent of available water. In a bid to reorient the cultivation practice
from the present system of inundation to water sustainability, we at Netafim along with
experts from the Tamil Nadu Agricultural University have been doing some research trials in
fields,” Chauhan said.
He further said that around 25-35 acres have been covered in the pilot phase of the project.
“Our observations revealed that the water utilisation under drip irrigation was just 32 per cent
compared to flood irrigation and the farmers could get 20 per cent more yield,” he added.
Meanwhile, Parthasarathy, a farmer at Govindapuram (Amaravathy Sub-basin) in Erode
District, told this correspondent that he was among the 10-15 farmers, who cultivated rice
using drip irrigation technologyHe said, “We have been raising crops such as onion and citrus
since the 80s. Erratic rains and depleting water resources have compelled us to adopt drip
irrigation technology. The yields have been good. We need a cold-storage facility to hold our
stocks,” he added.
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AP asks edible oil industry to bring in better technology (BL: 20.10.13)
The Andhra Pradesh Government has asked the edible oil industry to bring in benchmark
technologies to improve yields.
Andhra Pradesh Information Technology and Communication Minister Ponnala Lakshmaiah
said it was very important to increase productivity in order to improve oilseed production.
This, in turn, would help the country reduce edible oil imports, which was draining the
foreign exchange.
Addressing the Indian Oilseeds and Produce Export Promotion Council’s (IOPEPC) annual
trade meet here on Saturday, the Minister said the country was currently importing 50 per
cent of all edible oils, spending about $10 billion.
He said that Andhra Pradesh ranked second after Gujarat in groundnut production. “We are
giving huge subsidies for inputs such as drip irrigation for oil palm growers. I request the
industry to bring technologies to improve productivity,” he said.
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95
OTHER AGRI / FARM NEWS
Study pushes for post-harvest management (BS 5.10.13)
Assocham says 25 mn tonnes annual grain wastage could then stop, promoting farmer
incomes, export and lower food prices
A focus on post-harvest management would save the country 25 million tonnes of foodgrain
from spoilage yearly, about a tenth of the yearly output, says a study by the Associated
Chambers of Commerce and Industry of India (Assocham).
Lack of farmers’ education, coupled with poor infrastructure and handling for transportation,
result in wastage and pilferage. All this reduces farmers’ income and unnecessarily raises the
price of grain.
The loss assumes significance as the quantity constitutes around 10 per cent of India’s overall
annual foodgrains production.
“Farmers (need to be) educated on handling post-harvest cleaning, grading and switching to
standardised packaging of produce, as per the domestic and export market requirement,” says
the study.
India, it says, can also tap a great potential for exporting 20 mt of rice, wheat, maize and
other cereals without disturbing the domestic equilibrium.
“If farmers carry out post-harvest grain management activities thoroughly, it would help
avoid significant spillage and wastage at various points from farm to market yard, as the
entire produce need not be displayed in bulk and buyers can be allowed to draw samples,”
said D S Rawat, secretary-general of Assocham.
The current practice is to harvest the grain and bring it to the market yards to sell through
auction; price determination through visual inspection is common. The grains are graded after
cleaning by traders and other middlemen in the market yard; this means a lower price for the
farmer, as he sells his produce without cleaning and grading
“There is a need to educate farmers about traders’ needs in terms of quality, grades and
application of permissible preservatives for a longer shelf life. Besides, farmers must be
informed that higher grades would fetch them a better price...the government should also
encourage system of farmer-graded grain in procurement, in synchrony with trade and export
needs. The present system of large rice and wheat procurements in bulk by government in
various states is disincentivising for farmers to invest their time in cleaning and grading, as
the premium on better quality and grade is not commensurate with returns...a saving on
wastage and better shelf life would benefit both sellers and buyers,” said Rawat.
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The study says the government should encourage private participation in the grain trade, with
a pro-active export policy, given the severe storage and maintenance problems, together with
mounting subsidy on wheat and rice procurement.
Assocham also suggests post-harvest infrastructure development is a pre-requisite for value
addition in agri-export. Different agricultural products have particular requirements on
preservation and maintaining of quality, controlling of moisture levels, longer shelf life and
storage, handling and transportation.
A switching to contract farming is another good option for farmers, as they gain technical and
credit support, beside lifting of produce at the farm gate, it said.
Delhi facing longest monsoon in 50 years; more rain likely (ET 8.10.13)
Delhi facing longest monsoon in 50 years; more rain likely
This year's monsoon in Delhi is tipped to be of the longest duration in more than 50 years
with another spell of light to moderate rainfall likely this weekend while Dussehra revelries
are on in the city.
According to the MeT department, the length of the current Southwest Monsoon is likely to
exceed 120 days, breaking the previous record of 111 days recorded 57 years back.
"The SW Monsoon's withdrawal from NW-India is likely to get delayed and break the
previous record of latest withdrawal in 1956 and 1959, when it had occurred on October 13,"
said Dr OP Singh, Deputy Director General of Meteorology, Regional Meteorological Centre,
New Delhi.
The normal date of withdrawal for the SW Monsoon from Delhi NCR is September 21. But,
most years, the monsoon here recedes by the end of September.
In the last 70 years, only on seven occasions has the monsoon withdrawn from the national
capital region in October, in 2007 and before that in 1954, 1956, 1958, 1959, 1961 and 1974.
"In the last one week, isolated rainfall has occurred over Himachal Pradesh, Punjab,
Uttarakhand, western Uttar Pradesh, eastern Rajasthan and at few places over eastern Uttar
Pradesh," he said.
The delayed withdrawal could play a spoilsport for Durga Puja and Navratri, festivals which
are celebrated with fanfare in Delhi NCR, as the area could see showers on Friday and
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Saturday.
"Another spell of light to moderate rain or thundershowers is expected to occur over Delhi
NCR during the weekend (between October 11 to 12)," the MeT office said.
Meanwhile, Delhiites witnessed a sunny day today with the maximum temperature remaining
above normal.
The mercury was recorded a notch above normal at 34.5 degrees Celsius while the minimum
was three degrees above normal at 24.5 degrees.
Humidity in air fluctuated between 55 and 89 per cent.
Extended rains boost rabi crop prospects (BS: 9.10.13)
Sharad Pawar forecast India's wheat output to exceed record of 94.9 mt set in 2011-12 crop
year (July-June)
Extended rains across the country have led to hopes of a rise in rabi crop acreage. This
follows estimates of a bumper kharif crop this year.
At a recent meeting, Agriculture Minister Sharad Pawar had said India's wheat output was
expected to exceed the record of 94.9 million tonnes (mt) in the 2011-12 crop year (July-
June). “The government hopes this rabi season, wheat production would achieve another
milestone, given the right
amount of moisture
available in the soil and
various interventions by the
central and state
governments,” he had said.
In the 2012-13 crop year,
wheat production had
declined to 92.5 mt.
Production of other
major rabi crops, including barley, mustard seed and chana, is also likely to rise due to the
likelihood of higher acreage this season.
This year, the onset of the southwest monsoon was on time and most areas recorded normal
rains. However, in some areas in Bihar, Jharkhand and the northeast, rainfall stood at only
20-30 per cent of the long-period average. Pawar said good rains in July and August had
raised hopes of a bumper harvest this year. A dry September would help the rice crop mature
well in north India, he added.
Against last year's kharif foodgrain production of 128.2 mt, this year's production was pegged
at 129.32 mt, according to the first advance estimate.
This year’s rabi crop yield could be very high if winter rains were timely and temperatures
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favourable, said Prerana Desai, vice-president (research), Kotak Commodity Services.
Prasoon Mathur, a Religare Commodities analyst, said for the rabi crop, the climate had
turned favourable, with spells of rains. However, increased soil moisture would be a hurdle to
harvesting kharif crops, albeit for a short period. “Initial indications are the rabi crop output
will remain high this year,” said Mathur.
“The extended monsoon will be good for the rabi crop and given the monsoon is expected to
be favourable, we can continue to see good prospects for agriculture. But given the higher
base of last year, our forecast for agri output will be 3- 3.5 per cent this year. Wheat, in
particular, would do well,” said Madan Sabnavis, chief economist, CARE Ratings.
Centre to build storage for steady flow of food grains under Food Security Act (ET:
18.10.13)
The Centre will provide Rs 450 crore while the land for construction will be given by the
states that are willing to come up with these facilities.
The government has proposed to set up intermediate grain storage facilities at block level in
each state, a move aimed at ensuring steady flow of food grain under the National Food
Security Act.
According to the proposal, the Centre will provide Rs 450 crore while the land for
construction will be given by the states that are willing to come up with these facilities.
The proposed storages will be constructed under the Mahatma Gandhi National Rural
Employment Guarantee Act. "NREGA will be used to set up intermediate storage facilities,"
rural development minister Jairam Rameshsaid. "It will be entirely centrally sponsored, with
the Centre pumping in Rs 450 crore to create 15 lakh tonne of storage capacity in the first
year." The government has identified 6,612 blocks across the country, with average storage
capacity of 44,000 tonne.
According to Ramesh, though this will require an amendment in Schedule 1 of MGNREGA,
the move will lead to increase in storage capacity and improve the implementation of the
National Food Security Act. "The creation of these intermediate storage facilities will largely
benefit states which are facing shortage of storage facilities like Uttar Pradesh, Bihar,
Maharashtra, Madhya Pradesh, Chhattisgarh, Jharkhand and Odisha," he added.
The Food Security Act, which was notified last month, gives legal entitlement to 67% of the
population (including 75% rural and 50% urban) for subsidised grains under the Targeted
Public Distribution System.
Under the Act, the government will provide 5 kg of rice, wheat and coarse cereals per month
per person at Rs 3, Rs 2 and Rs 1 per kg, respectively. However, there were apprehensions
that this will lead to increased leakages at different levels. "Success in the implementation of
the Food Security Bill depends on availability of minimum 62 million tonne of foodgrain,
which means there should be a sustainable production of foodgrain in the country.
Second part is the storage, where procurement by central agency is done. In 2010, our central
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storage capacity was 604.2 lakh tonne, which has gone up to 767.9 lakh tonne now along
with additional 203.75 lakh tonne capacity coming up in the country," food minister KV
Thomas said.
He said since 2009, the government has been in constant touch with state governments asking
them to have intermediate storage facility with at least two-three month of storage capacity.
‘Climate change affecting major food crops’ (BL: 18.10.13)
Climate change is hitting closer to home than earlier expected. Agriculture production has
seen a significant drop due to the effects of climate change such as increased temperature,
floods and drought.
In a country struggling with rising population and the need to feed people ore every year,
farm production is taking a big hit, according to Sanjoy Bandyopadhyay, Principal Scientist,
Indian Agricultural Research Institute.
He was addressing a meet here on Friday on the ‘Impact of Climate Change on Agriculture’
organised by The Energy Research Institute (TERI).
He said that the production of wheat has dropped by six per cent, while rice and mustard
production have narrowed by four per cent each.
Climate change has resulted in 70 per cent of India’s land becoming drought-prone, 12 per
cent flood-prone, while eight per cent is affected by cyclones.
According to a study conducted by World Bank earlier this year, since almost 60 per cent of
India’s crop area is rain-fed, change in precipitation would impact food production.
The study predicted that by 2050, a temperature increase of 2-2.5 degree Celsius is likely
(compared to pre-industrialisation period), which would reduce the water availability for food
production and 63 million people in India may not be able to meet their daily calorific
requirement.
Optimism on agricultural growth this year (BS: 21.10.13)
Many feel first advance estimate for kharif was, as in the past, rather conservative
At the outset, it might seem that a
below one per cent increase
inkharif (summer crops) foodgrain
production for 2013-14 has dashed
the hope of a five per cent agricultural
growth for the year. With this, any
cooling of food inflation, around 18
per cent in Wholesale Price Index
terms and 11 per cent on the basis of
the Consumer Price Index, would be a
far dream.
However, analysts say a deeper analysis shows over five per cent farm growth in 2013-14 is
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within reach.
A low 0.87 per cent increase in kharif grain production was arrived at by comparing the first
advance estimate for the current year with the fourth one of 2012-13. The 129.32 million
tonnes of foodgrain production in the first advance estimate for the current year was only
marginally higher than the 128.2 mt estimated by the fourth round for FY13.
However, if one makes like-to-like comparison, kharif foodgrain is estimated to grow 10 per
cent compared to the 117.18 mt calculated by the first advance estimate of FY13.
“We are sticking to our estimate of five-plus per cent agricultural growth in 2013-14,” Ashok
Gulati, chairman of the Commission for Agricultural Costs and Prices (CACP), told
Business Standard.
There is usually a five to 11 mt upward revision between the first and fourth advance estimate
of kharif production. The first advance estimate is usually issued in August-September and
the fourth in April-May. Officials say the anomaly happens because of late reporting of crop
size from district authorities and the rudimentary methods of estimation.
“Usually during the first advance estimate stage, the crop is about to mature. Hence, the exact
size is difficult to assume, as many factors influence the crop between full maturing and
harvesting,” a senior official explained.
The other factor which builds hopes of a sharp upward revision is the performance of the
southwest monsoon. As rice is the most important grain grown during kharif, any dip in the
monsoon has a serious adverse impact on its final output, particularly in eastern states, where
the crop is cultivated on large tracts.
“In 2012, the southwest monsoon was seven per cent below normal and kharif grain
production was revised upward by a little over 11 mt. Imagine what can happen this year,
when the southwest monsoon is almost six per cent above normal across the country,” said
another official.
In the eastern states of West Bengal, Odisha and Bihar to some extent, paddy is sown late,
around early to middle August. So, its actual impact is not fully captured by the first advance
estimate.
In West Bengal, the largest producer of rice, the southwest monsoon in 2013 was just one per
cent below normal, while being 18 per cent deficient last year. In Bihar, though, rainfall was
30 per cent below normal between June 1 to September 30, it has been raining strongly since
and the overall shortfall has narrowed significantly.
In maize, many in the sector believe the official production estimate of 17.78 mt is
conservative and there would be a strong revision in the subsequent estimates. “Maize
production is likely to surpass all records this year. We expect a bumper crop, with
production possibly crossing 18 mt by the time the ministry comes out with its second
advance estimates, as the first estimates are usually very conservative,” said Raju Choksi,
vice-president (agri commodities), Anil Nutrients.
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Oilseeds and pulses
Besides, good production in pulses and oilseeds will propel farm growth to over five per cent
in 2013-14, analysts said According to the first advance estimate for FY14, kharif pulses’
production this year is expected to be 6.01 mt, almost two per cent more than last year's final
production estimate.
In 2012-13, the government had first estimated kharif pulses’ production to be 5.26 mt but
the final estimate was 5.91 mt. As such, the ouput was shown to rise by only just 1.7 per cent
but it would be 14 per cent if the first advance estimates were compared with the first round
of calculation last year, experts said.
In oilseeds, the first advance estimate for FY14 pegs output at 23.9 mt, almost 15 per cent
more than last year.
"The strong showing in pulses and oilseeds will push up overall growth in agriculture," a
senior official said.
A strong belief in the over five per cent growth is, however, not unanimous. CARE Rating’s
Madan Sabnavis felt such forecasts were exaggerated, more so after the first advance estimate
did not give a comfortable scenario. "I feel agriculture GDP this year would, at best, be 3-3.5
per cent higher, as kharif foodgrainsoutut is not expected to rise by much. Almost 55 per cent
of total foodgrain production in India is during the kharif season and this will have a telling
impact on overall food production," said Sabnavis.
He also discounted the notion that good pulses and oilseeds production would wipe off the
impact of low cereal output. "Pulses and oilseeds have a small share in overall foodgrain
production, both in weight and value. Hence, a strong increase in its production will not have
that much impact on overall GDP," he said.
Agriculture and allied activities expanded 2.7 per cent in the first quarter of 2013-14 against
2.9 per cent in the same quarter of 2012-13.
'Rate of success of farm technologies just eight per cent' (ET 21.10.13)
The steps taken by the government to support dissemination of 420 proven farm technologies
in 5,000 locations nationwide has seen a success rate of just eight per cent, according to a top
official in the International Water Management Institute, Hyderabad.
The reason as stated by 50 per cent of farmers in India was technology was not appropriate to
suit their farms, K Palanisamy, the Institute Director said at a recent three day International
Conference here on 'Drip Fertigation in Rice.'
By achieving 20 per cent increase in water use efficiency, 14 million hectares could be
brought under irrigation in India, he claimed.
A press release from Tamil Nadu Agricultural University (TNAU) today said Palanisamy
suggested going in for geographical mapping of drip irrigation technology in rice and finding
out suitable area for iis affordability and adoption.
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There was also a need for convergence of drip fertigated technology with suitable
Government interventions to support the right type of farmers in appropriate locales for
upscaling innovation in rice, he said.
K Ramasamy, TNAU Vice-Chancellor said the University would do feasibility trials on drip
irrigated rice in semi-dry areas like Sivaganga and Ramanathapuram districts.
Gujarat govt announces new agriculture power scheme (BS: 22.10.13)
Keeping the growing demand for electricity connection among farmers in the state,
the Gujarat government today announced an 'Immediate Power Connection Scheme 2013'.
The new scheme will look to offer new power connections to farmers in the state.
"In a bid to satisfy farmers' growing demand for power connections and to make avail ample
power for agricultural production, Gujarat chief minister Narendra Modi has announced a
new agri-related power connection scheme," said Saurabh Patel, energy minister,
Government of Gujarat.
Patel said that earlier farmers had applied for new agri-related power connection under a
general scheme till March 31, 2013. "All the farmers under the general scheme can now avail
power connection under the new immediate scheme," he said.
Farmers would be required to apply for a new agri power connection at the local sub-division
office between November 1 and December 15, 2013. Moreover, at the payment of ' 500, their
applications under the general scheme will be converted into the immediate power connection
scheme 2013.
Under the new immediate power connection scheme, applicants will have to bear 80 per cent
of the power connection cost and will also have to adopt drip irrigation technique.
"With the growing agriculture production in the state, demand for agri-related electricity
demand has also been increasing in Gujarat. The new immediate scheme has been launched
keeping the growing demand among Gujarat farmers in mind. In the previous fiscal, about
100,000 new electricity connections were given out by the Gujarat government whereas a
similar amount of new connections will be given out in the current fiscal as well," Patel
added in an official communique.
States told to build godowns for grains under Food Law (ET: 22.10.13)
Centre directed the state governments to take immediate steps for constructing intermediary
godowns at block level under employment guarantee scheme MGNREGA.
Centre today directed the state governments to take immediate steps for constructing
intermediary godowns at block level under employment guarantee scheme MGNREGA to
ensure additional storage facilities for effective implementation of National Food Security
Law.
In a joint letter to all Chief Ministers, Union Rural Development Minister Jairam Ramesh and
Food Minister K V Thomas said the states can construct intermediary godowns through
MNREGA scheme.
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"We request you to take immediate steps to identify locations in each block where storage is
needed, identify land required and ensure that works are taken up under MNREGA after
following the due process laid down under the MNREG Act, 2005," the letter said.
It said that Schedule-I of MNREGA has just been expanded to include construction of
foodgrains storage facilities for implementation of National Food Security Act and expressed
hope that the decision would help in creation of additional food storage facilities for
"effective implementation of the National Food Security Act, 2013".
The Government said such intermediate storage at the grassroots level, apart from being a
primary component in the entire supply chain, would also help reduce leakages considerably.
"We expect that these facilities are built by the line departments or Zilla/Block panchayats,
the wage: material ratio (60:40) will apply at the block level," the letter said.
The Centre's direction came, days after it announced its decision to set up intermediary
godowns, which are generally created at block level, for efficient and smooth distribution of
foodgrains via Public Distribution System.
Government said it has long been felt the need for the creation of intermediate storage facility
at Zilla/Block/ Village panchayat levels. The state governments are required to provide land,
while the Centre will bear the entire construction cost.
Presently, in many states, foodgrains are lifted from FCI storage depots and sent directly to
the fair price shops, resulting in 25-30 per cent leakage and pilferage.
Australian trade commission partners with Yes Bank to offer Australian agribusiness
and food expertise for India (ET: 23.10.13)
Australian Trade Commission, the Australian government’s trade, investment and education
promotion agency, and YES Bank signed a MoU to raise the productivity and exports of
India’s food and agricultural sector.
The Australian Trade Commission (Austrade), the Australian government’s trade, investment
and education promotion agency, and YES Bank signed a Memorandum of Understanding
(MoU) to apply Australian experience to raise the productivity and exports of India’s food
and agricultural sector.
The MoU was signed by Nicola Watkinson, minister commercial and senior trade and
investment commissioner – South Asia, Austrade and Nitin Puri, president and country head,
food and agribusiness strategic advisory and research, YES Bank on Wednesday.
Austrade in association with YES Bank will work with India’s food processing and
agricultural sectors. Australia which has similar climatic conditions and logistic challenges
has met these challenges to now export Australian $ 30.5 billion value of food each year
(according to the Australian Food Statistics Report 2011-12) and to some of the most
demanding markets in the world like Japan and Europe.
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The partnership will focus on introducing Australian expertise and technologies to increase
the productivity of key agricultural sectors like grains, vegetables and dairy in India. It will
also explore collaborations and joint ventures in areas of food processing to add value to
Indian agricultural produce. Further it intends to exchange information on new consumer
trends around the world that can offer new export opportunities for Indian and Australian
agricultural companies.
Austrade and YES Bank will jointly organise workshops across India to create awareness
about Australian capabilities in the food and agribusiness sectors and exchange information
with Indian businesses looking at international expansion opportunities. Austrade will also
assist Australian companies in their expansion in India through identification of joint venture
partners and investment opportunities in India.
“We recognize India’s push to achieve food and nutrition security for its growing population,
in the face of resource constraints and depletion. Australia is an idea partner to work with
India as our country faces similar challenges,” said Watkinson.
According to Rana Kapoor, Managing Director & CEO, YES Bank, “Through our knowledge
banking initiatives and advisory services, we look forward to exploring further opportunities
for cross–border trade and investment. I am confident that this partnership will enable us to
provide enhanced banking support and economic and business intelligence to Australian and
Indian corporations seeking business opportunities in either of the countries”.
India set for bumper winter crops in wake of monsoon rains (BS: 23.10.13)
Jump in production of chickpeas, rapeseed should cut expensive imports of pulses and
vegetable oils.
India looks set for bumper harvests of winter crops such as wheat, chickpeas and rapeseed in
the wake of a strong monsoon that has left the soil moist and topped up reservoirs.
The crops will follow bountiful summer harvests of rice and soybeans due to the rains, with
New Delhi looking to boost agricultural growth to cool double-digit food inflation and revive
a slowing economy as manufacturing struggles.
With next year's wheat output seen matching 2013's strong 92.46 million tonne, the
government - already sitting on piles of rotting grain as its storage overflows - could allow
more exports. Greater supply from the world's second-biggest producer of wheat would be a
bearish factor for global prices, which climbed to their highest since June this week.
A jump in production of chickpeas and rapeseed should cut expensive imports of pulses and
vegetable oils as the government battles to narrow a gaping current account deficit.
"Winter crop prospects are definitely bright as a good monsoon and late, extended rains have
left plenty of moisture in the soil, setting the stage for farmers to harvest bumper crops of
wheat, pulses and oilseeds," said Devinder Sharma, an independent food and trade policy
analyst.
Farmers sow winter crops from October, a month after the June-September monsoon rains
ebb, with harvesting starting from March.
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They principally plant rice, sugarcane, corn and cotton in the rainy months of June and July,
while wheat, chickpeas and rapeseed are the main winter-planted crops.
SUBSIDISED FOOD
"A few broad indicators like area, sales of seeds and soil moisture indicate that wheat acreage
will be as good as the previous year, implying almost similar production," said Indu Sharma,
chief of the state-run Directorate of Wheat Research in Haryana, a major wheat growing state
in northern India.
India, second to China in wheat production, in 2013 recorded its sixth straight year in which
output exceeded appetite. Local demand hovers around 76 million tonne a year.
To cut stocks, the government has exported nearly 4.5 million tonne of wheat since
December 2011 - the first time it allowed exports since a ban in 2007 - and has asked state-
run traders to ship out another 2 million tonne.
The government buys more than a third of total wheat output to supply subsidised food to the
poor. It has recently expanded its food welfare programme to feed 70% of its 1.2 billion
population.
Purchases by the state-run Food Corporation of India make the government the biggest
hoarder of the grain. As a result, open market prices have remained high despite bumper
harvests, giving farmers good returns on wheat.
"If we do not see any pest attack, unseasonal rains and higher temperatures in February-
March, we see farmers getting good yield on their average (annual) planting of nearly 29
million hectares," Sharma said.
BRIMMING
Indian reservoirs are brimming after this year's 6% higher than average monsoon rains. That
means lower irrigation costs and less use of diesel for pumps, helping the government in its
fight to curb fuel use in the world's fourth-biggest energy consumer.
To cash in on good soil moisture, farmers are also likely to plant more area with the main
winter-sown oilseed rapeseed, as well as chickpeas. The latter, known locally as chana, is the
most popular edible pulse in India, used in everything from curries to samosa.
"I am putting in 10 acres of land under chana as against 8 acres last year because the weather
is conducive and yields are expected to be higher," said Keshav Prasad Rathi, a farmer-cum-
trader from Akola in western Maharashtra, India's No.2 chickpea growing state.
Farmers and traders said the next chickpea harvest would be near the record levels of 8.8
million tonne produced in the crop year to June 2013. That is good news for India which has
to rely on Canada, Myanmar and Australia for around 2.5-3.5 million tonne of imports of
protein-rich pulses.
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If weather conditions do not change abruptly, rapeseed production should exceed the 7.82
million tonne harvested in the previous year, said a Mumbai-based industry official.
Higher output of rapeseed, which has the highest oil content among India's nine main
oilseeds, will help cut imports by the world's biggest vegetable oil importer.
But any major jump in output would also depress oilseed and cooking oil prices, reducing
growers' returns on the crop. Unlike wheat, the government does not buy oilseeds from
farmers and promises to intervene only when prices fall below a support price fixed by the
farm ministry
NABARD launches warehousing scheme for advancing direct loans (ET 25.10.13)
NABARD has launched a NWS to advance loans to Public and Private sector for creation of
storage infrastructure with a corpus of Rs 5,000 crore during 2013-14
National Agriculture Bank And Rural Development has launched a Warehousing Scheme (
NWS) to advance loans to Public and Private sector for creation of storage infrastructure with
a corpus of Rs 5,000 crore during 2013-14.
"A dedicated scheme for providing assistance for creation of storage infrastructure with a
corpus of Rs 5,000 crore has been introduced, pursuant to announcement made by Union
Finance minister in current year's budget and the scheme has been named as 'NABARD
Warehousing Scheme' 2013-14," Padma Ragunathan, Chief General Manager, HP Region
told reporters here today.
Under the scheme, direct loans would be advanced to Public and Private sector for
construction of Warehouses, Silos, cold storages and cold chain infrastructure.
She elaborated that the storage infrastructure projects of state government, state government
undertaking, Cooperative, Federations, APMC's state level boards, private companies and
private entrepreneurs will be provided loans under this scheme.
This fund will be utilised to bridge the gap between required and available capacity for
scientific storage of agricultural produce in the state.
CGM stated that Himachal has limited requirement of rural godowns for foodgrain storage
but being a horticulture state, producing apple and other fruit crops, there is an urgent need
for creating adequate cold chain infrastructure including cold storages, close to production
areas to minimise post harvest losses and ensure remunerative prices to the growers.
She urged the private companies, entrepreneurs and cooperatives to participate in the scheme
to help build storage infrastructure in the state.
Padam further informed that funds under this scheme would be utilised for meeting the
growing demand for storage capacity for agricultural commodities in the entire country and
also in the wake of enactment of National Food Security Act 2013.
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AGRI COMMODITY/ FOOD PRICES
World food prices drop to lowest in 3 years (BS: 03.10.13)
An index of 55 food items tracked by the FAO fell to 199.1 points from a revised 201.4 in
August
World food prices fell for a fifth month in September to the lowest level in three years, with
grain prices sliding as production of corn and rice is expected to exceed demand.
An index of 55 food items tracked by the FAO fell to 199.1 points from a revised 201.4 in
August, the Rome-based United Nations agency wrote in an online report today. The gauge is
down from a record 237.9 points in February 2011 and at the lowest level since September
2010.
The decline in food prices was driven by a 6.1 per cent drop for grains, as all other
components of the index rose, led by sugar, the FAO said. Global corn production will jump
to 943.2 million tonnes (mt) in 2013-14 from 862.9 mt in the previous period, the
International Grains Council forecast last week.
"The sharp decline in September follows an already sizable drop registered in the previous
two months, reflecting a generally favorable supply outlook, particularly for maize and rice,"
the FAO said, using another name for corn.
The FAO's grain price index fell to 197.7 points last month after sliding 7.5 per cent to 210.6
in August, slipping to the lowest level since August 2010.
In a separate report, the FAO cut its outlook for 2013 world grain production by 3.1 mt to
2.49 billion tonnes on a reduced outlook for wheat output, still rising 7.7 per cent from 2.31
billion tonnes in 2012. The wheat outlook was lowered by 5.2 mt to 704.6 mt.
International wheat prices were mostly unchanged from August on rising demand and a
reduced outlook for harvests in Southern Hemisphere growers, according to the FAO.
Sugar
The FAO's sugar index rose 1.8 per cent to 246 points, after unfavorable weather hampered
harvesting in the center-south region of Brazil, the world's largest producer of the sweetener.
Rising demand in India due to festive seasons provided short- term price support, the UN
agency wrote.
An index of meat prices advanced 0.9 per cent to 175.7 points, while the FAO's gauge for
cooking oils and fats added 0.4 per cent to 186.3 points. The dairy price index gained 0.7 per
cent last month to 240.7.
The global food-import bill will probably be stable this year at $1.094 trillion as cheaper
sugar and cooking oil make up for rising prices of dairy, fish and meat, the FAO predicted in
June.
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Food prices to remain volatile: FAO (BS: 08.10.13)
Says world's food price problems are not over despite a current market lull.
Food prices are expected to remain volatile globally over the next few years and countries
including India will have to adapt to the volatility, UN body Food and Agriculture
Organization has said.
"International prices have declined but they are still above their historical levels. And prices
are expected to remain volatile over the next years," FAO Director-General Jos Graziano da
Silva warned at a ministerial meet on international food prices held in Rome yesterday.
The world's food price problems are not over despite a current market lull, he said in an
official statement.
Graziano da Silva further said that the two critical issues for countries to address are how to
help poor small- scale farmers benefit from the higher food prices, and how to protect low-
income families who suffer as a result of them.
"The current situation offers an opportunity for farmers to reinvest in agriculture," he said,
calling for a right set of policies to ensure that small-scale farmers have the means to take
advantage of it.
He said low-income families must be shielded by strengthening social protection
programmes, including cash transfers to extremely poor households, and creating new ways
to link social protection and support for agricultural production.
Stating that the outlook for international food commodity markets finally looks calmer this
year, the FAO chief said: "Grain production has rebounded and higher stock-to-use ratios
should bring greater stability to prices. The FAO Cereal Price Index is 20% lower than one."
Although prices have stabilised, he cautioned against dropping the guard.
He also underscored that while lower food prices brought relief to poor consumers, higher
prices were not necessarily all bad news as they came after three decades of stagnant prices
that negatively affected the agricultural sector in many poor countries.
He urged countries to take advantage of the comparative calm to prepare for future market
turbulence and find lasting solutions to the issues surrounding food price volatility.
According to the FAO, the improved global governance has played an important role in
warding off additional food price spikes since July 2012.
In particular, the Agricultural Market Information System (AMIS) created by the G20 in
2011 has proved an effective new weapon in the arsenal to fight against excessive price
volatility, providing reliable information and increasing transparency in the international food
market, it added.
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India, ASEAN to look at ways to address food price volatility (ET: 10.10.13)
To address the issue of volatility in food prices, India and ASEAN countries will share their
expertise to boost their food security planning activities. The issue was discussed at the 11th
India-ASEAN Summit held here today.
Sultan of Brunei Haji Hassanal Bolkiah, who chaired the Summit, in a statement said
ASEAN leaders welcomed India's 'Look East Policy' within the framework of their strategic
partnership.
"We took note of the enhancement and strengthening of co-operation on food security
through the widening of food production base and exchange of expertise between ASEAN
and India to enhance resilience in food security planning to address price volatility of food
commodities," he said.
Prime Minister Manmohan Singh addressed the summit and said that over two decades, India
and ASEAN have established a comprehensive agenda of cooperation and a wide-ranging
framework to pursue it.
"Today, we stand on the threshold of the third decade of our engagement. In keeping with our
substantial achievements, the recent elevation of our ties to a strategic partnership and the
rich potential of our cooperation," he said.
ASEAN (Association of South East Asian Nations) is a grouping of ten nations -- Brunei,
Indonesia, Malaysia, Myanmar, Singapore, Thailand and Vietnam.
Leaders from the region also encouraged India to support the implementation of the roadmap
for an ASEAN Community (2009-15). Besides, they asked India to contribute to ASEAN
Community Post-2015 Vision, among others.
Higher vegetable prices push retail inflation up to 9.84 pct in Sept (FE: 14.10.13)
Retail inflation for rural and urban areas in September stood at 9.71 pct and 9.93 pct,
respectively.
Retail inflation rose marginally to 9.84 per cent in September, mainly due to a hike in food
prices, particularly of vegetables.
Retail inflation measured in
terms of consumer price index
(CPI) was at 9.52 per cent in
August.
Retail inflation for rural and
urban areas in September stood
at 9.71 per cent and 9.93 per
cent, respectively. The same was
8.93 per cent and 10.32 per cent
(revised figures) in August.
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Vegetable price rose by 34.93 per cent in September as compared to 26.48 per cent in
August.
Similarly, fruit prices shot up by 9.33 per cent to 5.19 per cent.
Inflation in the food and beverages segment rose by 11.44 per cent in the month under review
as against 11.06 per cent in August.
For CPI inflation, price data are collected from select towns by the National Sample Survey
Organisation (NSSO) and from select villages by the Department of Posts.
Earlier in the day, the official data revealed that the inflation measured in terms of wholesale
price index rose for the fourth straight month to 6.46 per cent in September, mainly due to
higher prices of onion and other vegetables and fruits.
Onion prices drive retail, wholesale inflation in Sept (BS: 15.10.13)
To weigh on RBI's stance later this month.
The high prices of onions drove Wholesale Price Index (WPI)-basedinflation to a seven-
month high of 6.46 per cent in September, against six per cent in August. During the same
period, Consumer Price Index (CPI)-based inflation rose from 9.52 per cent to 9.84 per cent,
according to data released on Monday.
This might dissuade the Reserve Bank of India (RBI) from focusing on growth at its
monetary policy later this month.
In September, WPI inflation for onions rose to 322 per cent, against 244 per cent increase in
August. As a result, food inflation soared to a three-year high of 18.4 per cent in September,
against 18.2 per cent in the previous month.
At the retail level, food prices rose 11.44 per cent, against 11.06 per cent in August.
“Consumer price inflation is correcting the huge gap we had witnessed in food items at the
retail and wholesale levels in the previous months,” said Soumya Kanti Ghosh, chief
economist at State Bank of India. In the past few months, CPI inflation had declined, while
WPI had risen.
The gap between food inflation according to WPI and CPI was still high — 700 basis points
— and this would lead to a further rise in retail inflation, Ghosh said, adding it could even
touch double digits in the coming months. “There is a high possibility of that happening,” he
said.
For the quarter ended September, WPI inflation stood at 6.13 per cent, against 4.83 per cent
in the previous quarter. Average CPI inflation stood at 9.6 per cent, compared with 9.5 per
cent in the quarter ended June.
Economists said there were high chances RBI would consider raising the repo rate in its
monetary policy review at the end of this month. “We expect a rise of 25 basis points,” said D
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K Joshi, chief economist, CRISIL.
Ghosh said the central bank would consider raising the repo rate by 25 basis points to 7.75
per cent. At its mid-term policy review last month, RBI had raised the rate by 25 basis points
to 7.5 per cent.
WPI inflation for manufactured items remained stood at 2.03 per cent in September, against
1.9 per cent price rise in the previous month. Core inflation — inflation for manufactured
items sans food articles — for September stood at 2.1 per cent, against 1.94 per cent in
August.Industry has been urging RBI to cut the policy rate to boost economic growth, which
fell to a four-year low of 4.4 per cent in the quarter ended June 2013.
Wholesale prices of petrol rose 9.64 per cent in September, against 3.18 in August. During
the same period, fuel inflation fell to 10.08 per cent from 11.34 per cent. Economists expect
WPI inflation to exceed the seven per cent mark in the months ahead.
“This would start correcting only after December, around the time of the general elections,
when food prices may come down,” said Ghosh.In September, while CPI-based inflation
eased in cities, it accelerated in villages. For urban areas, it stood at 9.93, against 10.32 a
month ago; for rural regions, it stood at 9.71 per cent, compared with 8.93 per cent in August.
Earlier, RBI had raised concern at the rising retail inflation, saying this was “eroding
consumer and business confidence”.
Food inflation may linger despite good monsoon: India Ratings (BL: 15.10.13)
Despite favorable impact of monsoon, the sharp decline in overall inflation is unlikely in near
future, rating agency India Ratings & Research said today.
Headline inflation, on y—o—y basis, increased to 6.5 per cent in September 2013 from 6.1
per cent a month ago, led by inflation in primary food products (18.4 per cent) and fuel and
power (10.1 per cent).
Even the consumer price index based inflation for September 2013 escalated to 9.84 per cent
as compared with 9.54 per cent in August 2013, India Ratings said in a report.
Wholesale inflation in September increased by 0.36 percentage points over August 2013.
Fruits and vegetables, and crude petroleum contributed 71.2 per cent and 21.4 per cent,
respectively, to the increase in wholesale inflation in September 2013.
Fruits and vegetables inflation increased to 49.1 per cent in September from 42.4 per cent in
August 2013 and crude petroleum inflation increased to 6.1 per cent in September 2013 from
a deflation of 2.5 per cent in August 2013.
Quoting no change in RBI policy stance, India Ratings said that reversal in inflation
trajectory has reduced the Reserve Bank’s elbow room to ease policy rates.
Over the next few quarters, the agency expects the spread between MSF and repo rate to
revert to the normal 100 basis points.
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Economy moving towards stagflation: CII survey of CEOs (BS 15.10.13)
Stagflation is a situation where economic growth is too low, inflation too high, leading to
steady high unemployment
The Confederation of Indian Industry (CII) said on Monday that its survey of CEOs indicated
the economy was moving towards stagflation.
“Indicating that the economy is moving towards a situation of stagflation, majority of the
respondents (42 per cent) expected inflation to increase moderately in the second half of the
year,” CII said in a statement.
Stagflation refers to a situation where economic growth is too low and inflation is too high,
leading to high unemployment levels. The situation indicates a dilemma for policymakers,
since actions designed to cut inflation may aggravate unemployment.
CII, however, did not elaborate why it dropped the word stagflation, as the respondents only
talked about a moderate rise in inflation.
According to data released on Monday, inflation in both wholesale and retail counters rose
for the month of September, driven by vegetable prices, particularly onions. Inflation stood at
6.46 points in Wholesale Price Index (WPI) terms, and 9.84 per cent on Consumer Price
Index basis.
Most CEOs in the survey joined the league of independent analysts doubting the
government's optimism over the economy clocking more than five per cent economic growth
this financial year.
However, 32 per cent of them shared the government's projections. These respondents said
the economy would register five to 5.5 per cent growth, while 42 per cent voted for 4.5 to
five per cent. Notably, CII Director-General Chandrajit Banerjee did not rule out over five
per cent economic growth in 2013-14. “We believe five per cent-plus growth is still not out
of reach. With a significant improvement expected in the growth of agriculture output in the
current year, we hope to see an upswing in the sectors, which have traction from rural
demand.”
Sixty-five per cent of the respondents said they did not expect revival in investments before
the second quarter of FY15. Political uncertainty was ranked as the highest risk factor
affecting the business confidence of India Inc, according to CII’s CEO snap poll, conducted
at its National Council Meeting. Commenting on the efficacy of the Cabinet Committee on
Investment (CCI) in clearing large projects, 56 per cent of the respondents did not feel it had
the intended impact on investments at the ground level.
“This clearly implies there is a need for strengthening policy intervention to revive
investment demand by the government as well as RBI. Among other critical measures, the
government should be focusing on stepping up its capital expenditure whereas RBI should be
adopting a softer monetary stance,” added Banerjee.
With WPI inflation rising to a seven-month high in September, and the retail price inflation
breaking a two-month downward trend, RBI might not agree to Banerjee's demand.
In an indication of easing current account deficit situation, 82 per cent of the respondents felt
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the value of rupee against the US dollar was favourably affecting their exports. Contrary to
the expectation that low rupee will lead to increase in their import bill, 53 per cent of the
business leaders felt their imports will remain unchanged during the second half of the year.
Going forward, a majority (53 per cent) of the respondents expected the rupee to prevail
below 62 against the dollar by the end of the current financial year.
Exports grew in double digits for the third straight month in September.
Most of the respondents (37 per cent) expected their credit demand will remain unchanged
during the second half of FY14. Similarly, 50 of the business leaders did not see any
perceptible change in their investment level during the second half of this year.
In the survey, 50 per cent of the respondents expected their sales and exports to grow
moderately during the second half of this financial year. A majority of the respondents
thought profit margin would decline because of pressure from hardening of input prices.
With eye on inflation, govt keeps lid on MSP hikes of winter crops (FE: 18.10.13)
Government has raised the MSPs of various crops in the range of 30% to 91% in the last five
years
Despite elections being around the corner, the government on Thursday put the brakes on the
recent years’ practice of hefty hikes in benchmark prices of farm commodities, which has
inflated the food subsidy bill, and announced moderate price increases for winter crops. The
minimum support prices (MSPs) of wheat and mustard, the key rabi crops, were upped by
3.7% and 1.7%, respectively, while the maximum hike was 12.24% for barley.
Relentless increases in the MSPs for kharif and rabi crops over the last five years have led to
higher disposal incomes with rural households, spurring consumption, but also fanning
inflation, especially of food items, due to the increased demand. The government has raised
the MSPs of various crops in the range of 30% to 91% in the last five years.
“We are concerned about inflation and we can control prices of grains which we procure
(with R50 hike in the wheat price),” food minister KV Thomas said after a meeting of the
Cabinet Committee on Economic Affairs (CCEA), without elaborating.
The CCEA on Thursday decided to raise the benchmark wheat price by R50, or 3.7%, to
R1,400 a quintal for the year through June. It, however, rejected a proposal by the agriculture
ministry to raise the MSP of wheat by R100, or 7.4%, to R1,450 and instead accepted
recommendations of the Commission For Agricultural Costs and Prices (CACP).Analysts
said the “mild” hike in the wheat MSP is basically to balance the interests of farmers with
consumers as well as of the government.
"The 3.7% hike in the wheat MSP is a cautious step by the government and it could have a
mild impact on food inflation. The food subsidy bill will, of course, rise but the pace of rise
in the bill may not surge significantly as the food security Bill is expected to be rolled out
from next fiscal only," said DK Joshi, chief economist at Crisil.
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While there was no official statement, ostensibly because the government may have to seek
clearance from the Election Commission due to assembly polls scheduled for five states, a
senior official said the CCEA had approved all the CACP recommendations on prices. Since
official wheat procurement will start from April next year after the crop is harvested, the
impact on the food subsidy bill will mainly be felt in the next fiscal, although the benchmark
prices tend to influence the current price in the open market, analysts said.
The CACP had also suggested that the MSP of mustard seeds be raised by Rs 50 to Rs 3,050
per quintal, barley by Rs 120 to Rs 1,100 a quintal, gram by Rs 100 to Rs 3,100 a quintal,
lentil by Rs 50 to Rs 2,950 a quintal, and safflower by Rs 200 to Rs 3,000 a quintal for the
rabi marketing season.
CARE Ratings chief economist Madan Sabnavis said that while the hike in the MSP can be
inflationary, the government has reduced the quantum of the rise this year, compared with
around a 16% hike in 2012-13.
Average food inflation in the first half of this fiscal remained elevated at 12.24%. Although
onion and vegetables were the prime drivers of food inflation this fiscal, the price rise in rice
stood at 19.34% and wheat at 11.16%. The latest hike will further raise wheat prices, albeit
mildly, and lead to higher inflation, analysts said.
Trade executives say that if grain prices remain subdued due to adequate stocks and a good
harvest, the government will be forced to procure more from farmers to avoid distress sales,
worsening its subsidy bill.
The government has budgeted the food subsidy bill for 2013-14 at Rs 90,000 crore, although
official sources said it could exceed the Rs 1 lakh crore level even if the food security Act
isn't implemented, thanks to a 4.6% rise in paddy prices already witnessed, said a government
official.
The government's food subsidy bill rose 16.7% to Rs 85,000 crore last fiscal while the budget
estimate was Rs 75,000 crore. Once the food security Act, which aims to provide legal
entitlement for subsidised grains to around three-fourths of the country's population, is
implemented throughout the country, the food subsidy burden is expected to hit around Rs
1,25,000 crore.
Meanwhile, farmers are opposed to the “paltry” hike in prices, saying it does not cover even
the cost of production due to a spike in inputs and labour costs.
Onion prices soar on reduced arrivals (BS 19.10.13)
On Sept 17, onion prices had touched an all-time high of Rs 5,501 a quintal. On Oct 10, these
fell to Rs 2,750 a quintal
Onion prices have surged to Rs 5,229 a quintal at wholesale markets in Maharashtra. Within
a fortnight, the prices have risen by about Rs 2,500 a quintal.
On September 17, prices had touched an all-time-high of Rs 5,501 a quintal. On October 10,
these fell to Rs 2,750 a quintal.
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Sources said farmers weren’t bringing onions to the markets, adding arrivals had fallen
substantially, despite the peak season.
“The arrivals are lower by more than 50 per cent, against a normal year. Farmers are not
bringing stocks in anticipation of higher prices,” said a trader from Ahmedabad, where prices
were being quoted at Rs 5,500-6,000 a quintal in the wholesale market.
At Lasalgaon, India’s largest onion market, arrivals stood at about 1,000 quintals on Friday,
against 20,000 quintals a year earlier. Insiders said intermittent rains in growing regions had
hit onion harvest and adversely affected the supply chain.
“Through the past few months, Maharashtra, Madhya Pradesh and Karnataka have recorded
intermittent rains. This has affected the harvest and transportation. Therefore, we are seeing
low arrivals in the market,” said R P Gupta, director, National Horticultural Research and
Development Foundation.
“Onion prices had fallen in recent days. Suddenly, these have surged. But that is for a limited
period. We will see prices falling from next week,” he added.
The high prices have led to concern for the government. In September, Wholesale Price
Index-based food inflation stood at 18.4 per cent. With onion prices rising again, it is feared
inflation would surge. Sources say fresh arrivals have started in various markets, including
Delhi and Mumbai.
Blame high onion prices on supply-side problems: Rangarajan (BS: 24.10.13)
Prime Minister's key economic advisor says the impact on inflation would not last long
Prime Minister's key economic advisor C Rangarajan today attributed the spiralling prices
of onions to supply constraints and said it will have only a temporary impact on inflation.
"In case of onion and vegetables, it is the supply factor which has been responsible for the
push-up in prices. We need to take action on the supply side, increase availability and see that
market mechanisms are improved and availability or existing supply is evenly distributed to
consumers," he said.
Rangarajan, who was answering questions on onion prices touching Rs 100 per kg in some
cities, said the impact on inflation would not last long.
"It may not have a permanent effect. It may have a temporary effect on inflation," the
Chairman of the Prime Minister's Economic Advisory Council (PMEAC) said.
Inflation as measured by the wholesale price index rose to a seven-month high of 6.46 per
cent in September. Food inflation was at 18.40 per cent, led by spiralling onion prices.
Inflation in onions skyrocketed 323 per cent in September.
Rangarajan said: "There can always be a temporary increase in inflation. But once the
availability increases, it is expected that supply will get augmented in coming weeks and then
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it will come down."
Agriculture Minister Sharad Pawar said there is a "temporary" shortage of onions and prices
are expected to fall in the next 2-3 weeks.
Echoing similar views, Commerce Minister Anand Sharma said there is no scarcity of onions
in the country and prices are expected to stabilise in the coming few weeks.
‘Onion price rise will have temporary effect on inflation’ (BL: 24.10.13)
Rangarajan sticks to 5.3% GDP growth for FY13-14
Spiralling onion prices may have brought tears to the eyes of a common man, but this will not
have a permanent effect on inflation, according to C. Rangarajan, Chairman of the Prime
Minister’s Economic Advisory Council (PMEAC).
Much of the price rise in onions and vegetables is due to supply constraints and will have
only a temporary impact on inflation, Rangarajan said here on Thursday.
“In case of onion and vegetables, it is the supply factor which has been responsible for the
push-up in prices. We need to take action on the supply side, increase availability and see that
market mechanisms are improved and availability or existing supply is evenly distributed to
consumers,” he said.
Rangarajan was responding to a question on onion prices touching Rs 100 a kg in some cities.
“It may not have a permanent effect. But, it may have a temporary effect on inflation,” he
said,
The wholesale price index-based inflation rose to a seven-month high of 6.46 per cent in
September. Food inflation was at 18.40 per cent, led by spiralling onion prices. Onion prices
surged 323 per cent in September on a year-on-year basis. “There can always be a temporary
increase in inflation. But once the availability increases…it is expected that supply will get
augmented in coming weeks and then it will come down,” Rangarajan said.
Meanwhile, Agriculture Minister Sharad Pawar said there is a “temporary” shortage of
onions and prices are expected to fall in the next two-three weeks.
BULLISH ON GROWTH
Describing IMF and World Bank’s recent downward revision of India GDP growth forecast
as “unduly pessimistic”, Rangarajan expressed optimism over economy recording 5-5.5 per
cent growth this fiscal.
This is consistent with the PMEAC’s recent move to peg the economic growth forecast for
current fiscal at 5.3 per cent.
“I know that several international agencies have forecast numbers that are below this number
(5.3 per cent). However, I continue to maintain that it will be 5.3 per cent,” Rangarajan said
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after inaugurating a two-day international conference on financial inclusion and payment
systems here on Thursday.
The International Monetary Fund (IMF) had in its latest world economic outlook (WEO)
estimated India’s economic growth for current fiscal at 4.25 per cent (at factor cost) and 3.8
per cent ( according to market prices).
The World Bank had few weeks later revised downward the GDP growth rate to 4.7 per cent
from 6.1 per cent projected earlier.
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AGRICULTURAL FUTURES PRICES
Crude palm oil down 0.9% on weak overseas cues (BS: 26.09.13)
Palm oil prices for delivery in September declined by 0.61%
Crude Palm oil prices fell by 0.98% to 522.70 per 10 kg in futures trade today on selling by
speculators and adequate stocks position in the spot market amid a weakening overseas trend.
At the Multi Commodity Exchange, crude palm oil for October delivery fell by Rs 5.20, or
0.98%, to Rs 522.70 per 10 kg, with a trade volume of 229 lots.
Similarly, oil prices for delivery in September declined by Rs 3.30, or 0.61%, to Rs 531.50
per 10 kg, with a trading volume of 100 lots.
Traders said selling by speculators amid a weakening overseas trend and adequate stocks
position in domestic markets mainly weighed on crude palm oil prices in the futures trade.
In Malaysia, palm oil declined to the lowest level in more than six weeks as a fall in crude
prices reduced the appeal of vegetable oils as biofuel feedstock and the pace of exports
slowed, the second-biggest producer.
Meanwhile, palm dropped 1.10% to 2,268 706 dollar a metric ton on the Malaysia
Derivatives Exchange.
Chana down 1.5% on subdued demand, higher output hopes (BS: 27.09.13)
Chana for November delivery declined by 1.2%
Chana prices fell by Rs 46 to Rs 2,962 per quintal in futures trade today as speculators
reduced positions due to subdued spot demand amid higher output hopes.
At the National Commodity and Derivatives Exchange, chana for October delivery fell by Rs
46, or 1.52%, to Rs 2,962 per quintal, with an open interest of 1,49,520 lots.
Chana for November delivery declined by Rs 38, or 1.22%, to Rs 3,061 per quintal, with an
open interest of 76,420 lots.
Traders said besides subdued demand and mounting stocks, hopes of higher output mainly
put pressure on chana futures prices.
Sugar down 0.2% on ample supply (BS: 30.09.13)
Sugar for delivery in November traded lower by 0.03%
Sugar prices slid 0.28% to Rs 2,870 per quintal in futures trade today as speculators reduced
their positions, driven by sluggish demand in the spot market against ample supplies from
producing regions.
At the National Commodity and Derivatives Exchange, sugar for delivery in October fell by
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Rs 8, or 0.28% to Rs 2870 per quintal, with an open interest of 7,330 lots.
Similarly, sugar for delivery in November traded lower by rupee 1, or 0.03% to Rs 2890 per
quintal in 24,160 lots.
Market analysts said speculators reduced their positions on the back of sluggish demand in
the spot market, against ample supplies from producing regions, mainly led to fall in sugar
prices at futures trade.
Refined soya down 1.3% on sluggish demand (BS 4.10.13)
Oil for delivery in October declined by 0.57%
Refined soya oil prices moved down by 1.33% to Rs 678.15 per 10 kg in futures trading
today as speculators reduced their holdings due to sluggish demand in the spot market against
adequate stocks position.
At the National Commodity and Derivatives Exchange, refined soya for delivery in
November fell by Rs 9.15, or 1.33%, to Rs 678.15 per 10 kg with an open interest of 64940
lots.
Similarly, oil for delivery in October declined by Rs 3.95, or 0.57% to Rs 690.35 per 10 kg in
57040 lots.
Analysts said speculators reduced their positions on the back of sluggish demand in the spot
market against adequate stocks position mainly kept pressure on refined soya oil prices at
futures trade.
Sugar up 0.3% on spot demand (BS: 04.10.13)
Sweetener for delivery in November gained 0.28%
Sugar prices rose by Rs 9 to Rs 2,873 per quintal in futures trade today as speculators
enlarged positions on expectations of a rise in demand during the festive season.
At the National Commodity and Derivatives Exchange, sugar for delivery in October rose by
Rs 9, or 0.31%, to Rs 2,873 per quintal with an open interest of 5,810 lots.
Similarly, sugar for delivery in November gained Rs 8, or 0.28%, to Rs 2,901 per quintal in
28,110 lots.
Market analysts said fresh positions built up by speculators on expectations that the demand
for the sweetner will pick up during the festive season mainly attributed rise in sugar prices at
futures trade.
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Potato up 0.9% on spot demand (BS: 04.10.13)
Potato for delivery in April moved up by 0.88%
Potato prices recovered by 0.90% to Rs 838.50 per quintal in futures trade today as
speculators created fresh positions on hopes of a pick-up in demand at spot markets ahead of
"Navratras" festival.
At the Multi Commodity Exchange, potato for delivery in March recovered by Rs 7.50, or
0.90% to Rs 838.50 per quintal in business turnover of 31 lots.
The potato for delivery in April also moved up by Rs 7, or 0.88% to Rs 802 per quintal in 7
lots. Analysts said fresh positions created by speculators on expectations that the demand in
the spot markets might pick up for the 'navratras' festive beginning tomorrow, influenced
potato prices at futures trade.
Chana up 1.5% on rising demand (BS: 07.10.13)
Chana prices for delivery in October traded higher by 1.41%
Chana rose by Rs 47 to Rs 3,056 per quintal in futures trade today as traders enlarged their
holdings on rising demand in the spot market.
Restricted arrivals of the commodity in the physical market against festival buying somehow
capped the gains.
At the National Commodity and Derivatives Exchange, chana for delivery in November rose
by Rs 47, or 1.56%, to Rs 3,056 per quintal, with an open interest of 84,700 lots.
Similarly, chana prices for delivery in October traded higher by Rs 41, or 1.41%, to Rs 2,943
per quintal, with an open interest of 91,860 lots.
Traders said speculators increasing their holdings on hopes of rise in spot market demand
against restricted arrivals on reports of damage of crop in Gujarat due to heavy rains mainly
supported the uptrend.
Soybean up 1.6% on global cues (BS 7.10.13)
Marketmen said traders enlarging their positions influenced by a firming global trend,
pushed up soybean prices at futures market
Soybean prices rose by Rs 58 to Rs 3,537.50 per quintal in future trade today on increased
buying in line with firming overseas cues.
Marketmen said traders enlarging their positions influenced by a firming global trend, mainly
pushed up soybean prices at futures market.
At the National Commodity and Derivatives Exchange, soybean for current October contract
improved by Rs 58, or 1.67% to Rs 3,537.50 per quintal with an open interest of 37,900 lots.
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Most active near November contract hardened by Rs 45.50, or 1.30% to Rs 3,546 per quintal,
having an open interest of 1,32,590 lots.
Maize down 1.6% on rising inventories (BS: 08.10.13)
December contract weakened by 1.53%
Maize prices declined by Rs 20 to Rs 1,212 per quintal in futures trade today as traders
offloaded their holdings in the wake of weak domestic and overseas markets sentiment.
Marketmen said fresh supply of new crops in the markets increased the stockpiles and put
pressure on the prices.
Fall in its prices at global markets also influenced the market sentiment, they said.
At the National Commodity and Derivatives Exchange, maize prices for most active near
November month fell by Rs 20, or 1.62%, to Rs 1,212 per quintal, with an open interest of
34,190 lots.
December contract weakened by Rs 19, or 1.53%, to Rs 1,222 per quintal, clocking an open
interest of 10,580 lots.
Current October contract eased by Rs 12, or 0.92%, to Rs 1,296 per quintal, depicting an
open interest of 9,480 lots.
Chana up 2.3% on rising demand (BS: 9.10.13)
Chana prices for delivery in October traded higher by 1.47%
Chana rose by Rs 72 to Rs 3,140 per quintal in futures trade today as traders enlarged
holdings on rising demand in the spot market.
Restricted arrivals of the commodity in the physical market, tracking a pick-up in festival
demand.
At the National Commodity and Derivatives Exchange, chana for delivery in November rose
by Rs 72, or 2.34%, to Rs 3,140 per quintal, with an open interest of 1,09,190 lots.
Similarly, chana prices for delivery in October traded higher by Rs 44, or 1.47%, to Rs 3,020
per quintal, with an open interest of 61,180 lots.
Traders said speculators increased their holdings on hopes of rise in spot market demand
against restricted arrivals of the commodity in the physical market.
They said increased enquiries from millers at lower levels against fall in supplies from the
producing regions of Gujarat and Rajasthan further supported the uptrend.
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Mustardseed up 1.2% on firm spot sentiments (BS: 9.10.13)
Most active near November contract advanced by 0.89%
Musterseed prices strengthened by Rs 45 to Rs 3,713 per quintal in futures trade today
following traders buying in line with firm physical cue.
Marketmen said the rise in mustardseed prices mainly attributed to rise in spot demand from
vanaspati ghee making units due to festive seasons.
At the National Commodity and Derivatives Exchange, mustardseed for far January contract
shot up by Rs.45, or 1.23% to Rs.3,713 per quintal, with an open interest of 2,340 lots.
Most active near November contract advanced by Rs.32, or 0.89% to Rs.3,635 per quintal,
having an open interest of 36,960 lots.
Current October contract rose by Rs 29, or 0.82% to Rs 3,568 per quintal in 16,130 lots.
Mustardseed up 1.3% on renewed buying (BS 11.10.13)
Commodity for November contract rose by 1.22%
Mustardseed prices rose by Rs 48 to Rs 3,732 per quintal in futures trading today following
sustained buying by traders in tandem with firm physical market sentiments.
Marketmen said strong demand in spot markets for the ongoing "Navratra" festivals mainly
encouraged traders to build long positions.
At the National Commodity and Derivatives Exchange, mustardseed for January contract
advanced by Rs 48, or 1.30%, to Rs 3,732 per quintal in an open interest of 2,900 lots.
Most active near November contract rose by Rs 44, or 1.22%, to Rs 3,646 per quintal, with an
open interest of 38,480 lots.
Current October contract also added Rs 18, or 0.51%, to Rs 3,549 per quintal in 10,830 lots.
Chana up 0.9% on high buying activity (BS: 11.10.13)
Chana prices for delivery in November traded higher by 0.73%
Chana prices rose by Rs 29 to Rs 3,032 per quintal in futures trade today as traders enlarged
holdings on rising demand in the market.
Expectations of a rise in demand for the ongoing 'Navratras' festival mainly supported the
uptrend, traders said.
At the National Commodity and Derivatives Exchange, chana for delivery in October rose by
Rs 29, or 0.96%, to Rs 3,032 per quintal, with an open interest of 31,530 lots.
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Similarly, chana prices for delivery in November traded higher by Rs 23, or 0.73%, to Rs
3,139 per quintal, with an open interest of 1,11,400 lots.
Chana down 1.1% on profit booking (BS 14.10.13)
Chana for October delivery fell by 0.87%
Chana prices fell by 1.16% to Rs 3,141 per quintal in futures trade today on profit booking by
speculators due to sluggish demand in the spot market.
At the National Commodity and Derivative Exchange, chana for November month declined
by Rs 37, or 1.16%, to Rs 3,141 per quintal with an open interest of 1,05,390 lots.
Similarly, chana for October delivery fell by Rs 27, or 0.87%, to Rs 3,050 per quintal with an
open interest of 13,470 lots.
Traders said sluggish demand in domestic market at existing higher prices and increased
arrivals from Rajasthan, mainly led to the fall in chana futures prices.
Maize prices up 1% on low levels buying (BS: 14.10.13)
Marketmen said fresh buying at existing lower levels by traders brought the upsurge in
futures prices.
Maize prices looked up by Rs 15 to Rs 1,391 per quintal in futures trade today following
fresh buying support at prevailing lower levels. Marketmen said fresh buying at existing
lower levels by traders mainly brought the upsurge in futures prices.
However, reports of bumper crops in maize growing regions on favourable monsoon rains
somewhat capped the gains, they said.
At the National Commodity and Derivative Exchange, maize for current October contract
resumed higher by Rs.15, or 1.09% to Rs.1,391 per quintal, with an open interest of 6,450
lots.
Most active near November contract gained by Rs.6, or 0.48% to Rs.1,257 per quintal, having
an open interest of 32,590 lots.
Chana up 0.9% on rising demand (BS: 16.10.13)
Marketmen said restricted arrivals in the physical market against rising demand influenced
the market sentiment
Chana rose by Rs 29 to Rs 3,159 per quintal in futures trade today as traders enlarged their
holdings on rising demand in the spot market.
Marketmen said restricted arrivals in the physical market against rising demand for the
festival season mainly influenced the market sentiment.
At the National Commodity and Derivatives Exchange, chana for delivery in November rose
by Rs 29, or 0.92%, to Rs 3,159 per quintal, with an open interest of 1,06,090 lots.
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Similarly, chana for delivery in October traded higher by Rs 28, or 0.92%, to Rs 3,070 per
quintal, with an open interest of 10,160 lots.
Arrival of imports turns outlook bearish for chana (BL: 22.10.13)
With arrivals outstripping demand, chana prices have begun to drop in Indore mandis over
the last few days.
In absence of demand, chana (kanta) in has declined by Rs 100 in the past one week with
price on Tuesday being quoted at Rs 3,000-3,050 a quintal (Rs 3,100-25 last week).
Chana (desi) declined by Rs 200 to Rs 2,700-2,800, chana (mausmi) ruled at Rs 3,000-3,300,
while Kabuli Bitki ruled at Rs 2,900-3,000.
With about 20,000-25,000 tonnes of imported consignment likely to arrive from Australia at
the Mumbai port, chana will come under further pressure, said Prakash Vora, a local
wholesale pulse trader.
With the sowing area expected to rise this year, stockists are releasing their inventories,
leading to a downtrend in prices.
Decline in spot chana, has also dragged its dal in the past one week almost by Rs 100 with
chana dal (average) in Indore mandis was being quoted at Rs 3,600-3,700, chana dal
(medium) at Rs 3,800-3,900, while chana dal (bold) ruled at Rs 4,100-4,200.
Slack demand and buying support have also dragged dollar chana both in the domestic and
export market.
Dollar chana (chickpea) was quoted at Rs 3,600-4,000 amid an arrival of 5,000 bags in Indore
mandis.
In container also, slack export demand has dragged dollar chana by almost Rs 300 with the
42/44 count at Rs 5,050-75 , 44/46 count at Rs 4,825-50, 46/48 count declined to Rs 4,625-
50, 58/60 count at Rs 3,750-75, while dollar chana (60/62 count) ruled at Rs 3,625-50 a
quintal.
Soybean up 2.3% on global cues (BS 23.10.13)
Near December contract gained 1.57%
Soybean prices rose by Rs 87.50 to Rs 3,807.50 per quintal in futures trading today on
increased speculators buying in tandum with firm global cues as well as spot market cues.
Marketmen said rise in its prices in overseas markets due to reports that the harvest will slow
because of cold, wet weather in central areas of the US, the world's biggest producer,
encouraged traders to raise holdings.
Pick up in demand in spot markets here also boosted the trading sentiments to some extent,
they said.
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At the National Commodity and Derivatives Exchange, soybean for March contract jumped
up by Rs 87.50, or 2.35%, to Rs 3,807.50 per quintal, in open interest of 1,980 lots.
Near December contract gained Rs 57, or 1.57%, to Rs 3,685.50 per quintal, clocking an
open interest of 93,660 lots.
Most active November contract surged by Rs 50.50, or 1.41%, to Rs 3,636 per quintal,
having an open interest of 1,07,750 lots.
Chana up 1% on rising demand (BS 23.10.13)
Commodity for delivery in November moved up by 1.02%
Chana prices added 1.03% to Rs 3,125 per quintal in futures market today as speculators
enlarged their holdings on rising demand in the spot market.
At the National Commodity and Derivatives Exchange, chana for delivery in December shot
up by Rs 32, or 1.03%, to Rs 3,125 per quintal with an open interest of 50,010 lots.
Similarly, the commodity for delivery in November moved up by Rs 31, or 1.02%, to Rs
3,068 per quintal in 1,04,970 lots.
Market analysts said speculators enlarged their positions on the back of rising demand in the
spot market supported by festive season mainly pushed up chana prices at futures trade.
Refined soya oil up 1% on strong demand (BS 23.10.13)
Oil for delivery in November traded higher by 0.75%
Refined soya oil moved up by 1.02% to Rs 712.30 per 10 kg in futures trade today as
speculators enlarged their positions, driven by strong demand in the spot market in view of
festive and wedding season.
At the National Commodity and Derivatives Exchange, refined soya for delivery in
December moved up Rs 7.20, or 1.02%, to Rs 712.30 per 10 kg with an open interest of
87,770 lots.
Similarly, the oil for delivery in November traded higher by Rs 5.30, or 0.75%, to Rs 716.45
per 10 kg in 10,070 lots.
Analysts said speculators enlarged their positions, supported by a strong demand in the spot
market due to festive and wedding season mainly led an upsurge in refined soya oil prices at
futures trade.
Soyabean up 2% on global cues (BS 24.10.13)
Most active November contract rose by 1.94%
Soyabean prices rose by Rs 79.50 to Rs 3,948 per quintal in futures trade today following
renewed buying by traders in line with firm overseas cues.
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Marketmen said rise in soyabean price in international markets, supported by low supply and
pick up in demand in physical markets, mainly improved sentiment here in future price of
soyabean.
At the National Commodity and Derivatives Exchange, soybean prices for March contract
spurted by Rs 79.50, or 2.06%, to Rs 3,948 per quintal, with an open interest of 1,990 lots.
Most active November contract rose by Rs 72, or 1.94%, to Rs 3,785.50 per quintal, clocking
an open interest of 95,650 lots.
Refined soya oil up 0.7% as demand picks up (BS 24.10.13)
Oil for delivery in December edged higher by 0.37%
Refined soya oil prices rose by 0.77% to Rs 730.55 per 10 kg in futures market today as
speculators created fresh positions on the back of pick up in demand in the spot market.
At the National Commodity and Derivatives Exchange, refined soya for delivery in
November rose by Rs 5.50, or 0.77%, to Rs 730.55 per 10 kg with an open interest of 90,170
lots.
Likewise, the oil for delivery in December edged higher by Rs 2.65, or 0.37%, to Rs 725.20
per 10 kg in 98,270 lots.
Analysts said speculators created fresh positions on the back of pick up in demand in the spot
market against limited arrivals from producing regions mainly led to rise in refined soya oil
prices at futures trade.
Chana up 0.5% on firm trend (BS 24.10.13)
Commodity for delivery in December gained 0.58%,
Chana prices extended gains for the third straight session by gaining 0.59% to Rs 3,081 per
quintal in futures trade today as speculators enlarged their positions, tracking a firm trend at
spot market.
At the National Commodity and Derivatives Exchange, chana for delivery in November shot
up by Rs 18, or 0.59%, to Rs 3,081 per quintal with an open interest of 1,03,940 lots.
Similarly, the commodity for delivery in December gained Rs 18, or 0.58%, to Rs 3,142 per
quintal in 52,060 lots.
Market analysts said speculators enlarged their positions, tracking a firming trend at spot
market on strong demand mainly led an upside movements in chana prices in futures trade.
Chana up 0.5% on firm trend (BS: 24.10.13)
Commodity for delivery in December gained 0.58%,
Chana prices extended gains for the third straight session by gaining 0.59% to Rs 3,081 per
quintal in futures trade today as speculators enlarged their positions, tracking a firm trend at
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spot market.
At the National Commodity and Derivatives Exchange, chana for delivery in November shot
up by Rs 18, or 0.59%, to Rs 3,081 per quintal with an open interest of 1,03,940 lots.
Similarly, the commodity for delivery in December gained Rs 18, or 0.58%, to Rs 3,142 per
quintal in 52,060 lots.
Market analysts said speculators enlarged their positions, tracking a firming trend at spot
market on strong demand mainly led an upside movements in chana prices in futures trade.