1

AgriNews: September 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 August 26, 2013 to September 25, 2013)

2

3

CONTENTS

Section Title Page No.

1 Highlights 5

2 Broad Sectoral Trends 9

3 Agricultural Policy 11

4 Rice 19

5 Wheat 27

6 Maize /Coarse cereals 33

7 Pulses 37

8 Edible Oils / Oilseeds 45

9 Milk 55

10 Vegetables – Potato/ Onions 59

11 Sugarcane / Sugar 67

12 Inputs 83

13 Other Agri / Farm News 87

14 Agricultural / Food Prices 111

15 Agricultural Futures Prices 119

Note: Newspapers covered: BL= Business Line, BS = Business Standard, ET= Economic

Times, FE= Financial Express

4

5

HIGHLIGHTS

Broad Sectoral Trends

PM's council pegs FY14 GDP growth at 5.3%. Says containing fiscal deficit at

4.8% will be challenging, RBI must maintain monetary stance till rupee stablises. (BS

13.9.13)

Agricultural Policy

Food Security Bill: Lok Sabha approves $20 bln cheap grain plan for poor. Under the plan, the government will sell subsidised wheat and rice to 67 percent of its

population of 1.2 billion. (FE: 27.8.13)

Government notifies food security law. Government has notified the landmark food

security legislation, giving a legal right on highly subsidised foodgrains to 67 per cent

of the country's population. (ET 15.9.13)

CCEA approves outlay of Rs 12,350 cr for NFSM in 12th Plan. To meet the

growing food demand, government today approved an allocation of Rs 12,350 crore

for boosting foodgrains production by 25 million tonnes under the National Food

Security Mission during the 12th Five Year Plan. (BS 20.9.13)

Rice

Weak rupee, strong demand likely to propel rice exports. Rising global demand

and the rupee’s devaluation against the US dollar are having a positive impact on the

country’s rice exports, estimated at more than R30,000 crore annually. (FE 5.9.13)

India likely to harvest record 107 mn tonnes rice in 2013-14: IGC. In the latest

report, the International Grains Council has projected India's rice production to touch

a new record at 107 million tonnes in 2013-14, against the demand of 97.9 million

tonnes for the same period. (ET 5.9.13)

Russia lifts ban on rice imports from India. Ban on peanut imports also removed;

exports of both commodities to resume with immediate effect. (BS: 7.9.13)

FDA probes arsenic presence in rice from India, other nations. The US health

watchdog FDA is conducting a detailed inspection of the arsenic level in rice being

sold in the American market, including those of basmati variety imported from India.

(ET: 8.9.13)

Wheat

Govt aims to earn $600 mn by exporting 2 mn tonne wheat: FCI Last year, govt earned $1.4 billion from export of 4.2 MT wheat by PSUs. Indian

wheat fetched an average price of $311.38 per tonne. (BS: 11.9.13)

India sets out to sell more wheat but keeps price high India last year had allowed

4.5 million tonnes of wheat for exports to be sold by the three state run companies

until June, 2013. Out of that, 4.2 million tonnes was sold, earning $1.4 billion for the

government. (ET 12.9.13)

6

Maize/Coarse Grains

Record crop likely in coarse cereals. Excess and even spread of rainfall during the

current monsoon could have brought smiles to the faces of farmers. But in the case of

coarse cereals, it is also bringing in an additional problem on the prospect of a higher,

if not a record, production. (BL 15.9.13)

Pulses

Pulses production set to touch record 18.45 mt (BL 29.8.13) Production of pulses

this year is likely to touch a record 18.45 million tonnes (mt), thanks to timely and

even coverage of the monsoon across the country.

World pulses market likely to be mixed on tight supplies (BL: 30.8.13) The

prospect for the world pulses market is likely to be mixed in 2013 with supplies

tightening slightly despite higher field pea production but smaller harvest of lentils

and nearly unchanged dry bean output.

PMEAC estimates record pulses, oilseeds output in 2013-14. Pulses output

expected to be over 20 mn tn in 2013-14(BS: 14.9.13)

Edible Oils and Oilseeds

India signs deals to export up to 400,000 tonnes new season soymeal. India has

sold 350,000 to 400,000 tonnes of new-crop soymeal for shipment between October

and December on prospects of higher soybean production and a weak rupee, an

industry official said. (ET 26.8.13)

18-fold jump in soyameal exports to 1.83 LT in Aug. Soyameal exports jumped

more than 18-fold to 1.83 lakh tonnes in August on strong demand and favourable

global rates, an industry body said today. (BS 6.9.13)

Oilseeds output set to rebound on higher acreage in groundnut, soya. According

to the Ministry of Agriculture, till September 6, oilseeds have been planted on 191.6

lakh hectares (lh) against 117.6 lh during the same period a year ago. (BL 11.9.13)

Edible oil imports may surge to 16 million tonnes in 2020/21. Edible oil imports

are likely to surge by 54 per cent to 16 million tonnes in 2020/21 as demand rises at a

much higher rate than local supplies. (ET 23.9.13)

Milk

Milk may cost more as weak rupee lifts export prospects. Consumers may soon

have to pay more for milk following short supply. Private dairies, which are exporting

milk powder and other products to cash in on a declining rupee, have raised the

procurement price by Rs 2 per litre to procure more milk. (ET 2.9.13)

Dairy market to grow by 13-15 pc till 2019-20: Report. The country's dairy market

will continue to grow at about 13-15 per cent annually till 2019-20, on increasing

7

consumption of value added products and the value chain becoming more and more

organised, according to a report by Rabobank. (ET 11.9.13)

Vegetables/ Onion /Potato

Onion production estimated to fall by 5 per cent in 2012-13: Sharad Pawar.

Country's onion output stood at 175.11 lakh tonnes (LT) in the crop year 2011-12,

while in the year 2012-13 production is estimated at 166.55 lakh tonnes (provisional),

Agriculture Minister Sharad Pawar said in a written reply in the Rajya Sabha. (ET:

27.8.13)

Onion prices rise despite arrival of imported stock. Onion prices shot up by 16 per

cent on Monday in major markets despite confirmation of the commodity’s import

from various sources to meet domestic demand. (BS 17.9.13)

Sugarcane/ Sugar

Sugar output to peak, set to worsen glut. The harvest will total 24.5 million tonnes

in the 12 months starting Oct. 1, compared with 23 million tons predicted in March

(BS: 11.9.13)

Sugar output revised up by 5.5 pc to 25 mn tonne in 2013-14. Country's sugar

production is seen higher than the demand for the fourth marketing year in a row.

(BS: 16.9.13)

Food Min to consider demand to remove sugar export limits. The Indian Sugar

Mills Association (Isma) wants export norms to be eased in view of the surplus

production expected next year and huge carry-over stock. (BS: 16.9.13)

CACP for marginal hike in cane FRP to Rs 220 per quintal for 2014-15. The

Commission for Agricultural Costs and Prices (CACP) has recommended a marginal

increase in the fair and remunerative price (FRP) for sugarcane to Rs 220 per quintal

for the 2014-15 sugar year (October-September). (ET: 23.9.13)

Inputs

Manufacturing pesticide for export, export norms to be relaxed. The liberalization

is aimed at making India hub for manufacturing pesticides especially those through

buying the technology from foreign companies. (BS: 24.9.13)

Other Agri Commodities/ Farm News

Good rain may push up FY14 farm GDP to 5-7%. It was only in 2010-11 that

agriculture growth touched 7.9% in recent years. (BS: 26.8.13)

Government sets a target of 259 million tonnes of foodgrains production in 2013-

14. Government has set a target of 259 million tonnes of foodgrains production in the

year 2013-14. Government of India is implementing various crop development

programmes/schemes through State Governments for achieving production targets of

various crops. (ET: 28.8.13)

8

NAAS bats for present system of testing genetic modified crops. The National

Academy of Agricultural Sciences (NAAS) has supported the present mechanism for

testing of genetic modified (GM) crops, saying the process is "stringent" and

"adequate" enough. (ET: 31.8.13)

Farm GDP growth can more than double from 1.9% to 4.5%: Crisil. Agriculture

is set to surprise on the upside because of a bountiful and well-distributed monsoon.

(ET: 11.9.13)

India trying to get US support for higher WTO farm subsidy limits. India wants

global trade rules to be amended so that developing countries can have higher farm

subsidy limits to fund food security programmes. (BL 21.9.13)

Agricultural Commodity Prices

Onion prices may ease soon as south India crop hits market: Government. Onion

prices, which continue to rule at an unaffordable level of Rs 60-70 per kg, are

expected to cool down in the coming days as new crop from south India has started

hitting the market, the government said today. (ET: 3.9.13)

Onions drive WPI inflation to 6-month high. Inflation, in onions rocketed to 244.6

per cent in August against an already high 119.4 per cent in the previous month,

jacking up the rate of wholesale price rise to a six-month high of 6.1 per cent from 5.8

per cent in July, official data showed on Monday. (BS: 17.9.13)

Agricultural Commodity Futures Prices

Maize prices in India show mixed trends: USGC. Maize prices in India are

showing a mixed trend and the average rate last week was Rs 13,312 per tonne, higher

than last year by 5%, according to US Grains Council (USGC). (BS: 1.9.13)

Refined soya futures decline on weak demand. Weak demand in the spot market

against adequate position led to decline. (BS: 19.9.13)

9

BROAD SECTORAL TRENDS

PM's council pegs FY14 GDP growth at 5.3% (BS 13.9.13)

Says containing fiscal deficit at 4.8% will be challenging, RBI must maintain monetary

stance till rupee stabilises

Prime Minister's Economic Advisory Council (PMEAC) has pegged India's Gross Domestic

Product (GDP) growth at 5.3% for the current financial year.

This is way down from their earlier estimates of 6.4% but higher than sub-5% growth

projected by various brokerage firms and independent economists.

C Rangarajan, Chairman of PMEAC said in a press conference that containing the fiscal

deficit within the budgeted target of 4.8% of GDP could be a challenge.

In order to achieve the 4.8% fiscal deficit target, action will have to be taken during the year

particularly in the case of subsidies.

Talking about the food security Bill's burden on the fiscal deficit, Rangarajan said, "As far as

current year goes, the burden will not be heavy because implementation will take time."

He added that there should be a cap on the total subsidies.

"If food subsidy is paramount then other subsidies should be brought down consequently",

Rangarajan said.

Rangarajan projected FY14 CAD at $70 bn or 3.8% of GDP. The Council attributed the rise

in CAD to gold and oil.

"Agriculture will grow at 4.8% as a result of well distributed monsoon," he said. Agriculture

grew at 1.9% in 2012-13. He added that industry is projected to grow at 2.7% in 2013-14.

Manufacturing has been pegged at 1.5% for the current financial year while services are

projected to grow at 6.6%, PMEAC said.

The PMEAC forecast the wholesale inflation at 5.5% for the current financial year. "Good

performance of agriculture will have moderate impact on inflation, however, depreciated

rupee can add pressure to this", the Council said.

Reserve Bank of India (RBI) must maintain its current monetary stance until the rupee

stabilises, Rangarajan said.

PMEAC pegged net foreign direct investment (FDI) flows at $21.7 billion for the current

fiscal year, down from an earlier estimate of $24 billion.

The trade deficit would remain at $ 105 billion for 2013-14, it said.

10

India's economy grew at 4.4% in the three months to June -- the slowest quarterly rate since

the global financial crisis -- hurt by a contraction in mining and manufacturing.

11

AGRICULTURAL POLICY

States get six months more to roll out food security bill: Centre (ET 26.8.13)

The Centre has decided to give state governments one year instead of the proposed six

months to roll out its food security scheme.

The Centre has decided to give state governments one year instead of the proposed six

months to roll out its food security scheme, a strategic amendment aimed at garnering

sufficient support to enable its passage.

Food minister KV Thomas is likely to move this amendment, along with a few others, on

Monday, when the bill is scheduled to be debated and passed by the Lok Sabha, a person

familiar with the matter told ET.

The Cabinet has decided to bring in the amendment, which will give state governments time

till August 2014 to start fully implementing the scheme, after the opposition parties as well as

the state units of the Congress demanded time to prepare for the scheme.

The delayed roll-out will also help reduce the fiscal burden on the Centre, added the person.

The amendment is a three-in-one political ploy to satisfy all stakeholders, a senior leader said.

First, the state governments, especially those run by the opposition parties, can claim they got

more time just as they had demanded. Second, the Congress can go into the elections without

being blamed for having accentuated fiscal problems for its political gains. Third, the

extended deadline will allow the Congress to maintain the buzz around the legislation ahead

of the assembly polls in four states right up to the 2014 Lok Sabha elections. Moreover, the

leader said, the party's experts have told the leadership that it will take more than six months

to fully implement the scheme.

"Instead of facing charges of failed implementation or risking political sabotage by our rivals,

it is better to go to the polls by deferring the final implementation in which many Congress

state governments will take the lead."

The UPA has decided on the amendments after hectic backchannel talks led by Congress

President Sonia Gandhi's political secretary Ahmed Patel, the leader said. Patel, along with

Parliamentary Affairs Minister Kamal Nath and Thomas, met SP chief Mulayam Singh

Yadav, BSP leader Mayawati, JD(U)'s Sharad Yadav and TR Baalu of DMK. The three-

member team also held telephonic talks with Bihar CM Nitish Kumar and DMK chief M

Karunanidhi.

As per another amendment, none of the states will have to take any cut from their current

food quota from the Centre after the implementation of the scheme. The ET had last week

reported Congress' pact with the DMK on this count.

The changes may put an additional burden of Rs 5,000 crore on the Centre. The government

will also propose an amendment that the scheme will ensure continued procurement from

farmers. Besides, it plans to replace the requirement of pre-cooked food with prepared food

12

as the nutrition component of the food scheme for schoolchildren. It is keeping its options

open on including pulses in the scheme.

Food Security Bill: Lok Sabha approves $20 bn cheap grain plan for poor (FE: 27.8.13)

India's lower house of parliament approved a plan worth nearly $20 billion on Monday to

provide cheap grain to the poor, a key part of the ruling Congress party's strategy to win re-

election.

Under the plan, the government will sell subsidised wheat and rice to 67 percent of its

population of 1.2 billion. India is home to a quarter of the world's hungry poor, according to

United Nations data, despite being one of the biggest food producers and experiencing years

of rapid economic growth.

The vote broke a long stalemate in parliament, potentially clearing the way for several

reforms aimed at spurring the flagging economy which the government hopes to pass in an

extended session that ends on Sept. 6

Faced with an unruly parliament, Prime Minister Manmohan Singh's coalition government

last month resorted to an executive order to implement the programme, which his Congress

party hopes will help win it a third consecutive term in power. The next election is due by

May.

The Rajya Sabha upper house must now approve the decree before it becomes law.

'NATIONAL SHAME'

In a foretaste of the battle for votes to come, the main opposition party says the welfare

scheme, which expands an existing cheap food programme covering 218 million people, is

still too narrow to tackle widespread malnutrition among India's millions of poor.

Lawmakers passed the bill only after nearly nine hours of debate and the inclusion of

amendments that government sources could lead to an additional requirement of about 3

million tonnes of grain.

Singh said last year that the child malnutrition in India, where almost 50 percent of children

are underweight, was a "national shame". Despite that, some critics have dubbed the new plan

a waste of public money at a time when growth has been steadily slowing.

The main opposition Bharatiya Janata party (BJP), which already runs a successful food

handout programme in Chhattisgarh state, voted for the bill. It had earlier criticised it for

making food more expensive and failing to provide enough nutrition.

The BJP's likely candidate for prime minister, Narendra Modi, said in a letter to Singh on

Aug. 7 that the scheme would effectively reduce allowances for very poor families and make

them spend more on food, because entitlements would be calculated per individual rather

than per family.

He said families below the poverty line would now have to spend an extra 85 rupees ($1.3)

per month to keep eating the same amount of rice and wheat.

13

The expanded subsidy is a pet project of Congress leader Sonia Gandhi, who led the party to

victory in the last two elections on the back of populist programmes such as a rural jobs plan

and a $12.5 billion farmer loan waiver passed just before the 2009 general election.

In a dramatic development, Gandhi, widely seen as the country's most powerful politician,

had to be led out of parliament during the debate. She was admitted to a New Delhi hospital

after complaining of chest pain, television channels said.

Larger concern in the food Bill is its effective implementation: CII (BS: 28.8.13)

Kris Gopalakrishnan opines as significant section of population lives under BPL, govt

intervention to provide nutritious food is essential

The Confederation of Indian Industry (CII) on Tuesday said though food was extremely

important in India, the larger concern was regarding the effective implementation of such a

high-profile and critical social agenda of the government.

S Gopalakrishnan, president, CII, in his comment on passage of the food security Bill in the

Lok Sabha, said, “Food security is extremely important. With a significant section of the

population living below the poverty line, government intervention to provide nutritious food

is essential.”

However, Gopalakrishnan said, there were concerns. “Such a large outlay at this point would

definitely have a negative impact on the fiscal deficit. This needs to be managed. The larger

concern is regarding the effective implementation of such a high-profile and critical social

agenda of the government.”

Further, the CII President said use of the Public Distribution System raised questions about

the efficacy of the model. Targeting is another area needing special attention. CII hopes

appropriate focus would be given to these aspects — mainly that of targeting, so that the

needy could benefit from this programme, he added.

Rajat Wahi, partner and head of consumer markets, KPMG in India, said, “We feel this Bill

would go a long way in eradicating hunger among children and women, in empowering

women over 18, and in raising the nutrition levels in children and expectant mothers. Being

the largest programme of its kind anywhere in the world, it would be a great example to the

world if we can execute this well. The Bill would also provide a strong impetus to the

economy, as it should free some of the non-discretionary income of the poorer sections of

society, and allow them to spend this on other non-essential products, which should boost

sales for the FMCG/food companies. Finally, if it is implemented according to plan, it would

allow the food to go to people who need it, rather than being wasted and left rotting in

warehouses/godowns. The government should ensure that they have the checks and balances

in place to ensure there is minimum leakage and wastage and severe penalties for people who

abuse it.”

Maharashtra Chief Minister Prithviraj Chavan said the Food Security Act would bring in a

sea change at the social and political level as nobody would starve. “The Food Security Act

14

would transform the lives of many.It has received admiration from the United Nations and

therefore, is quite important at the global level.”

Rajya Sabha passes food security Bill (BS 3.9.13)

To cover 75% of the rural and 50% of the urban population by providing them with

subsidised foodgrains

The Rajya Sabha on Monday passed the food security Bill after a seven-hour discussion and

technical glitches in the voting system, which caused considerable delay. The Bill had been

cleared by the Lok Sabha last week. To cover 75 per cent of the rural and 50 per cent of the

urban population by providing them with subsidised foodgrains, the Bill now needs

presidential assent to translate into law. Though Opposition and parties like the Trinamool

Congress found faults with the Bill on several counts, including seeing it as an assault on

federalism, it was passed in favour of the Congress-led United Progressive Alliance (UPA).

In his reply to the debate, Food Minister K V Thomas assured members all suggestions of

political parties would be incorporated while drawing up the amendments. As for concerns

that state specific food schemes should not be overridden by the Centre’s food scheme,

Thomas said the federal system would be protected. “The prime minister has taken a bold

decision of protecting existing quantity and price in states.”As for the nutritional aspect, as

providing universal coverage was not possible, Thomas said special care would be taken of

pregnant women and lactating mothers.The government, he said, had incorporated

suggestions such as “hot cooked food” for certain sections rather than the earlier “ready-made

food” provision. The food minister acknowledged that the Food Corporation of India had its

shortcomings. “It is a white elephant” but steps were being taken to remedy it.

Bahujan Samaj Party chief Mayawati said her party supported the government’s bid to

provide food for all, but wanted the amendments moved by parties to be taken note of and

included by the government.

Leader of the Opposition in the Rajya Sabha Arun Jaitley, who spoke on the “misuse” of the

ordinance powers through which the government had brought in the food security ordinance

despite the fact that Parliament was to be convened in less than a month, said that that was

only “political intent” as the Congress-led UPA wanted some states to unfurl the scheme at

the earliest.

Criticising the government, he said the Bill should be renamed “repackaging of existing

schemes” like the public distribution system, mid-day meal and ICDS.

He cited the food scheme of the BJP-ruled Chhattisgarh government which had even been

praised by the Supreme Court and urged the government to increase the entitlements from 25

kg per family to 35 kg per family.

BJP senior leader Venkiah Naidu lambasted the UPA for touting it as “life changer”.

15

New food law: Nabard to put up 10,000 warehouses in panchayats (BS: 8.9.13)

Anticipating that Food Security Act may create a storage capacity shortfall for around 1.5

million tonnes of foodgrain, Nabard has kick-started an ambitious project to build 10,000

warehouses at panchayat level this fiscal envisaging an investment of nearly Rs 5,000 crore.

The proposed warehouses will be set up in association with primary cooperatives and the

money is already provided for in the budget, Nabard Chairman Prakash Bakshi told PTI.

"We are on our own trying to take up a very large initiative of creating warehouses with

cooperatives at panchayats. We have planned to set up 10,000 such warehouses this year," he

said during a recent interaction, adding that around 300 such warehouses have already been

put up.

On whether the target is too ambitious, Bakshi conceded that probably it is and that they may

fall short of target.

However, whatever the number it achieves this fiscal will help it scale up to 20,000 such units

by end of next fiscal.

Speaking on the need for such facilities, especially in light of the passage of the landmark

Food Security Act, Bakshi said, "a lot of warehousing space is required and at least 1.5

million tonne capacity should be created immediately to meet additional requirement."

On the investment side, Bakshi said the budget has already earmarked Rs 5,000 crore towards

creation of warehousing facilities which will be used for this project. Just like the Rural

Infrastructure Development Fund, this money is also drawn from commercial banks' shortfall

in priority sector lending targets, he explained.

Nabard's idea revolves around building storage facilities close to the farmers, who cannot

take their produce to distant places and then sew up the right tie-ups for standardisation

through which farmers get help in their marketing produce.

Government notifies food security law (ET 15.9.13)

Government has notified the landmark food security legislation, giving a legal right on highly

subsidised foodgrains to 67 per cent of the country's population.

The Lok Sabha had passed the Bill on August 26, while the Rajya Sabha gave its nod on

September 2. President Pranab Mukherjee gave his assent to the Bill last week.

"...it (the Act) shall be deemed to have come into force on July 5, 2013," the Gazette

notification said.

16

The food law will provide food and nutritional security in human life cycle approach, by

ensuring access to adequate quantity of quality food at affordable prices to people to live a

life with dignity, it added.

The Centre has convened a meeting of state food ministers and secretaries to discuss the rules

and regulations for implementing the world's biggest programme to fight hunger. The two-

day meeting is scheduled from October 3.

The new law, touted as a "game changer" by the ruling Congress and slammed by the

Opposition as a "gimmick" before 2014 polls, guarantees 5 kg of rice, wheat and coarse

cereals per month per person at Rs 3, Rs 2 and Re 1, respectively.

It also guarantees the right to receive food security allowance in case of non-supply of the

entitled quantities of foodgrains and nutritional support to pregnant, lactating mothers and

children to prevent malnutrition.

At Rs 1,30,000 crore government support, the food security programme will be the largest in

the world. It will require 62 million tonne of foodgrains annually. Women of 18 years of age

or above will be considered as head of household for purpose of issue of ration cards.

Delhi, Haryana and Uttarakhand have announced implementation of the provisions of the

law. Beneficiaries will be determined based on population estimates. State governments will

prepare guidelines to identify priority households.

CCEA approves outlay of Rs 12,350 cr for NFSM in 12th Plan (BS 20.9.13)

Growing food demand calls for boosting foodgrains production

To meet the growing food demand, government today approved an allocation of Rs 12,350

crore for boosting foodgrains production by 25 million tonnes under the National Food

Security Mission during the 12th Five Year Plan.

The National Food Security Mission (NFSM) was launched in 2007-08 with an outlay of Rs

4,882.48 crore for the 11th Five Year Plan (2007-12) and succeeded in meeting its objective

of raising foodgrains output by 20 million tonnes (MT).

Keeping in view the necessity to raise foodgrains output to meet future demand, Cabinet

Committee on Economic Affairs (CCEA) approved continuation of the ongoing centrally

sponsored scheme NFSM during the 12th five year plan (2012-17) with an allocation of Rs

12,350 crore.

"This will help in increasing additional foodgrains production of 25 million tonnes by 2016-

17," Information and Broadcasting Minister Manish Tiwari told reporters here after the

CCEA meeting.

Under the NFSM, rice output would be raised by 10 MT, wheat by 8 MT, pulses by 4 MT

and coarse cereals by 3 MT during the 12th Plan.

17

For the 2013-14 fiscal, the outlay for NFSM has been increased to Rs 2,250 crore from Rs

1,850 crore last year.

NFSM would be implemented in 27 states, including the North-eastern and hill states, an

official statement said.

The Mission would be implemented in selected districts as per the criteria laid down for

NFSM, giving the priority to districts that have yields lower than the State average.

The objective of the NFSM would be on cropping systems instead of individual crops and

inclusion of coarse cereals through development of Farmer-Producer Organisations (FPOs),

creating value chains and providing market linkages.

The basic strategy is to promote improved technologies, enhancing farm efficiency,

integrated pest management, water use efficiency and resource conservation technologies.

18

19

RICE

Weak rupee, strong demand likely to propel rice exports (FE 5.9.13)

Rising global demand and the rupee’s devaluation against the US dollar are having a positive

impact on the country’s rice exports, estimated at more than R30,000 crore annually.

Commerce ministry officials and exporters are bullish in the wake of higher price realisation

for the India’s rice, particularly Basmati shipments, in the current fiscal. Even in case of non-

Basmati rice, there has been an increase in the contracted amount in the current fiscal.

This rise in shipments is likely to keep India’s top rice exporter status intact, helping it beat

Vietnam and Thailand for a third consecutive year.

According to the latest commerce ministry data, realisation from Basmati exports during

April-June increased a whopping 62% whereas rice contracted for exports during April-

August saw a jump of 14% over the same period last year.

During April-August, 16. 87 lakh tonne of Basmati rice was contracted for exports against

14.75 lakh tonne in the same period last year. Even the average price realisation during April-

August was $1,362 per tonne against $1,030 per tonne during the same period last year

“As most of our Basmati rice exporters have forward contracts with importers, we will get to

know the quantum of price realisation only over the next few months. However, due to rising

global demand, our Basmati rice exports during the current fiscal would see a rise of more

than 10%,” MP Jindal, president, All India Rice Exporters Association (AIREA), told FE.

Together with non-Basmati rice shipments, India's rice exports gained in value terms during

April-July, 2013.

“As most of India’s Basmati exports are settled in US dollars, profitablity of companies will

improve. Indian Basmati rice always commanded higher price in the global market. The

devaluation of the rupee against the US dollar would help futures contracts,” R Seshadri,

director, Tilda Riceland, one of India’s biggest Basmati rice exporters said.

Rice exports have been rising steadily since the government lifted a 4-year-long ban on non-

Basmati rice exports in September 2011.

India has emerged as the world’s largest exporter of rice in 2011-12 and 2011-12, with

shipments of about 10 million tonne. Thailand exported 6.9 mt and Vietnam sold 7.8 mt

overseas.

Apart from Iran, other key destinations for Indian Basmati are Saudi Arabia, the UAE,

Kuwait and Iraq.

20

India likely to harvest record 107 mn tonnes rice in 2013-14: IGC (ET 5.9.13)

Rice output is expected to touch a new record of 107 million tonnes in 2013-14 crop year,

while exports are expected to dip by almost 10 per cent to 8.5 million tonnes in the same

period, according to IGC.

The world's second largest rice producer is estimated to have harvested 104.4 million tonnes

in 2012-13 crop year (July-June). It had reached a record 105.30 million tonnes of the grain

output in 2011-12.

In the latest report, the International Grains Council has projected India's rice production to

touch a new record at 107 million tonnes in 2013-14, against the demand of 97.9 million

tonnes for the same period.

With an opening stock 22.9 million tonnes, total supply of the grain has been projected at

129.9 million tonnes this year, it said.

On rice exports, IGC said the country may export 8.5 million tonnes in 2013-14, down by

almost 10 per cent from 9.4 million tonnes shipments made in the last year.

The report highlighted that Indian exporters have gained market share following the removal

of the ban on shipments of non-basmati rice at the end of 2011, also reflecting competitive

pricing relative to the main exporters.

The country is bracing for record rice output as area sown to paddy has increased so far

buoyed by a good monsoon.

According to Agriculture Ministry data, area planted under paddy has increased to 35.46

million hectare till last month of the ongoing kharif season, as against 34.47 million hectare

in the same period last year.

The kharif season begins with the onset of southwest monsoon from June. Much of the rice

output is grown in the Kharif season, while the rest 15-20 per cent of the produce comes from

rabi (winter) season.

Syria crisis likely to impact non-basmati exports (BS 6.9.13)

In 2011-12 total non-basmati export to Syria was 8,468 metric tonnes

The ongoing crisis in Syria is likely to impact Non-basmati exports from India. Exporters

mentioned that they were cautious and mentioned that if the political unrest continues they

will loose one of the emerging market for non-basmati rice.

According to the APEDA (The Agricultural and Processed Food Products Export

Development Authority) data, India exported 20,557 metric tonnes of non-basmati of Rice to

21

Syria during to the period in 2013-14 during April-May, while in 2012-13 it exported 38,113

metric tonnes.

Whereas in 2011-12 the total non-basmati export to Syria was 8,468 metric tonnes. While the

quantum is low as compared to South African countries, but it is emerging market and the

current crisis may hamper the exports.

It is worth mentioning that Non-basmati rice shipments during the fiscal year 2012-13

registered an increase of 58% at around 6.5 million tonnes against previous year’s 4.09

million tonnes. This quantum jump in non-basmati rice shipments was mainly on account of

huge demand from African countries, such as Nigeria and Ghana and also from Indonesia.

As far Basmati is concerned it exported around 14,781 tonnes in 2011-12, 5848 tonnes in

2012-13 and 506 tonnes in 2013-14 during the period April-May 2013. The data clearly

suggests that there is more scope for Non-Basmati export to Syria compared to Basmati rice.

Speaking to Business Standard, Arvinderpal Singh Manchanda, managing director, Amar

Singh Chawal Wala said, “ The ongoing political unrest will definitely affect the exports.

Last year, we exported around 1,000-1,500 tonnes of Basmati to Syria, but now we stopped

exporting as lot of risks were involved.

Due to sanction on Syrian Banks, the exports payment were routed through Libyan Banks.

Taking into considerations, the risk involved, we decided not to export to Syria which was

emerging country for Basmati and Non-Basmati exports. The crisis will definitely have

repercussion on exports in coming months.”

They added that the exports have been affected and it will reflect in the June-August 2013

exports data.

R Sundaresan, Executive Director, All-India Rice Exporters Association also confirmed that

the present crisis will definitely impact the exports. He added, “This is beyond doubt that the

current crisis will impact the exports but since the volume is not too large so the impact

would be less. The exporters have to focus on South African countries for non-Basmati

exports in order to offset the current volume exported to Syria.”

Exporters also added that some of the exporters have faced payment problem in both the

countries. Insiders mentioned that Rice exporters have reworked the business formula with

the Syrian importers as they are dealing with only those who have a good track record and

ready advance payment.

Russia lifts ban on rice imports from India (BS: 7.9.13)

Ban on peanut imports also removed; exports of both commodities to resume with immediate

effect

Russia has lifted the ban on imports of rice and peanuts from India, after about nine months.

This followed a series of marathon meetings between the governments of the two countries

and India’s assurance of adhering to global quality standards.

22

Indian exporters would be able to send consignments of rice, rice cereals and peanuts to

Russia with immediate effect. In December 2012, Russia had banned imports of rice, rice

cereals and peanuts from India after khapra beetle (Trogoderma granarium), a pest found in

stored grain products and seeds, was discovered in a few consignments.

Earlier, the ban had strained trade relations between India and Russia. The resumption of

exports comes at a time when the Centre is pushing high quantities of exports to secure

dollars. This would, in turn, help address the government’s current account deficit.

A communiqué posted on the website of Agricultural and Processed Food Products Export

Development Authority said, “The ministry of foreign affairs of the Russian Federation

presents its compliments to the Embassy of India in the Russian Federation and has the

honour to inform you based on the material on the results of the Rosselkhoznadzor

delegation’s visit to India and the guarantees of the Indian side to comply with Russian

phytosanitary requirements,

Russolkhoznadzor considers possible to cancel temporary restrictions on the import of rice,

rice cereal and peanuts from India to Russia starting September 1.”

“The ministry of foreign affairs of the Russian Federation avails itself of this opportunity to

renew to the Embassy of India in the Russian Federation the assurances of its highest

consideration,” it added.

Gurnam Arora, joint managing director, Kohinoor Foods (formerly Satnam Overseas), said,

“Though Russia is not a big market for Indian rice exports, opening up this market would

surely make a positive difference for exporters here.”

The issue was discussed at a recent meeting between Commerce Minister Anand Sharma and

Russian Minister of Economic Development Alexey Valentinovich Ulyukaev on the sidelines

of an Association of Southeast Asian Nations ministerial meeting in Brunei. Sharma assured

sanitary and phytosanitary issues in exportable commodities would be addressed.

Vijay Setia, former president of the All India Rice Exporters’ Association, said, “The opening

of the Russian market will help India’s rice exports grow.” India’s rice exports to Russia

increased to $25 million in April-December 2012, compared with $4.5 million in the

corresponding period of 2011.

FDA probes arsenic presence in rice from India, other nations (ET: 8.9.13)

The US health watchdog FDA is conducting a detailed inspection of the arsenic level in rice

being sold in the American market, including those of basmati variety imported from India.

While an analytical study of more than 1,300 samples of rice and rice products, including

basmati from India, did not show any alarming levels of arsenic presence, the FDA will now

conduct a "comprehensive risk assessment" study to determine the long-term impact of the

arsenic found in rice.

23

Arsenic is a chemical element present in the environment from both natural and human

sources and its inorganic forms have been closely associated with long-term health effects

such as higher rates of skin, bladder and lung cancers.

While most crops don't readily take up much arsenic from the ground, rice is different

because it takes up arsenic from soil and water more readily than other grains.

In a latest consumer update, the FDA (Food and Drug Administration) said it has "increased

its testing of rice and rice products" to determine the level and types of arsenic found in these

products, usually a life-long dietary staple.

The regulator said its next step will be "to conduct a risk assessment", wherein it would

analyse the health risk associated with eating rice and rice products to determine the steps

required to minimise the risks for consumers, including vulnerable groups like children and

pregnant women.

The draft risk assessment will be made available for public comment following peer review,

it said.

Agency scientists have so far determined that amount of detectable arsenic is too low in rice

and rice product samples to cause any "immediate or short-term" adverse effects.

US rice imports have been increasing in the last 25 years. Most US rice imports are aromatic

varieties from Asia--jasmine from Thailand and basmati from India, the world's largest

producer of the aromatic grain.

Total US rice imports for 2012/13 was projected at 19.5 million cwt (centum weight). Indian

basmati is one of the most expensive rice in the US as it commands 2-3 times higher price

than American domestic long-grain rice.

The results of the analytical study of about 1,100 samples of rice and rice products were

released last week, while a preliminary set of results for nearly 200 samples were released in

September 2012.

The study of more than 1,300 samples of rice and rice products, which included more than 30

from India, found 0.1-7.2 micrograms of inorganic arsenic per serving in them.

The study of samples from India showed that fully cooked basmati contained up to 0.9 units

of inorganic arsenic per serving, boil-in-bag variety had 2.3 units, aged variety had up to 3.9

units, white variety had up to 3.9 units and the brown variety had up to 6 units of arsenic

presence.

FDA has cautioned against making any state-to-state or country-to-country comparisons with

these results as the number of samples are "too few" to support such an exercise.

While observing that the arsenic presence has been found to be too low so far to have any

adverse health impact for short-to-medium term, FDA said that a further study is required to

determine the long-term impact as rice and rice products are consumed for a long period of

time.

24

"... what about the long-term impact? After all, rice is a food that people eat over the course

of a lifetime," it said.

"The approximately 1,300 analytical results do not tell us what long-term health effect, if any,

these levels may have, nor do they tell us what can be done to reduce these levels. The data

collection and analysis is the first step in a major effort to understand the overall safety of

consumption of rice and rice products in the United States," FDA said.

The FDA has been monitoring arsenic levels in rice for more than 20 years and has seen no

evidence of change in levels of total arsenic in rice, it added.

UP eyes 2.5 mn tonnes paddy procurement in 2013-14 (BS: 9.9.13)

The rice procurement season would be effective for six months - from October 1 to March,

2014.

In spite of lack of preparations, the Uttar Pradesh government is targetting procurement of 2.5

million tonnes (mt) of paddy during 2013-14.

The Food Corporation of India (FCI) would procure 10 per cent of the 2.5 mt target, while

the rest would be procured by the state agencies.

The rice procurement season would be effective for five months — from October 1 to

February, 2014 — and about 3,250 procurement centres would be set up.

According to the agriculture department, paddy acreage this year stands at 5.964 million

hectares (MH) as compared to the target of 5.947 MH. The preliminary paddy production is

estimated at 15.30 MT.

The food department’s procurement centres are mandated to pay farmers through Real Time

Gross Settlement (RTGS) system, which directly credits money to their bank accounts. The

remaining centres would pay by means of account payee cheques.

UP Food Commissioner Archana Agarwal said the total warehousing capacity in UP stood at

3.765 mt. FCI is tasked to prepare an action plan for storage of rice.

The government would accord priority to modernised rice mills in custom milling and levy

obligations.

In UP, rice millers have the obligation of 25 per cent rice levy, which is collected by the state

for public distribution system (PDS). Under custom milling, the government procures paddy

from farmers and gets it milled by paying incidental charges.

“The mills incur Rs 60 in milling per quintal of paddy, while the state has been paying only

Rs 10 per quintal as milling cost for the last 10 years. This is grossly inadequate and a loss

making proposition. For this reason, the millers are not excited about custom milling,” Uttar

Pradesh Rice Millers Association President Rakesh Kumar Agarwal told Business Standard .

The millers have also demanded abolition of rice levy, citing lower realisation.

25

Paddy is cultivated across UP, while seven districts fall under high productivity, including

Bijnore, Kushingar, Pilibhit, Chandauli, Baghpat, Ambedkar Nagar and Varanasi.

Paddy is highly dependent on south-west monsoon, which occurs over the subcontinent from

June through September. The kharif crop is chiefly sown between March and August and

harvested between June and December.

There are about 1,000 large rice mills in UP, while the number of smaller units is about

3,000. A large mill has a capacity to mill three to four tonnes paddy per hour.

The main elements in mills’ modernization are dryer and sorting machines, which cost about

Rs 20 lakh and Rs 50 lakh respectively. Only about 10 per cent of the state rice mills are

equipped with these machines.

The millers have been urging the government for a five year window for modernisation and

providing 25-30 per cent subsidy on the cost.

CRRI launches new unit to make rice farming profitable (ET: 22.9.13)

In a bid to accord an entrepreneurial status to rice farming in Odisha, Central Rice Research

Institution here has come up with an innovative unit to look into the aspects of business,

planning and development of rice growers.

The unit called Business Planning and Development (BPD) unit was lunched here on

Saturday. As agricultural land under rice cultivation is decreasing, farmers are turning away

from rice cultivation as it is not profitable. But rice is staple food for over 65 per cent people

of our country.

Lunching the unit, director of New Delhi-based National Agricultural Innovative Project

(NAIP) Dr Rama Rao said the BPD unit will go a long way in attracting rice farmers towards

entrepreneurship.

Speaking on the occasion, CRRI director Dr T Mohapatra said BPD unit is a World

Bankfunded project.

While rice is the staple food of nearly 65 per cent of country's population, rice farmers end up

as losers getting a meager price for their produce.

"The current Minimum Support Price ( MSP) of rice is only Rs 1320 per quintal which is not

encouraging," project inspector Dr G A K Kumar said.

If such trends are not arrested, the ambitious food security bill will come as a cropper, opined

the speakers on this occasion.

BPD also aims to impart training in setting up agri-enterprises and their management. This

unit will also look into production, finance, personnel and marketing aspects to evolve

successful agri-preneurs.

26

"Once unit is registered as a Company, it will provide legal assistances to agri-preneurs," Dr

Kumar said.

With a view to popularize its inventions of farm techniques, CRRI also organized a brain-

storming discussion on this occasion.

Kharif rice output projected to drop to 92.32 million tonnes: Government (ET: 24.9.13)

Country's rice production is projected to drop to 92.32 million tonnes in the Kharif season

this year due to deficient rains in some states, but the overall foodgrain output is estimated to

rise marginally to 129.32 million tonnes in the same period.

The rice production stood at 92.76 million tonnes in the kharif (summer) season of the 2012-

13 crop year (June-July), while total foodgrain output was estimated at 128.20 million tonnes.

"As per the first advance estimate for kharif season of 2013-14, rice production is estimated

at 92.32 million tonnes in the kharif season of this year," Agriculture Commissioner J S

Sandhu said at the national conference on rabi (winter) crops).

The estimate for rice output is kept lower as deficient rains in Bihar, Jharkhand and North

East have affected the kharif crops, he said.

Also, the flood situations in Assam, Bihar, eastern Uttar Pradesh and West Bengal have an

impact on the kharif crops, he added.

Sandhu said, however, maize production is projected to increase to 17.78 million tonnes in

the kharif season of this year, against 16.04 million tonnes in the year-ago period.

Pulses production is also estimated to rise to 6.01 million tonnes from 5.91 million tonnes in

the review period. Whereas millet production is forecast at 13.21 million tonnes in the kharif

season of this year, he said.

Sowing of kharif crops begin with the onset of southwest monsoon from June, while

harvesting starts from October.

According to Indian Meteorological Department, the 53 per cent of the country received

normal monsoon. One-third of the country received excess rains.

Monsoon has withdrawn from western and northern regions of the country. Early withdrawal

of monsoon has created heat stress in central parts of the country, Sandhu added.

The Agriculture Ministry releases production estimates at different stages of crop.

27

WHEAT

Wheat's great leap forward (BS: 26.8.13)

Global collaboration is becoming vital to fight the chronic rust disease

Has wheat productivity reached a plateau? This question is difficult to answer in a yes or no.

Wheat scientists have been regularly churning out new and qualitatively superior varieties but

most of them have only marginally higher yield than the earlier best ones. The dramatic jump

in output triggered by the high-yielding dwarf wheat strains evolved by Nobel laureate

Normal E Borlaug in the early 1960s could not be replicated again. New genes of the kind

that were tapped by Dr Borlaug to reduce the plant height and enhance grain output have

been hard to locate in all these years.

However, the wheat scientists have not given up. They have conceived another route to

achieve a similar - or even more spectacular - leap in productivity. It involves elevating the

photosynthetic capacity of the wheat plant to enable it to utilise solar energy more efficiently

to bear larger number of relatively bulkier grains. The Mexico-based International Maize and

Wheat Research Institute (abbreviated to CIMMYT in local language), where Borlaug bred

his miracle wheat strains over half a century ago, is now endeavoring to pierce the

productivity barrier through this approach. CIMMYT Director-General Thomas A Lumpkin

seems confident that this strategy can lift the wheat yield ceiling by 50 per cent. "But the task

is huge because wheat plant needs to be reworked and modified to enable it cope with higher

photosynthetic capacity that requires accommodating more energy for higher grain

production," he cautions. It is like remodeling a car to make it compatible with a higher

horsepower engine.

The Mexican institute intends to move some of the work on this project to this part of the

world by roping in the Borlaug Global Rust Initiative (BGRI) which has a close collaboration

with the Indian Council of Agricultural Research (ICAR). The BGRI is working primarily on

trimming the world's vulnerability to rust that has for long been the nemesis of wheat, taking

a heavy toll on crop output across the world. It is funded largely by the Bill & Melinda Gates

Foundation and the UK's Department of International Development.

Newer forms of rust infection keep surfacing, exacerbating this menace. The latest and the

most perilous among the relatively newer forms of rust is the stem rust Ug99 - called so

because it was first noticed in Uganda in 1999. It has spread rapidly to several countries and

is now playing havoc in wheat farms in east Africa, Yemen, Iraq and, to some extent, Iran.

Incidence of rust have also been observed recently in India's neighborhood, notably Pakistan

and Afghanistan, which hopefully would be contained there. Globally, nearly 85 per cent of

wheat grown in the Americas, Asia and Africa is susceptible to the Ug99 stem rust.

Though India has successfully kept rust under control for the past few decades by evolving

28

and putting into cultivation rust-immune wheat varieties, the danger of rust invasion cannot

be ruled out. Indian wheat scientists, therefore, intend to saturate the Wheat area with Ug99-

protected varieties. Going by ICAR Director-General S Ayyappan's statement, the area

planted with highly Ug99-susceptible wheat variety PBW-343 has been reduced in the past

five years from over half of the country's total wheat acreage to just a quarter now. All new

wheat varieties are now screened and tested for immunity against Ug99 in rust endemic

countries such as Kenya and Ethiopia with the help of the BGRI.

Thus, enhancing the innate yield potential of wheat by improving its photosynthetic

efficiency may be of little consequence unless the scientists also simultaneously address

scourges such as rust and other stress caused by climate change and receding water table,

especially in South Asia's sprawling wheat granary spanning India, Pakistan and Nepal. The

global combat against enemies of wheat requires unflinching scientific cooperation among all

wheat growing countries which, unfortunately, is not forthcoming in full measure. Farm

scientists from across the world gathered recently in New Delhi to attend a technical

workshop on wheat, organised by the BGRI in collaboration with the ICAR, expressed

disquiet over the hurdles being put up by some countries in free flow of biological research

material. India favours free sharing of such material with other countries. Unless the others

do the same, scientists may remain handicapped in their war against wheat stress.

Low wheat production hits farm sector growth (BS: 31.8.13)

According to department of agriculture's fourth advanced estimate, production of wheat in

2012-13 is estimated to be 92.46 million tonnes, down 2.5% from last year's production.

In the first quarter of this financial year, growth in India’s agriculture sector dropped 0.2

percentage points to 2.7 per cent compared to the corresponding period last year, as a fall in

wheat production pulled down overall foodgrain output, too.

However, experts believe there could be a smart recovery in the second, third and fourth

quarters of 2013-14, as a bumper harvest is expected this kharif season. “The first quarter of

any financial year is usually lean for agriculture, as the previous year’s rabi output is

available in the market. The real impact of good rains and a surge in acreage this year would

be felt from the second quarter,” Ramesh Chand, director of National Centre for Agricultural

Economics and Policy Research told Business Standard.

He added the first-quarter growth data for agriculture, forestry and fishing had been lower

than in the corresponding period last year due to a fall in the production of wheat.

According to the Department of Agriculture’s fourth advanced estimate, in 2012-13, wheat

production was estimated to have stood at 92.46 million tonnes (mt), a fall of 2.5 per cent

compared to 2011-12. During the same period, overall foodgrain production dropped from

128.01 mt to 127.16 mt.

29

In the second, third and fourth quarters of this financial year, kharif and rabi harvests are

expected to rise to record levels, owing to a good monsoon. Latest data from the India

Meteorological Department (IMD) showed between June 1 and August 30, rains were 11 per

cent more than normal.

“If rains maintain the same intensity, there is a possibility overall showers this year could be

more than 100 per cent of the long-period average (LPA),” said a senior IMD official. LPA is

the average rainfall in the last 50 years (89 cm). Rains in the range of 96 per cent and 104 per

cent of LPA are considered normal.

“I am very sure given the good rains this year and the rise in acreage, India is on track to

recording five-six per cent agriculture growth this financial year,” Chand said.

As of Friday, India’s kharif acreage stood at 100.38 million hectares, 6.8 per cent more than a

year earlier.

FCI to sell 2 million tonnes of wheat in international market (ET: 11.9.13)

The Food Corporation of India(FCI) will export two million tonnes of wheat in the coming

months to earn valuable foreign exchange of nearly $ 600 million for the country.

The proposal to export the wheat from the stocks of the central pool of FCI was approved by

the Cabinet Committee on Economic Affairs (CCEA) last month. A sub-committee, headed

by FCI Chairman and MD C Viswanath, will meet soon to finalize the formalities for floating

international tenders.

The wheat export of 4.2 million tonnes undertaken by FCI last year had fetched $ 1.4 billion

in the international market.

"The acceptability of Indian wheat in the international market is an encouraging sign as

evident from the sale last year. Therefore, another 2 million tonnes of wheat will be offered to

the foreign buyers," said an officer of FCI. "We have the stocks. It is also the right time to

enter the international market," he added.

After the tenders are floated, an Empowered Committee, headed by the Commerce Secretary,

will approve the successful bidders. The foreign buyers of Indian wheat in the international

market are mainly from South Korea, Bangladesh and Ethiopia.

In the exports of 4.2 million tonnes completed last month, the Indian wheat had fetched an

average price of $ 311.38 per tonne.

According to the CCEA decision, the exports of the 2 million tonnes of wheat this year will

have to be completed by 31st March, 2014.

The FCI will undertake the exports through the State Trading Corporation , PEC and Metals

and Minerals Trading Corporation of India , which will float the tenders.

30

Govt aims to earn $600 mn by exporting 2 mn tonne wheat: FCI (BS: 11.9.13)

Last year, govt earned $1.4 billion from export of 4.2 MT wheat by PSUs. Indian wheat

fetched an average price of $311.38 per tonne.

FCI today said the government aims to earn $600 million by exporting 2 million tonne wheat

stored in its godowns.

The Cabinet Committee on Economic Affairs (CCEA) had last month permitted export of

additional 2 million tonnes wheat via state trading firms such as STC, PEC and MMTC to

clear surplus stocks with the Food Corporation of India and had fixed the floor price of $300

a tonne.

"FCI will export two million tonnes of wheat in the coming months to earn valuable foreign

exchange of nearly $600 million for the country," an official release said.

A sub-committee, headed by FCI Chairman and Managing Director C Viswanath, will meet

soon to finalise formalities for floating global tenders, it said.

Last year, 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.

"The acceptability of Indian wheat in the international market is an encouraging sign as

evident from the sale last year. Therefore, another 2 million tonnes of wheat will be offered to

the foreign buyers," a senior FCI officer said.

"We have the stocks. It is also the right time to enter the international market," he added.

After the tenders are floated, an Empowered Committee, headed by the Commerce Secretary,

will approve the successful bidders. The foreign buyers of Indian wheat in the international

market are mainly from South Korea, Bangladesh and Ethiopia.

According to the CCEA decision, the export of 2 million tonne wheat this year will have to

be completed by March 31, 2014.

As on September 1, foodgrain stock with FCI was 58.93 million tonne. Of this, wheat was

38.3 million tonne and rice 20.5 million tonne. FCI is the government's nodal agency for

procurement and distribution of foodgrains.

India sets out to sell more wheat but keeps price high (ET : 12.9.13)

India started another round of tenders to sell wheat on Thursday after a gap of three months

as it tries to sell 2 million tonnes to cut bulging stocks.

But its stubborn refusal to move from a minimum price of $300 per tonne set for earlier

exports which failed to reach their target of 4.5 million tonnes is likely to keep interest

subdued.

31

India, keen to boost any exports in order to reduce a gaping current account deficit and

support the rupee, which has lost 16 percent in value between from June to September, is

reluctant to sell its wheat abroad below the level set for domestic buyers.

It said on Wednesday it had set a target of earning $600 million from the extra quantity

allowed to be shipped out by the end of the current fiscal on March 31.

On Thursday, the three state trading companies - State State Trading Corp., MMTC and PEC

- issued tenders for wheat exports totalling 160,000 tonnes, the first such offers since June.

"It appears the government wants to test the market with the high floor export price of $300

per tonne against the backdrop of the weak value of the Indian rupee," said Tejinder Narang,

a New Delhi based commodity analyst.

Narang said the floor export price is about $60 per tonne higher than supplies from Black Sea

origins, making the Indian supplies unattractive to prospective global buyers.

India last year had allowed 4.5 million tonnes of wheat for exports to be sold by the three

state run companies until June, 2013. Out of that, 4.2 million tonnes was sold, earning $1.4

billion for the government.

India's wheat production is about 93 million tonnes in 2013 and demand is about 76 million

tonnes. The government uses stocks to supply subsidised grains to the poor and for a buffer

against years of drought and poor harvests.

Firms may get to lift wheat from open market (BS: 24.9.13)

Officials feel this will allow more traders to purchase wheat from FCI warehouses, help in

swifter liquidation of stocks

Saddled with huge stocks and rising inflation in cereals, the government is planning to allow

private traders to purchase wheat for sale in the open market from Food Corporation of India

(FCI) godowns situated in other states and not just in Punjab and Haryana.

This, officials said, would allow more traders to purchase wheat from FCI warehouses and

help in swifter liquidation of stocks.

“The matter has been listed for discussion in the cabinet committee on economic affairs likely

to be held in a day or two,” a senior official said.

Till date, of the allocated 10 million tonnes of foodgrains (wheat and rice) allocated for sale

in the open market by the government, just 0.8-0.9 million tonnes have been lifted by traders.

Difficulty in transporting grains from Punjab and Haryana to other consuming centres has

been cited as one of the prime reasons for traders refusing to purchase grains from FCI

godowns.

32

As on September 1, the government has 58.9 million tonnes of foodgrains in its warehouses,

of which 38.3 million tonnes is wheat and 20.57 million tonnes is rice.

This is against a requirement of 21.2 million tonnes of grains of which wheat is 14 million

tonnes and rice is 7.2 million tonnes.

33

MAIZE/COARSE CEREALS

Record crop likely in coarse cereals (BL 15.9.13)

Currently, maize (corn) for delivery to exporters in November is quoted at $220 or Rs 13,950

a tonne f.o.b. If this is worked backwards, then its price could be lower than the minimum

support price of Rs 1,310 a quintal fixed for this year. In turn, it could leave the Government,

which is headed for elections in six months time, in a fix to ensure that growers get at least

the support price.

Excess and even spread of rainfall during the current monsoon could have brought smiles to

the faces of farmers. But in the case of coarse cereals, it is also bringing in an additional

problem on the prospect of a higher, if not a record, production.

“Rains have been good in areas where coarse cereals are grown,” says Amit Sachdev, a

consultant for the industry on cereals.

“There are some reports of damage in a few places but I don’t see that affecting the final

outcome,” said Sachdev.

“Good rains could ensure a bumper crop in States such as Maharashtra. Compared with 2011,

when we had a record crop, it could be one-and-a-half times,” said E. Govindarajan, an

exporter.

According to the Ministry of Agriculture, 80.74 lakh hectares (lh) have been brought under

maize against 73.37 lh last year and the normal 72.28 lh. Bajra has been planted on 74.42 lh

against 60.64 lh last year and the normal 89.27 lh.

Overall, coarse cereals coverage has increased to 192.14 lh against 173.85 lh last year. This is

marginally lower than 195 lh covered at this time of the year.

Maize cultivation has increased sharply in the last 4-5 years with the introduction of new

hybrids whose yield is high. Also maize, being a sturdy crop, requires less amount of water

and is generally free from pest attacks.

Some of the coarse cereals have lost out to crops such as guar in States such as Rajasthan as

farmers find the latter more profitable. On its part to encourage farmers grow more coarse

34

cereals, the Government raised the support price of maize and bajra to Rs 1,310 a quintal

from Rs 1,175 last year. For ragi, the price has been left unchanged.

“The problem with maize this year is the projection of record crop in the US. The Black Sea

region crop, particularly Ukraine, is also good. The world could face a glut as far as maize

production is concerned,” said Govindarajan.

US corn is quoted at $235-45 a tonne for November delivery in the Far-East, while Indian

corn is offered at $230-35.

One advantage India enjoys is that it is able to delivery in smaller lots, while exports from the

US and other American countries are in bulk only.

“But this year, the crop in Myanmar is good. It enjoys far better advantage being a least

developed nation,” says Govindarajan.

Countries such as Vietnam and Indonesia allow imports of Myanmar corn at 5 per cent

Customs duty, whereas the duty for Indian corn is 35 per cent.

“We see maize prices under pressure this year and you can see the trend,” says Sachdev.

On the National Commodities and Derivatives Exchange, maize November contracts are

currently ruling at Rs 1,269 a quintal and December at Rs 1,270.

In the spot, maize is ruling at Rs 1,515 a quintal in centres such as Davengere in Karnataka.

“Even other coarse cereals, particularly Bajra, could head towards a record crop,” said a

trader.

“This year being one when we are facing elections, the Government may have to come up

with a market intervention operations to keep the prices at the support level,” said

Govindarajan.

The last time the Government intervened in the maize market was in 2007 when the produce

was procured by the National Agricultural Marketing Federation from growers in Orissa.

Since then, Indian maize has found many takers abroad with exports totalling 48.66 lakh

tonnes last fiscal. In addition, the poultry industry’s consumption of maize as feed has

increased rapidly, reducing the need for any Government intervention in the market.

On the Chicago Board of trade, corn prices which had ruled at over $6 a bushel at one point

of time are now ruling below $5. On Friday, corn futures maturing in December ended at

$4.59.

“The fall could have an impact here,” said a trader.

Maize prices slightly up by 0.8% at Rs 13,524 per ton: USGC (BS 19.9.13)

Higher price trend prevails as it is the fag end of the market season 2012-13

35

Maize prices during last week moved up marginally on pan-India average by 0.8% to Rs

13,524 per tonne as the supply is limited and the demand remains strong, the US Grains

Council said.

"Corn prices moved up slightly during last week on pan- India average by 0.8% to Rs 13,524

per tonne and higher than last year by 8.3%," USGC India representative Amit Sachdev said.

This higher price trend prevails as it is the fag end of the market season 2012-13 and hence

the market is somewhat higher as the supply is limited and the demand remains strong, he

pointed out.

End-users, he said, are waiting for the new crop to arrive, which is somewhat delayed due to

late rains in key production centres.

Prices were reported higher in Andhra Pradesh by 2.38% at Rs 13,266 per tonne, Gujarat by

4.6% at Rs 14,847 per tonne, Karnataka by 2.73% at Rs 14,196 per tonne and Tamil Nadu by

1.09% at Rs 15,008 per tonne.

In some of the centres prices were down, specially in Madhya Pradesh where it declined by

4.57% to Rs 13,616 per tonne, Maharashtra by 2.7% to Rs 15,106 per tonne, Rajasthan by

3.46% to Rs 13,967 and Uttar Pradesh by 1.78% to Rs 13,389 per tonne.

Globally, market in the US was very volatile and the old crop prices closed lower.

Meanwhile, in other coarse cereals, pearl millet prices were down 3.6% to Rs 12,809 per

tonne, higher than last year by 3.2%.

Sorghum prices were up by 9.5% to Rs 16,065 per tonne and down 4.7% against last year

prices at the same time.

Barley prices moved up by 1.2% to Rs 11,966 per tonne at the market yard, higher than last

year by 7.8%.

36

37

PULSES

Pulses harvest in this kharif season may be more than last year (ET 26.8.13)

India's pulses harvest during the kharif 2013 season is expected to be between 65 lakh tonnes

(LT) and 70 LT, higher than the 59 LT last kharif season.

"Assuming normal weather conditions over the coming four weeks, we expect pulses harvest

during the kharif 2013 season would be between 65 LT on the lower side and 70 LT on the

higher side," India Pulses And Grains Association (IPGA) Chairman Pravin Dongre told PTI

here.

India's total production for 2012-13 was 18 million tonnes (MT) of which the kharif produce

was 5.95 MT and rabi produce was 12.05 MT.

The kharif season accounts only for 35 per cent of the annual production. The rabi season

(February/March harvest) accounts for a dominant part, Dongre said.

Coming after last year's delayed and aberrant monsoon, this year's widespread rains across

the country have provided tremendous encouragement to growers. This is reflected in area

coverage for various crops, including pulses.

Also, a sharp hike in minimum support price in 2011 and 2012 sent out a strong signal to

pulses growers. Between 2011 and 2013, MSP has been hiked by a hefty 30 per cent.

According to the Weather Watch Group under the Ministry of Agriculture, the area under

pulses, as of August 2, was about 79.5 lakh hectares, against 63.0 lakh hectares in the same

period in 2012. (Acreage data is updated every week.)

Normal area for pulses during the kharif season is 100-110 lakh hectares. Dongre said the

normal acreage will be reached and possibly exceeded. "We will get a final picture by the

end-August," he said.

But he also said that pulses imports will continue, to meet the domestic shortfall. "We expect

demand conditions to remain stable-to-good. With the festival season round the corner,

demand for pulses is expected to pick up," Dongre said.

Pulses, oilseeds, chillies, hit in AP (BL: 29.8.13)

The area under oilseeds and pulses in Andhra Pradesh is likely to fall this kharif. The

monsoon, which started off well in the first week of July, failed to spread out evenly across

the State, hitting sowing activity in several parts.

Against the normal area of 7.76 lakh hectares under pulses, the State reported sowings only in

76 per cent. With sowing schedule coming to an end, farmers say that there could be no

38

further coverage. Sowings in red gram, mainly a kharif crop, covered only 3.66 lakh hectares

or 84 per cent of the area.

The other two noteworthy pulses — green and black gram, were sown in 72 per cent and 55

per cent of their normal areas of 1.95 lakh hectares and 71,000 hectares respectively, a senior

official of the State Agriculture Ministry said.

Groundnut, which is grown in 12 lakh hectares, too is expected to suffer heavily in the kharif.

Groundnut farmers have covered only 71 per cent of the total area and there is little hope of

any increase in area as they would have completed sowings by now. Sunflower crop faces a

complete rout as only 17 per cent (7,000 ha) of the 52,000 hectares has been covered so far.

Castor, too, could fare badly as only 61 per cent of the 1.86 lakh hectares has been covered as

on Wednesday.

The other two major losers could be chillies and onion. Area under chilli dipped to just 22 per

cent of the total 1.66 lakh hectares.

Onion sowings are down to 14,000 hectares or 55 per cent of the total 28,000 hectares.

However, the main crops of paddy, sugarcane and maize are looking up as the coverage is

above normal. Soyabean has gained the maximum, with its plantings doubling to 2.84 lakh

hectares.

Pulses production set to touch record 18.45 mt (BL

29.8.13)

Production of pulses this year is likely to touch a record

18.45 million tonnes (mt), thanks to timely and even

coverage of the monsoon across the country.

This is against 18 mt last year, with rabi crops making up with a 12.05 mt production after

kharif output was affected by deficient rainfall.

“This year, the area under pulses is higher and weather conditions have also been conducive.

This will result in record production,” said Pravin Dongre, Chairman, Indian Pulses and

Grains Association.

According to the Ministry of Agriculture, the total area under pulses this year has increased to

93.25 lakh hectares against the normal 86.18 lakh hectares at this time of the year. Last year,

74.48 lakh hectares had been covered during the corresponding period.

The association, in its outlook for kharif pulses, said that Uttar Pradesh, Madhya Pradesh,

Punjab, Haryana, Maharashtra, Gujarat, Andhra Pradesh and Karnataka, which are crucial for

the crop output, have received excess rainfall this year.

39

According to the India Meteorological Department, the country has received 13 per cent

excess rainfall this year. Of the 623 districts, 440 have received excess to normal rain.

Dongre said that normally, 100-110 lakh hectares are covered under kharif pulses. “Going by

the communication that we have received from various parts of the country, we could be

exceeding the normal acreage. A final picture should be available by next week,” he said.

A hike in the minimum support prices for pulses is also a factor for the rise in acreage of

crops. For example, the support price for tur has been raised to Rs 4,350 a quintal from Rs

3,850 last year. In the last two years, the support prices have been raised by over 30 per cent

for all pulses.

If the weather holds good over the next couple of weeks, kharif pulses production could be

between 6.5 mt on the lower side and 7 mt on the higher side against 5.9 mt last year,

according to the association.

Asked about fears of damage to urad crop in some parts of the country, Dongre said such an

assumption is being made due to damage to soyabean crop in Madhya Pradesh. “We are yet

to get any authentic report on damage to crops,” he said.

To a question on the tur crop in Maharashtra, where too heavy rainfall has affected crops in

the Vidarbha region, he said that the crop was shaping up “satisfactorily”.

The higher production could also result in lower imports of pulses. A unique feature of Indian

pulses scenario is that it is the highest producer, consumer and importer in the world.

“Imports could drop to 3 mt this year, not only because of higher production but also due to

over 25 per cent drop in the rupee’s value since the beginning of this year,” Dongre said.

Initially, the pulses industry had expected imports to rise to 3.4 mt. During 2012-13 fiscal, 3.2

mt of pulses were imported with yellow peas making up 50 per cent.

“Unless prices drop in some origins, it is unlikely that imports will be higher than 3 mt. The

rupee’s fall contributes to 10-15 per cent inflation in pulses,” he said.

Prices could be stable this year with demand picking up during the festival season, he said.

World pulses market likely to be mixed on tight supplies (BL: 30.8.13)

The prospect for the world pulses market is likely to be mixed in 2013 with supplies

tightening slightly despite higher field pea production but smaller harvest of lentils and nearly

unchanged dry bean output, according to Brian Clancey of Canada’s Statpub.

He was addressing the annual China Pulse Import and Export Conference 2013 here,

organised by the China Chamber of Commerce for Foodstuffs and Native Produce.

40

Estimating the world dry bean production at 22.6 million tonnes for 2013, against 22.9

million tonnes the previous year, Clancey said South American harvests were down from last

year following a crop failure in Argentina.

In North America, production was set to fall as crop development was behind normal, he

added.

On lentils, Clancy pointed out that smaller production of 3.3 million tonnes (3.9 million

tonnes) and lower carry-in would result in an overall short supply of a little over 1 million

tonnes. However, lentil production in Canada, which accounts for close to 50 per cent of

world output, will remain stable. Specifically, while harvest of large green lentils will be

lower than last year’s, in case of red lentils, the carry-in is expected to be significantly

smaller.

The estimate of world field pea production in 2013 is placed at 10.6 million tonnes (9.9

million tonnes), with higher harvest in Canada. The expert said demand for peas from the

food and feed sectors was strong, and relatively lower prices created new uses.

However, the world’s leading producer and exporter of yellow peas, Canada, would harvest

slightly lower crop this year as well as have lower carry-in.

Although competition for supply would increase, pea prices were likely to remain strong,

Clancey asserted, adding that acreage would likely expand next year as supplies responded to

higher prices this year.

Kharif pulses output will be higher, but can it be a record? (BL 10.9.13)

After having come down from record high prices last year, the prices of pulses could come

under further pressure this year, thanks to hopes of a better kharif production.

But there is a caveat. The drop in prices will depend on the impact that the hike in diesel

prices will make on the overall production costs of farmers.

The South-West monsoon has been well-spread this year, resulting in production of pulses

rising by nearly 20 per cent.

Estimates made by various quarters put the production around 70 lakh tonnes compared with

59 lakh tonnes a year ago.

41

Kharif production accounts for 35 per cent of the annual pulses production in the country.

Tur, urad and moong are the major pulses grown in kharif season. Kharif pulses production

hit a record 71.2 lakh tonnes in 2010-11.

The area under kharif pulses has increased substantially this year to 99.6 lakh hectares against

85.3 lakh hectares last year. But, it is lower than the normal area of 110 lakh hectares.

Pravin Dongre, Chairman, Indian Pulses and Grains Association, says that pulses coverage

this year has been higher and expectations are that the output would touch 65 lakh tonnes-70

lakh tonnes, depending on the yield.

He also says when the final figures on sowing come out, the acreage could be above the

normal coverage.

The National Collateral Management Services Ltd, which runs a commodity and risk

management services, however, sees pulses production being hit by floods in some parts of

the country, especially Madhya Pradesh and Uttar Pradesh.

On the other side, pulses acreage has gained this year on account of the Government’s efforts

to boost domestic production through higher minimum support prices.

The support price for tur has been raised to Rs 4,350 a quintal from Rs 3,850 last year. In the

last two years, the support prices have been raised by over 30 per cent for all pulses.

The pulses and grains body sees a record output for the whole year at 184.50 lakh tonnes

against the previous one of 182.4 lakh tonnes in 2010-11. The higher production could also

result in lower imports of pulses. Indian is the highest producer, consumer and importer in the

world.

“Imports could drop to 30 lakh tonnes this year. This will also be due to over 25 per cent drop

in the rupee’s value since the beginning of this year,” says Dongre.

During 2012-13 fiscal, 32 lakh tonnes of pulses were imported with yellow peas making up

50 per cent.

“Unless prices drop in some origins, it is unlikely that imports will be higher,” says Dongre.

But there could some impact of the fall-out in the country, he says. “With expectation of

higher output, prices may drift lower. Sadly for the farmers, the higher support price for

pulses could remain only on paper,” says Dongre.

The efforts to woo farmers to grow pulses could be affected if the support prices is not

ensured across the States,” he says.

A better way to handle the issue may be to bring pulses under the public distribution system,

says the association.

Going by the association and trade views, a lower price for pulses could create trouble next

year as growers could shift to alternative crops such as soyabean and cotton.

42

According to the National Collateral Management Services Ltd, production would be higher

this kharif but the final outcome will depend on how the weather behaves until harvest.

PMEAC estimates record pulses, oilseeds output in 2013-14(BS: 14.9.13)

Pulses output expected to be over 20 mn tn in 2013-14

India’s agriculture growth in 2013-14 is estimated to rise to 4.8 per cent from 1.9 per cent a

year-ago on the back of expected higher output of rice, wheat, coarse cereals, pulses and

oilseeds, according to the Prime Minister’s Economic Advisory Council (PMEAC).

In its document titled Economic Outlook for 2013-14 released on Friday, the PMEAC said

that output of pulses is expected to be over 20 million tonnes in 2013-14. In 2012-13, India

had produced 18.45 million tonnes of pulses, the best so far.

If PMEAC’s estimates come true, it will have a strong impact on the pulses import bill in

2013-14. In a year, India imports two-to-three million tonnes of pulses because the domestic

production is less than the demand. As pulses are scarcely cultivated in other parts of the

world, the supplies are always at a higher price.

“If our pulses production in 2013-14 manages to cross 20 million tonnes on the back of good

rains, then import bill will come down significantly,” said a senior agriculture ministry

official. Pulses and oilseeds are among the major components of India’s annual food import.

The country imported around Rs 55,000 crore worth of pulses and oilseeds in 2012-13.

The PMEAC document had some good news for oilseeds as well. It said domestic oilseeds

production in 2013-14 is likely to exceed the all-time high production of 32.5 million tonnes

achieved in 2010-2011. This means that the domestic production of edible oils will be more,

reducing the country’s dependence on imports.

“Edible oil imports in 2013-14 crop marketing year should be around 2012-13 level of 10

million tonnes. Without this bumper production of oilseeds, edible oil imports could have

been over 11 million tonnes as demand is rising steadily,” said a leading oilseeds trader. The

PMEAC also said output of horticulture products (fruits and vegetables), milk, eggs, meat,

and fisheries is expected to grow by almost 4-5 per cent a year.

India produces more than 232 million tonnes of fruits and vegetables annually. According to

experts, this will not only help control food inflation, which was hovering at 11.06 per cent in

August, but will also improve farmer income.

“Usually, fruits and vegetables give two-to-three times higher returns to farmers than cereals.

So if their production increases, it is bound to be beneficial to growers,” Ashok Gulati,

chairman of Commission for Agricultural Costs and Prices (CACP), had recently told

Business Standard.

43

Kharif pulses harvest in 2013 touches 7 million tons (ET: 23.9.13)

Pulses output for kharif 2013 has touched seven million tonnes as per the latest report of

Weather Watch Group in Agriculture Ministry, mainly on account of excellent monsoon and

the government's decision to hike the minimum support price, an industry body today said.

"The overall agricultural production scenario is extremely positive. In addition to the

excellent monsoon, the government's decision to hike the MSP has helped assure

remunerative farm-gate prices.

The seven million tonnes harvest also makes a case for opening up pulses export even if on a

limited scale," India Pulses and Grains Association (IPGA) Chairman Pravin Dongre said in a

release.

The total pulses production stood at 5.9 million tonnes in 2012.

The area under pulses touched 10.2 million hectares compared to 8.8 million hectares in

2012.

The MSP for tur or arhar has increased to Rs 4,300 per quintal in 2013 from Rs 3,200 in

2011, urad to Rs 4,300 in 2013 from Rs 3,300 in 2011 and Moong to Rs 4,500 from Rs 3,500

in 2011.

Similarly, pulse wise planted area has seen growth from last year as tur increased to 32.7 lakh

hectares from 26.7 lakh hectares (LT) in 2012, Urad to 18.6 LT from 16.6 LT and Moong to

18.2 LT from 12.2 LT.

The southwest monsoon has performed well with 8 per cent excess rainfall as on September

4. Out of 36 meteorological subdivisions, as many as 30 have received excess to normal

rainfall.

Agriculturally important states of Uttar Pradesh, Madhya Pradesh, Punjab, Haryana,

Maharashtra, Gujarat, Andhra Pradesh and Karnataka have enjoyed more than normal

rainfall. According to India Meteorological Department, rainfall is expected to be normal for

the rest of the season ending September.

44

45

EDIBLE OILS/ OILSEEDS

India signs deals to export up to 400,000 tonnes new season soymeal (ET 26.8.13)

India has sold 350,000 to 400,000 tonnes of new-crop soymeal for shipment between October

and December on prospects of higher soybean production.

India has sold 350,000 to 400,000 tonnes of new-crop soymeal for shipment between October

and December on prospects of higher soybean production and a weak rupee, an industry

official said.

India, Asia's top soymeal exporter, struck deals at $440 to $480 per tonne, free-on-board

basis, amid volatility in the rupee that hit a record low last week, said Rajesh Agrawal, chief

co-ordinator at Soybean Processors Association of India, a trade body.

"Buyers are mainly south East Asian countries and Iran," he said.

A senior industry official last week told Reuters that India's soybean production is likely to

rise by as much as 18 percent to a record 13.34 million tonnes in 2013/14 from the year

before on the back of higher area.

But heavy rainfall in the top soybean producing central state of Madhya Pradesh in the last

five days and forecast of more rainfall in the next three days raised concerns over the output.

"There won't be damage to crop as it has already grown, but on productivity front there would

be some losses. Yields would be lower due to lack of sunshine," Agrawal said.

Soybean production would be higher than last year, but there will not be a sharp rise in the

output that industry was earlier expecting because of an expansion in soybean acreage, he

said.

As of Aug. 22, there were 12.18 million hectares devoted to soybean cultivation in India

compared with 10.64 million hectares a year earlier, farm ministry data showed last week.

ISOPOM scheme to promote cultivation of soyabean (ET 29.8.13)

Soyabean is a leguminous crop and legumes have long been recognized and valued as "soil

building" crops.

A centrally sponsored Integrated Scheme of Oilseeds, Pulses, Oil Palm and Maize (ISOPOM)

is being implemented in 14 major oilseed growing States to promote the cultivation of

oilseeds including soyabean in the country.

Under the scheme, financial assistance is provided for purchase of breeder seed, production

of foundation seed, production and distribution of certified seed, distribution of seed minikits,

46

distribution of plant protection chemicals/equipments, weedicides, supply of micro nutrients

& improved agricultural implements BSE -4.78 %, supply of rhizobium culture/ phosphate

solubilising bacteria, distribution of gypsum/pyrite/liming/dolomite, distribution of sprinkler

sets and water carrying pipes, training, publicity, etc.

Soyabean is a leguminous crop and legumes have long been recognized and valued as 'soil

building' crops. Soyabeanfixes nitrogen from the atmosphere and adds nitrogen to the soil,

increases soil reserves of organic matter and soil aeration, improves soil structure and soil

water-holding capacity and makes soil easier to till and thus maintains general soil health

status.

In addition, the tillage requirement for growing subsequent crop happens to be minimum

which, in turn, reduces the cost of cultivation and enhances the possibilities of timely sowing.

Wheat, chickpea, mustard, potato etc., are being grown successfully after the harvest of

soyabean with application of recommended doses of nutrients to respective crops.

18-fold jump in soyameal exports to 1.83 LT in Aug (BS 6.9.13)

In the previous month of July, soyameal shipments were at 1.07 lakh tonnes

Soyameal exports jumped more than 18-fold to 1.83 lakh tonnes in August on strong demand

and favourable global rates, an industry body said today.

Shipments of soyameal, used as animal feed, stood at 10,006 tonnes lakh tonnes in the same

month last year due to high domestic prices of the feed that time, Soyabean Processors

Association (SOPA) said in a statement.

In the previous month of July, soyameal shipments were at 1.07 lakh tonnes.

"Exports increased in August as domestic soyameal prices were almost in line with

international market rates. The demand for soyameal has also increased," SOPA

spokesperson said.

In the current oil marketing year (October-September) so far, soyameal exports decreased by

8.86% to 32.99 lakh tonnes compared with 36.20 lakh tonnes in the corresponding period of

previous oil year.

"In comparison with July, supply of soyameal has improved in August and there was hardly

any disparity between the domestic and international prices," SOPA said.

The majority of the exports were to Iran as it imported in the rupee under barter trade system.

Besides, European nation and Indonesia were also major importers of Indian soyameal in

August.

47

India soybean carryover stock to be higher than last year (BS 7.9.13)

Carryover stock is the stock which does not reach the market in its year of production and is

added to the next season's supply as old crop stock

India soybean carryover stock is likely to be higher this year compared with last year, said

trade experts.

"We feel around 500,000 tonne will be carried over to the next oil year which was negligible

last year," said Rajesh Agrawal, coordinator and spokesman, Soybean Processors Association

of India (SOPA).

Holding back by farmers in anticipation of better prices and good output in kharif 2011-2012

are seen as major reasons behind the higher carryover stock, added Agrawal.

Carryover stock is the stock which does not reach the market in its year of production and is

added to the next season's supply as old crop stock.

Supplies showed some improvement after sowing completed in June but it remained below

expectations as there was no selling pressure on producers, said traders.

Trade experts hope for better arrivals in oil year 2013-2014 due to higher carryover stocks

and expectations of good output in the current kharif season.

Traders said heavy and incessant rains caused some damage initially but later situation

improved and hence they expect output equal to or more than last Kharif season.

Last year, India soybean output was around 12.68 million tonne with acreage around 10.67

million hectares, according to SOPA data.

According to Ministry of Agriculture figures, soybean acreage in kharif 2013 (till August 29)

was seen around 12.17 million hectares.

Vegetable oil refineries seek protection from rising imports (BS: 10.9.13)

Saddled already with over-capacity, these are now faced with a surge in imports; urge govt

to raise tariffs

The share of refined oil in overall vegetable oil import seems likely to hit a new high of 40

per cent this oil year (November 2012–October 2013), dismaying domestic refiners.

The major reason is an inverse duty structure in major exporting countries such as Malaysia

and Indonesia, coupled with narrowing import duty differential between crude and refined

oil.

Import of refined oil (termed refined, bleached and de-odorised or RBD oil) jumped to 22 per

cent of the total between November 2012 and July 2013 at 1.8 million tonnes, as compared to

19 per cent or 1.3 mt in the same period of the previous year. Import of crude palm oil was

6.06 mt in the same period as against 5.8 mt in the same period of the previous year.

48

This rising import of refined oil is a threat for domestic refineries, which have built a capacity

of 20 mt. Capacity utilisation is currently only 30 per cent from the peak season’s 75 per cent.

“The share of imports of refined oil might go up to 50 per cent of the total next year if the

trend continues,” said B V Mehta, executive director of the Solvent Extractors’ Association

(SEA), the apex trade body in the edible oil industry.

Malaysia and Indonesia have kept an inverse duty structure, of an export levy of nine per cent

on crude oil and only three per cent on refined oil. With this differential, Indian import of

refined oil works out cheaper than buying crude oil.

“Processing of imported crude oil works out to a Rs 3,000-4,000 per tonne loss for Indian

refineries. We have urged the government to raise import duty on both crude and refined oil

by 10 per cent and to keep the duty differential between them at 7.5 per cent, as advised by

the committee headed by Ashok Lahiri in 2004. Raising the import duty will force the

Indonesian authority to reduce their prices proportionately due to high inventory and nullify

its impact on the retail price in India,” said Dinesh Shahra, managing director, Ruchi Soya

Industries.

Currently, the import duty on crude oil works out to 2.5 per cent and refined oil at 7.5 per

cent.Both Malaysia and Indonesia have around 3.5 mt of surplus inventory which they are

looking to offload. Being the largest edible oil importer, with around 10.5 mt estimated for

the current year, India will be a prime destination.

SEA says many small refining units have started declaring a closure, with loans borrowed

from banks turning out as non-performing assets. There is already over-capacity and the

sudden increase in import of refined oil would worsen the sentiment, said Pradeep Chowdhry,

managing director of Gemini Edibles & Fats, a Hyderabad- based edible oil producer.

Oilseeds output set to rebound on higher acreage in groundnut, soya (BL 11.9.13)

Oilseeds production is set to rebound this kharif season but the jury is still out if it can scale

higher than the record 219.22 lakh tonnes (lt) achieved during 2010-11.

49

“Soyabean and groundnut production will be higher this year. But we are not sure if it can

touch the high that we saw three years ago,” said Govindlal G. Patel, managing partner of

G.G. Patel & Nikhil Research Co. Patel is a renowned crop statistician.

“Going by the acreage, it is clear that we will have a higher crop this kharif,” said B.V.

Mehta, Executive Director of the Solvent Extractors Association of India.

According to the Ministry of Agriculture, till September 6, oilseeds have been planted on

191.6 lakh hectares (lh) against 117.6 lh during the same period a year ago.

But as in the caseof other kharif crops, excess rain could affect the final output since damage

to crops has been reported from some areas of the country.

Soyabean

“The soyabean crop has been damaged in some parts of Madhya Pradesh and Maharashtra

due to excess rainfall. The area under soyabean this year is 122 lh against 107 lh last year,”

said Patel.

Soyabean production could be between 115 lakh tonnes (lt) and 120 lt against 107 lt, he said.

“Even if we get one tonne from a hectare, soyabean production should go up by 15 lt.

However, if we are to account for the damage, then maybe, we could get an additional 10 lt

over last year,” said Mehta.

Though continuous rain from June to August-end had threatened the soyabean crop, sunshine

during the last two weeks has raised hopes of a better crop.

Soyabean is the main kharif oilseeds crop accounting for over half the total production with

groundnut, sesamum, nigerseed and sunflower making up the rest.

Groundnut

“Groundnut is making a comeback this year after the crop faced problems in the last two

years,” said Mehta.

According to Patel, the groundnut crop in Gujarat could be 42 lt this year, though the crop

requires another spell of rainfall.

“Prospects for another spell of rainfall are bleak going by forecasts. Those who have

irrigation facilities are better off, while others may not be able to take advantage of excellent

weather earlier this season,” said Patel.

“The higher area under kharif oilseeds could get translated into 15 lt-20 lt of additional

oilseeds,” said Mehta.

The higher production could keep oilseed prices either at current levels or a little lower.

“Over 60 per cent of our vegetable oils need is met through imports. So, prices will tend to

tow the global trend,” Patel said, adding that prices could rule around last year’s average.

50

“Prices could come under pressure because this is also the peak palm oil production period,”

said Mehta.

However, with demand for edible oils rising by seven per cent every year, the additional

production would go only toward meeting it. “This will keep prices steady,” said Patel.

Imports are expected to be around this season’s level of 105 lt-110 lt. From November to

August of the current oil season, about 80 lt of vegetable oils have been imported. “Another

26-30 tonnes could arrive by October, taking the total imports to nearly 100 lt,” said Mehta.

“The new crop will start arriving in November and we could see the arrivals checking

imports,” he said.

“Imports will also depend on the rupee exchange rate. Any fall in the rupee will make

imports costlier and hence, it will affect shipments,” said Patel.

Soybean crop set to boost exports to a 6-year high (BS 14.9.13)

Best monsoon rainfall in two decades is set to boost the oilseed crop to an all-time high

Soybean meal shipments from India, Asia's biggest supplier, may reach a six-year high next

season, as the best monsoon rainfall in two decades is set to boost the oilseed crop to an all-

time high, a processors' group said.

Exports in the year starting October 1 may exceed 4.1 million tonnes (mt) estimated for 2012-

2013, said Rajesh Agrawal, a spokesman for the Indore-based Soybean Processors

Association of India. That will be the highest sales since the 4.9 mt in 2007-2008. Output of

soybeans, crushed into meal for animal feed and oil for cooking and biofuel, may climb to a

record 13.5 mt in 2013-2014, the US Department of Agriculture's Foreign Agricultural

Service said in a report September 7.

Higher supplies of the meal may curb prices in Chicago, up 29 per cent from a 17-month low

in August, as soybeans rallied on concerns dry weather will curb yields in the US Midwest,

the largest growing region in the world's biggest producer.

In India, soybean futures are set for a fifth year of gain as demand for animal feed rose from

buyers in Iran, Japan and Southeast Asia.

"Indian soybean meal continues to be in great demand from traditional buyers in Europe and

Southeast Asia," Agrawal said in a phone interview on September 11. The nation has

contracted to export about 850,000 tonnes from the new crop, with stockpiles of about

500,000 at the start of the season, he said.

Soybean meal for December delivery was at $446 per 2,000 pounds on the Chicago Board of

Trade by 12:25 p.m. in Mumbai. Prices reached $345.30 on August 6, the lowest since

February 28, 2012. Soybeans for delivery in November traded at $13.9125 a bushel, heading

for a sixth week of gain.

51

Rupee impact

A weakening Indian rupee, down 13 per cent against the dollar this year, may also boost

incentives for exporters to increase shipments. The currency is the worst performer among 24

major emerging economies in the past six months on concern that foreign capital outflows

will accelerate as the US Federal Reserve prepares to reduce monetary stimulus.

"With a devalued currency, India can emerge as a significant exporter of corn, wheat and

soya meal in the months ahead," Dorab Mistry, director at Godrej International Ltd, said in

remarks prepared for a conference in Singapore Thursday.

While a weaker currency makes supplies attractive, buyers adjust their bids to factor in the

exchange rate moves, said Agrawal. Exporters have contracted shipments between $440 a ton

and $500 a ton free-on-board this month compared with the average of $571 in July, he said.

India, which competes with top exporters Argentina and Brazil, has a freight advantage of

$15 a tonne to $20 a tonne in South-East Asian markets, he said.

"There is big competition with South America," said Sandeep Bajoria, chief executive officer

of Sunvin Group, who expects better margins for Indian soybean processors because of a

weaker rupee. Still, the "downgrading of the soybean crop in the US has improved India's

prospects."

Palm oil prices could fall 13% by Jan 2014 as output surges: Mistry (BS: 22.9.13)

Rising biofuel demand to be fed by increased production

Increasing demand from the biofuel industry is unlikely to take crude palm oil (CPO) prices

out of a 2,200-2,400 ringgit range in the next few weeks and there are chances prices could

hit a four-year low of 2,000 ringgit in January 2014 if Brent crude drops below $100 per

barrel, prominent industry analyst Dorab Mistry said on Sunday.

Crude palm oil is being used increasingly as an additive in fossil fuels, as it can cut costs and

reduce environmentally damaging emissions. But production is also rising as farmers in top

producers Indonesia and Malaysia plant more of the crop.

Global palm oil production in the vegetable oil year starting from October 1, 2013, is set to

rise by 3.5 million tonnes over the current year, Mistry, who is head of vegetable oil trading

with Indian conglomerate Godrej Industries, told the Globoil India conference.

Global demand for palm oil from the bio fuel industry is likely to rise by 2 to 2.5 million

tonnes, while demand from the food industry could rise by 3 million tonnes, he said.

"Despite the expansion of demand due to biofuels, I do not expect a bull market," Mistry said

in a speech at the Globoil India conference. Rising demand from the biofuel industry could

keep crude palm oil (CPO) prices in a narrow range of 2,200 to 2,400 ringgit in the short

term, Mistry said.

52

But by January 2014, they could fall 13 percent from current levels to 2,000 ringgit, if Brent

crude falls below $100 per barrel and prospects of a bumper soy crop in South America

surface.

A contrarian view was put forward on Saturday by James Fry, chairman of commodities

consultancy LMC International, who said CPO prices may rise nearly 9 percent to 2,500

ringgit per tonne by February 2014 from current levels as Indonesia's inventories will fall

now it has decided to promote biodiesel consumption.

On Friday, benchmark palm oil futures on the Bursa Malaysia Derivatives Exchange had lost

0.9 percent to close at 2,297 ringgit per tonne, bringing prices down 6 per cent so far in 2013,

after a plunge of 23 percent in 2012.

"The fundamentals of the oilseed and vegetable oils complex are clearly bearish. They can

turn bullish only with a major weather problem," Mistry said, as the peak palm oil production

season comes in the next few months and bumper output of soybean and sunflower is

expected.

Oil palm trees in Indonesia and Malaysia - the world's top producers that make up about 90

percent of global palm oil supply - typically produce more fruit in the second half of the year

after resting in the first half.

Mistry lowered his figures for palm oil output in Malaysia and Indonesia by about 2 percent

and 3.3 percent respectively for the calendar year 2013 as the start of the higher production

cycle was delayed.

But he expects a consistent rise in inventories in Malaysia and Indonesia for the next several

months from September.

India, the world's biggest importer of palm oil, could see demand stagnating as local buyers

turn to soy oil and sunflower oil alternatives to supply domestic refiners who cannot compete

on refined palm oil with cheap exports from producing countries.

In the 2013-14 edible oil year starting from November 1, 2013, Mistry estimates India's

imports of palm oil at 8.3 million tonnes, compared with 8.35 million tonnes in 2012-13.

"Indian refiners are the gate-keepers to the Indian market. They determine which oil is to be

imported and processed. If they face competition from processed and refined palm oil

imports, will they import more palm or will they import more unrefined soft oils? India's

vegetable oil production in 2013-14 is likely to rise by at least 500,000 tonnes from this

year," he said.

Edible oil imports may surge to 16 million tonnes in 2020/21 (ET 23.9.13)

Rising prosperity in rural areas due to state-run employment generation schemes and

increasing urbanisation would be key demand drivers, said Govindbhai G. Patel.

53

Edible oil imports are likely to surge by 54 per cent to 16 million tonnes in 2020/21 as

demand rises at a much higher rate than local supplies, a leading trade expert said in a

presentation at a conference on Sunday.

Rising prosperity in rural areas due to state-run employment generation schemes and

increasing urbanisation would be key demand drivers, said Govindbhai G. Patel, managing

partner of GG Patel & Nikhil Research Co.

"All India per capita consumption is 13.80 kg, but in many states it is about 10 to 11 Kg.

Consumption growth in these states will be more ... rising labour income is increasing the

income level of people who are consuming much below the all-India level," he said.

India's edible oil imports in the 2012/13 year ending on Oct. 31, 2013, would be 10.4 million

tonnes, he estimated.

He said India's edible oil demand was set to jump by 46 per cent to 25.2 million tonnes in

2020/21, while local supplies are likely to rise by 37 per cent to 9.2 million tonnes.

Oilseeds output seen at record high: Farm Minister Sharad Pawar (ET: 24.9.13)

Summer sown oilseeds output is seen hitting a record high at 23.93 million tonnes in the

2013/14 crop year aided by all-time high soybean output, Farm MinisterSharad Pawar said on

Tuesday, helped by ample monsoon rainfall.

Soybean output has been estimated at 15.68 million tonnes, up 6.8 per cent from a year

earlier, according to the farm ministry's first estimates for the year that began in July.

The minister put the output estimate for cotton at 35.3 million bales of 170 kg each, up 3.8

per cent from a year ago, and also a record high.

Earlier, Farm Commissioner JS Sandhu said the total summer grains output was likely to

increase slightly from last year to 129.32 million tonnes in 2013/14.

India's crop year runs from July to June.

54

55

MILK

Government to give Rs 703 crore to states under intensive dairy development

programme (ET : 28.8.13)

The department of animal husbandry dairying and fisheries has been implementing a credit

linked central sector scheme 'Dairy Entrepreneurship Development Scheme' (DEDS) under

which financial assistance is provided for purchase of dairy processing equipment for

manufacture of indigenous milk products.

Under the scheme, 25 per cent of the unit cost (33.33 per cent for SC/ST farmers) as back

ended capital subsidy subject to a ceiling of Rs 3.00 lakh (Rs 4.00 lakh for SC/ST farmers) is

provided under bankable projects through National Bank for Agriculture and Rural

Development (NABARD).

Financial assistance is also provided for Dairy Development under Strengthening

Infrastructure for quality and clean milk production and states can also avail financial

assistance for this purpose under Rashtriya Krishi Vikas Yajana.

The 'Intensive Dairy Development Programme', a centrally sponsored scheme has been

implemented across the country in hilly and backward districts and other districts where

investment was less than Rs 50 lakh in Operation Flood Programme on 100 per cent grant-in-

aid basis.

Milk may cost more as weak rupee lifts export prospects (ET 2.9.13)

Consumers may soon have to pay more for milk following short supply. Private dairies,

which are exporting milk powder and other products to cash in on a declining rupee, have

raised the procurement price by Rs 2 per litre to procure more milk.

The move has triggered competition for milk and this is likely to be used as an excuse for

increasing the consumer price in the coming days. Thanks to the rupee's depreciation, milk

powder export has become profitable.

However, export accounts for less than 1% of the country's milk production and it should not

impact the availability of milk in the country. Unlike other states, dairies in the north and

Maharashtra are focused on conversion of milk into products such as powder, casein, cheese

and ghee. Private dairies like Parag Milk Foods, Dynamix and a few co-operatives dominate

the milk product market.

"Global prices are very good in the past one month. The depreciation of the rupee has helped

in getting a good export realisation. We have increased procurement price by 3 per litre in the

past 10 days," said Devendra Shah, chairman, Parag Milk Foods. More procurement by milk

product makers has created a shortage of milk for dairies like Mahanand which are the major

56

suppliers of liquid milk in Mumbai. Vaishali Nagawade, chairman, Mahanand , and director,

National Dairy Development Board, said, "We have to increase the farmer's price by Rs 1.5

per litre and the commission paid to chilling centres by Rs 3 per litre while the government

rate stays at Rs 18.5 per litre for cow's milk."

Dairy market to grow by 13-15 pc till 2019-20: Report (ET 11.9.13)

The country's dairy market will continue to grow at about 13-15 per cent annually till 2019-

20, on increasing consumption of value added products and the value chain becoming more

and more organised, according to a report by Rabobank.

"India dairy is emerging as a strong consumption story, with the market growing at a pace.

We expect this trend will gain momentum over the next 4-5 years driven by increasing

consumption of value-added products and the formalisation of the value chain," the report

said.

According to the report, Rabobank expects this segment to grow at a CAGR of 13 to 15 per cent until

2019-20.

The market share of value-added products is likely to increase to 31 per cent from the current

21 per cent during this time period, it pointed out.

The main factors driving growth are increased consumer interest in higher protein diets,

greater affordability due to growing disposable incomes and rising awareness and availability

of dairy through channels such as organised retail and food service segments, it said.

The country's total organised diary sector is about USD 10 billion in 2012-13, comprising

cooperatives and private players who control the supply chain linkages.

"For years, the Indian dairy market has remained an enigma for global dairy players," said

Rabobank Analyst Shiva Mudgil, adding that currently, however, the market is in a transition

phase.

High market growth and favourable market conditions may make now the right time for

global players to engage with the Indian dairy sector, he pointed out.

India's large consumption market, its existing milk supplies and established consumer

preference for dairy products, has encouraged global dairy companies to engage with India in

the past, the report said.

However, the challenging environment, with its informal fragmented supply chain, raw milk

quality concerns, small base for value-added dairy products and ever-changing trade

regulations, proved a challenge and a strong disincentive.

Nonetheless, India's formal dairy market has shown strong growth in recent years, which is

likely to accelerate due to product innovation, enabling government policies and industry

consolidation.

57

Rabobank anticipates this acceleration will help improve industry margins by attaining

greater scale, higher capacity utilisation and an increasing contribution from value-added

products in total dairy revenues.

Rs 1,250-crore Indian cheese market expected to grow 20% annually (ET 13.9.13)

For entrepreneurs cheese is milk’s leap towards prosperity – the market for cheese is Rs

1,250 cr and forecasted to grow at 20% annually.

An American wit had once described cheese as milk's leap towards immortality. For a lot of

entrepreneurs in India now cheese is milk's leap towards prosperity - the market for cheese is

Rs1,250 crore currently and forecasted to grow at an impressive 20% annually.

And it's going to get cheesier. There are 3,000 cheese varieties globally, experts say. India's

stores and delis offer about 40 varieties. The scope for growth is huge. Europe and even the

US, those in the cheese business say, are saturated markets. India could be the next big thing.

Here's a small but telling example of how far the cheese business has travelled. Pune-based

Parag Milk Foods used sell milk, butter, ghee etc under the brand Gowardhan. From 2008

onwards, it's a player in the cheese business, with the brand name Go, selling cheddar and

mozzarella, and planning to introduce emmental.

The 'Gowardhan to Go' story tells us that urban India's long affair with tinned processed

cheese is getting over. The current brisk growth is being driven by metropolitan Indians

discovering 'real cheese' - both mass market and premium, and both foreign and local brands.

A lot of that cheese is going on top of the pizzas that sell here. India is Domino's Pizza's third

larget market, after the US and the UK. Domino's sources all its mozzarella locally. "We are

working with multiple companies... regional cheese processors have invested in additional

factories and growing along with us," CEO Ajay Kaul said.

Direct cheese consumption is growing as briskly. Global firms and brands like Kraft Cheese,

French cheese maker Fromageries Bel and Arla Cheese have found India as appetising as

Indians have found their cheese. Flander, one of the oldest regional players in India, has

shifted from a 6,000 sq ft farm on the outskirts of Delhi to a 25,000 square ft factory at the

Bahdurgarh industrial zone.

The most exciting story, though, is that of relatively new local cheese-makers.

Puneet Gupta, 40, set up Exito Gourmet three years ago to sell "Impero" brand of cheese to

high-end retail stores such as Food Hall, Le Marche, Sugar and Spice and Hyco.

A private-equity firm - Gupta won't name the PE - has acquired 20% equity in his company.

"From manufacturing 10 tonne cheese in a month we are now doing 30 tonnes and expect it

to grow steadily by 20%," said Gupta. And he's getting adventurous. His new product is a

flavoured ricotta made from sheep milk whey, gouda and cheddar cheese.

Mohit Khattar, CEO, Godrej Nature Basket, which runs 29 stores across six cities, says that

7%-10% of daily sales came from cheese and sales grew 55% in the past four to five years

"We are catering to a market ready to pay money for good quality product" he said. Godrej

58

Nature Basket offers not just the relatively familiar varieties like gouda, parmesan and edam.

Brie and goat cheese -chevere - are also going to be on offer.

Cheese is a hit in Future Group's gourmet-format Foodhall stores. Avni Biyani, concept head

of Foodhall, said cheese sales were growing at 30-40% in her stores. And even premium

stores like Foodhall don't depend on imports. Not just Exito Gourmet but Pondicherry-based

Mango Hill also gets shelf space.

Not that premium imported cheese has no takers. Anoop Chopra, marketing head at Dairy

Craft India Ltd, says Parmiggiano Reggiano, which sells for Rs1,700 per kg, gets plenty of

customers.

So, what's Amul, whose processed cheese was once pretty much the only cheese in India,

doing to cater to the new market? First, Amul says its processed cheese is still a winner. It's

doubling its processed cheese capacity to 100 tonnes. Second, it says it's no slouch when it

comes to 'real cheese' - Amul is selling gouda and emmental.

Lack of enough good quality milk and uneven quality of storage and processing facilities are

holding back a bigger boom in the cheese business. Cheese entrepreneurs hope these

constraints will lessen over time. So should urban Indians. There are 2,000-plus cheese

varieties we still don't get in this country.

59

VEGETABLES - POTATO/ ONIONS

Onion production estimated to fall by 5 per cent in 2012-13: Sharad Pawar (ET: 27.8.13)

Onion production in the country is estimated to fall by 5 per cent in the crop year 2012-13

(June-May), Parliament was informed today.

Country's onion output stood at 175.11 lakh tonnes (LT) in the crop year 2011-12, while in

the year 2012-13 production is estimated at 166.55 lakh tonnes (provisional), Agriculture

Minister Sharad Pawar said in a written reply in the Rajya Sabha.

Replying to the question on domestic demand of onion, the Minister said: "The domestic

demand for onion consumption is estimated at approximately 10 lakh tonnes. Besides,

approximately 15-20 lakh tonnes are exported, one lakh tonnes are used for seed production

and 3-5 lakh tonnes are processed every year."

He added that the National Agricultural Marketing Federation of India (NAFED) procured

676.18 tonnes of onion valued at Rs 230 lakh in 2010-11, whereas in 2011-12 procurement of

onion stood at 944.35 tonnes valued at Rs 68.30 lakh in 2011-12.

"NAFED did not procure onion in 2012-13," he said. Onion is currently available at Rs 50-70

per kg in the national capital. Nafed is offering onions at a price of Rs 40 per kg through its 5

outlets and mobile vans.

Potato will not hurt like onions (ET : 27.8.13)

Jalandhar-based farmer Jang Bahadur Singh Sangha, acclaimed as world's largest potato

grower at World Potato Congress at New Zealand in 2009, says the humble maize is his new

calling. Sangha, who produces around 50,000 tonne of the tuber annually, is steadily shifting

to maize on 5,000 acres of leased land in district of Jalandhar, Ludhiana, Kapurthala and

Nawashahar that grew tuber in the last four-decades.

Sector experts credit Jang Bahadur with corporatising potato farming to unmatched levels in

India. His potato production is almost 0.12 % of total 40 million tonne potato production of

India in 2012 as per data of the National Horticulture Board. His family also sells almost 10%

of the total seed potato in the country.

The diversification of the Sangha family to maize is sure to set new price trends in retail

market or at least potato future contracts on the commodity bourses. As for himself, Sangha

says the price of potato is still a function of marketing forces and nature. The Tuber Army

The family runs a fleet of 175 John Deere tractors, a dozen-odd cold storages, greenhouses

spread over several acres and a modern tissue culture centre.

The family manages businesses spread over 5,000 acres across five districts in Punjab, and

the produce is sold in West Bengal, Gujarat, UP, Karnataka, Kolkata, Mumbai and Delhi.

"My father started it all with five acres...I just chipped in with new technology in the last one

decade," Sangha says.

60

Soon after Master of Science degree from Cornell University, Ithaca, New York in Fruit &

Vegetable Science with specialization in biotechnology based seed potato production from

the US in 1994, he introduced tissue culture technology to produce disease resistant seed

potato. Sangha's introduced virus-free seed potato based on micro-propagation technique that

pushed up the yields.

"Having made a niche market for our products I focussed to add brand value to our products,"

he says. While most MNCs had limited success at contract farming, Sanghas scripted

unparallel story in leased-farming in the country. In the last four-decades, a growing number

of farmers have chosen to lease out their land to Sanghas for a fixed yearly payment.

"An MNC never commit assured returns to farmers and their strict specifications for

procurement are anti-farmer. Companies shy away from sharing risk with farmer," he says.

Potato Gambit The genesis of the Sanghas megafarm enterprise lies in another diversification

tale that took place in early 1960 when Hardev Singh, his father, laid the foundation of

commercial farming of seed potato while the most farmers opted for wheat and paddy.

This rosy potato story was played alongside the Green Revolution during 1970 and 80. The

young Hardev armed with a MSc degree in vegetable crops from Indian Agricultural

Research Institute, New Delhi, started with two-acres of ancestral land in the sixties which

later he expanded into a commodity empire.

For him, the Land Ceiling Act that disallowed ownership of more than 17 acres of land came

as a big hurdle. So he started leasing land of farmers on yearly basis to grow potato seed. In

the initial years, Hardev faced stiff competition from naturally-grown seed potato grown in

the hills but the demand for sheer volumes in domestic market egged him on.

Land on lease from farmers is taken on yearly basis, a practice going on in the six-decades.

"Mutual trust is the collateral between farmer and us," Jang Bahadur says. But the Land

Lease Act framed by the Punjab government, a few years ago, has given legality to leasing.

Under the Act registered document of leased land could be entered into the revenue records.

"Mostly people engaged in other occupations rent out their land," Sangha says.

Sangha claims that thanks to modern tilling techniques over the years almost 5,000 acres land

categorised as barren have been made fertile in Jalandhar. Up, Up the Value ChainSangha's

latest diversification is driven by the changing trends in the consumer market. "Feed for dairy

and poultry is pushing demand for high-yielding maize. We have started growing spring

maize in the last few years.

This year we have grown the coarse grain over 1700 acres," he says. To push maize as major

crop Punjab needs to set up an ethanol plant, he adds. But despite the economies of scale,

farming is fraught with risks, feels Jang Bahadur. In the last three years crops outside the

ambit of minimum support price have suffered.

Central government policies that have doubled the cost of inputs in the last three years have

gone anti farmer. Like any other farmer his major worry is rising inputs

costs of diesel, fertilizers, pesticides and labour costs. Farming is still a compounded risk

with marketing forces and vagaries of weather playing crucial role, he says.

61

"We need investment in cold storage, better technology to boost agriculture. We have seen

three years of low price due to oversupply in the market," he says. He feels government could

include potato, a perishable with 10 months of shelf life, under the Food Security Ordinance.

But it is a far-fetched dream given state of storage infrastructure for cereals in the country.

"We have contributed in scaling up potato cultivation across the states so there cannot be

major crop failures in the country," he says. It has ensured that the spike in price of potato is

not usually very high. "That is why potato will not hurt like onions," he says.

Delhi High Court asks Government to take steps to bring down onion prices (ET:

29.8.13)

With onion prices soaring, the Delhi High Court today asked the Centre and Delhi

government to take steps to ensure that prices of kitchen staple are brought down so that

common people do not suffer.

The high court hearing a PIL filed by a social worker, Poonam Jain, alleging inaction of the

governments in controlling the onion price, said, "...Steps to be taken by the Delhi

government and Centre to ensure that the onion price issue will be addressed so that common

people should not suffer."

A bench of acting Chief Justice B D Ahmed and Justice Vibhu Bakhru passed the order and

disposed of the plea after Additional Solicitor General (ASG) Rajeeve Mehra, appearing for

the Centre, assured the court that major steps have been taken to control the prices.

Placing before the bench a status report filed by the Department of Consumer Affairs

ofAgriculture Ministry, the senior law officer said the onion price situation depends on its

production and arrival and domestic onion prices tend to peak during September to

November and fall during January- March every year.

"Generally onion storage gets depleted by August- September," the lawyer said.

He further submitted that the central government has sent a request to Maharashtra, which is

the highest onion production state, for steady supply of the commodity to Delhi.

The bench recorded the senior counsel's arguments in its order and said, "ASG assures that

the Centre will aggressively persuade Maharashtra for sufficient supply of onions to Delhi so

that the issue can be addressed."

Arguing for Delhi government, standing counsel Zubeda Begum told the bench that the onion

price was more than Rs 60 for few days but now it has come down to Rs 45 in Mother Dairy

outlets.

Petitioner Poonam Jain's counsel had submitted that common people are suffering due to

governments' failure to curb the hoarding in the city as well as in Maharashtra causing scarce

supply of the onions.

62

The plea had sought to direct respondents to take special measures to supply the onions in the

market in sufficient quantity and the provision of Essential Commodities Act to be invoked to

control the rising price of onion.

Onion exports drop by 81% in August after curbs on sale (ET: 9.9.13)

India's onion exports fell sharply by 81 per cent to 29,247 tonnes in August as compared to

same period a year ago, after the government imposed curbs on the overseas sale to improve

domestic supply and check prices.

On August 14, the government had imposed a minimum onion export price of $ 650 per

tonne to restrict shipments and control prices after it touched Rs 80 per kg in retail markets

on supply crunch. The retail price of onion continues to rule at Rs 50-60 per kg in most parts

of the country.

According to the data maintained by the cooperative Nafed, onion exports declined to 29,247

tonnes in August this year from 1,56,283 tonnes in the same month last year.

In value terms too, shipments dropped to Rs 125.46 crore from Rs 164.92 crore in the review

period.

During the April-August period of this fiscal, onion exports fell to 6,97,028 tonnes as against

8,50,634 tonnes in the year-ago period. However, in value terms, the outbound shipments

rose sharply to Rs 1,341 crore from Rs 844 crore in the said period.

According to traders, exports in the coming weeks would depend on the supply situation. The

supply of onion is limited during the lean period of July-October, as 60 per cent of produce is

grown during the rabi season of March-June.

The rest is produced during the Kharif season of October-- December and late Kharif season

of January--March period.

India, the second largest producer of onion in the world after China, is estimated to have

harvested 166 lakh tonnes of the staple vegetable last year. The country had earned Rs 2,294

crore from the export of 18.22 lakh tonnes of onion in FY 2012-13.

Onion prices rise despite arrival of imported stock (BS 17.9.13)

Traders say imports insufficient, crop loss in Andhra Pradesh adds to supply issues

Onion prices shot up by 16 per cent on Monday in major markets despite confirmation of the

commodity’s import from various sources to meet domestic demand. In the benchmark

Lasalgaon, Asia’s largest vegetable market, the model price shot up by a staggering 16.5 per

cent to Rs 5,300 a quintal. Similarly, the commodity in Mumbai’s wholesale market jumped

by 12.50 per cent to Rs 5,400 a quintal.

63

Traders believe the imported quantity is insufficient, looking at the ensuing festival demand.

While around 125 tonnes out of 300 tonnes imported from Egypt was released on Monday,

the remaining quantity faced legal hurdles. Importers are already on the way to submitting all

papers and clear hurdles for early release.

“It is very difficult to justify the price rise, as the average quantity of release (arrivals) now

has been almost in sync with that of a few months ago. This indicates that supply has been

adequate from domestic sources,” said R P Gupta, director, National Horticulture Research &

Development Foundation (NHRDF). Trade sources believe some truckloads have reached

Delhi and a large order placed to import the commodity from Afghanistan. Also, India has

placed orders to import from China, Pakistan and Iran.

Traders have received permission to import 24,000 tonnes of onion this year to meet rising

demand. National Agricultural Cooperative Marketing Federation (Nafed) had last week

floated a tender to import onion from Pakistan, China, Iran

and Egypt. PEC Ltd had floated a tender to import of onion

early last week.

Private players are also keen to import the commodity to

meet domestic demand. A Mumbai-based trader and

exporter of onion, however, said that India was facing acute

shortage of onion. The new season crop has been delayed,

especially from Andhra Pradesh, due to intermittent rainfall.

There is talk of crop damage in Andhra Pradesh. Given that

the supply remains poor, the price is bound to remain upbeat

at least for the next four-six weeks.

Meanwhile, the new season crop has started hitting

Karnataka’s markets. In Bangalore, total arrivals were recorded at 12,323 tonnes on Monday

as against a mere 3,822 tonnes on Friday. Despite higher arrivals, onion prices remained

robust in Bangalore market. Traders are not going to sell onion at lower prices as the landed

cost works out higher due to rupee depreciation.

Meanwhile, onion exports from India fell sharply by 81 per cent to 29,247 tonnes in August

as compared to the same month a year ago, after the government imposed curbs on the

overseas sale. India, the second largest producer of onions in the world after China, is

estimated to have harvested 16.6 million tonnes of the staple vegetable last year.

Onion from Afghanistan arrives, to help contain prices (ET: 20.9.13)

With onion prices continuing to remain high, Punjab based traders have started importing it

from Afghanistan through Attari-Wagah land route in Amritsar.

While 400 tonnes of onion came from Afghanistan yesterday, traders said about 2,000 more

tonnes of the vegetable will come in from that country in the next 7-10 days.

"Considering the severe shortage of onion in the country which pushed up the prices quite

high, we decided to import onion from Afghanistan.

64

"A consignment of 350-400 tonne of onion has already been imported and we expect 1,500-

2,000 tonne of onion to flow into India from there through Attari-Wagah land route,"

Amritsar Exports Chamber of Commerce, President, Rajdeep Uppal told PTI over phone.

As many as 10 traders from Punjab and Delhi imported onion from Kabul. traders said.

Earlier, Amritsar based traders had tried to import onion from neighbouring country Pakistan.

They had even asked their counterparts in Pakistan to seek permission for onion export to

India through Attari-Wagah land route in a bid to enhance bulb's supply. But that could not

materialise, traders said. The imported onion from Afghanistan would be sold in the markets

of Punjab, Jammu and Kashmir and even Delhi, traders said.

"Though the crop imported from Afghanistan is not superior to our crop. But its supply will

certainly bring down the onion prices in the markets," said Uppal. Retail prices of onion are

ruling at Rs 70 per kg in Punjab and Chandigarh. India last imported onions from Pakistan in

January, 2011 when it faced massive shortage of supplies.

CCI seeks information from state governments as onion prices soar (ET: 22.9.13)

With onion prices continuing to rule high across the country, fair trade regulator CCI is

seeking information from state governments to check whether market entities are indulging in

cartelisation.

Competition Commission of India (CCI), which keeps a tab on anti-competitive practices, is

looking into the issue of persisting high prices of onion in the recent months.

Currently, they are hovering in the range of Rs 65-80 per kg in the retail market.

Sources said the Commission has started writing to state governments seeking information on

their onion markets.

Maharashtra, Gujarat and Andhra Pradesh are among the major onion producing states.

There have been concerns voiced that cartelisation and hoarding by traders and other entities

is jacking up the prices of the edible bulb.

According to sources, CCI will need strong evidence on anti-competitive practices if it is to

investigate the issue.

The fair trade regulator is now trying to get more information on trends and practices with

regard to onion markets, they added.

On rising onion prices and possibility of unfair trade practices, CCI Chairman Ashok Chawla

said the Commission is looking at whether the issue needs to be investigated.

"We will see how it plays out further. We will see whether it warrants an examination or not,"

he told PTI.

65

Onion prices have been a politically sensitive issue and the steep jump in rates has come

when elections are scheduled in some states within a few months.

"This is again an issue on which the Commission had spent some time in the past...and come

to a conclusion that the markets don't seem to be functioning very well. But there was no

evidence of cartelisation," Chawla said.

He noted that if there is hoarding of the commodity, then the matter would not fall under the

ambit of the Commission.

Chawla said: "Press reports again indicate that for some reason there has been an increase in

onion prices. They have been talking about hoarding etc.

"Now if it is hoarding, that is what the newspapers seem to be suggesting, then it is not for us

to deal with it. It is for the government and the state governments to handle. We will see and

at this stage we cannot say anything. We will see if we need to examine it further."

Nafed holds meeting with onion importers to help fast clearance of imported stock (ET:

24.9.13)

NAFED today organized a meeting, in Mumbai to understand and resolve issues relating to

clearance of imported stock of Onion arriving at JNPT, Mumbai, with regards to phyto-

sanitary and food security issues.

Chaired by Managing Director (NAFED) Shri Sanjeev Chopra, the meeting was attended by

leading onion exporters / importers and senior officials of FSSAI. The meeting covered

exhaustively all ground problems being faced by importers and majority of the issues were

resolved to the satisfaction of all the stake holders.

It is expected that there would be a higher production of onion in the kharif season across the

country which will ease the pressure on onion prices. There is a likelihood of arrivals of

around 600 tonnes of imported onion at Mumbai within the next week, which will further

increase supply.

66

67

SUGARCANE / SUGAR

Sugar output pegged at 24.8 million tonnes in 2012-13: Thomas (BS: 27.8.13)

India produced 25.8 MT of the sweetener in the 2011-12 sugar marketing season

Sugar production in India is expected to decline by 10.8% to 24.8 million tonnes (MT) in the

current sugar marketing season, which will end next month, Parliament was informed today.

India had produced 25.8 million tonne of the sweetener in the 2011-12 sugar marketing

season (October-September), Food Minister K V Thomas said in a written reply to Lok

Sabha.

"The total sugar production in the country is provisionally estimated at about 24.8 million

tonne, which is sufficient to meet the provisionally estimated domestic demand of about 23

million tonne during the current season," Thomas added.

According to reports from the sugar mills, the output of the sweetener in the 2012-13 sugar

season has been lower in Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh

compared to the previous year, he informed the house.

Earlier this month, Agriculture Minister Sharad Pawar had said sugar production in the

marketing year 2013-14 may exceed 24.5 million tonnes level achieved this year on hopes of

higher yields due to good rains.

Thomas, however said that sugar stocks in India, world's second biggest producer and largest

consumer of the sweetener, are adequate to meet domestic consumption.

"With the sufficient carryover stocks and likely sugar production during 2013-14 sugar

season, there would be adequate stocks of sugar to meet the domestic requirement, he added.

In a separate query on sugar subsidy and prices, the Food Minister said the decontrolling of

the sector, with partial removal of levy obligation and doing away with the regulated release

mechanism, will improve the health of the sugar firms and promote sustainable development

leading to better prices and availability of the sweetener.

Besides, to make sugar available in the Public Distribution System (PDS), government has

asked the states to procure it from the open market through a transparent system, he added.

"The central government would provide fixed subsidy of Rs 18.50 per kg, limited to the

quantity based on their existing allocations," the Minister said.

In another query on sugar exports, Thomas said exports are free subject to prior registration

of quantity with Directorate General of Foreign Trade (DGFT).

On the question, whether an uncertainty has been created in the sugar market including

exports due to lack of a clear policy regarding shipments, the minister said Centre has not

received any complaint regarding the extant of sugar export policy in the recent past.

68

"However, as regards functioning of the sugar exporters, the government has received some

complaints about handling of export of European Union under preferential quota, which is

under examination," Thomas added.

Sugarcane fair price for FY15 might be raised marginally (BS 29.8.13)

CACP warns any further SAP increase in UP will spell disaster for mills

For the 2014-15 crop marketing season, the Commission for Agricultural Costs and Prices

(CACP) has recommended the fair and remunerative price (FRP) of sugarcane be raised 4.76

per cent to Rs 220 a quintal.

The move comes at a time when the mounting arrears of sugar companies are threatening to

derail payments to farmers.

While the Centre decides the benchmark FRP, state

governments are free to fix their own state advised price (SAP),

followed by companies while making payments to farmers.

In the 2012-13 sugar marketing season, sugarcane FRP was

raised 17.24 per cent; in the following season, it was increased

23.5 per cent. Officials said after such steep rises, it was natural

for CACP to go for a marginal rise.

In Uttar Pradesh, India’s second-largest sugar producing-state

and home to some of the biggest sugar companies, the SAP for

the 2013-14 season has been fixed at Rs 280 a quintal, 34 per

cent more than the FRP. The high price for sugarcane paid by

millers, coupled with the small rise in retail sugar prices and the

sluggish international markets, has put immense pressure on

companies.

Officials said the marginal increase in FRP suggested by CACP for 2014-15 in also in line

with the hefty increases suggested by it in previous two sugar seasons.

Between 2011-12 to 2012-13 sugar marketing season, FRP of sugarcane was raised by

17.24%, while it was hiked by 23.5% in the next crop season. Officials said after such steep

hikes in sugarcane FRP, it was natural for a pause.

The commission, officials said, had cautioned against any further increase in the SAP in Uttar

Pradesh. In its report submitted to the agriculture department a few days ago, CACP said

ideally, the SAP of sugarcane in the state should be about Rs 240 a quintal, as retail prices

were hovering at about Rs 320 a quintal.

69

But already the SAP has been fixed at Rs 280 per quintal for 2013-14 season, hence any

further increase in sugarcane SAP in UP will spell disaster for its sugar industry as there is

little chance of any significant rise in domestic sugar prices.

“Sugar-ending stocks in 2013-14 are expected at about nine million tonnes, much more than

the required quantity. Therefore, there will be little pressure on domestic supplies; also, the

international markets aren’t looking good, in such a situation any unusual increase in

sugarcane SAP by state government keeping in mind, the impending elections will spell

disaster for the industry,” the Commission has warned.

It said mills are already making a loss of around Rs 4 for every kilogram of sugar sold and

any further increase in sugarcane SAP will inflate their production cost.

To tide over this, officials said the Commission has suggested that it is high-time state

governments should adopt a revenue-sharing formula for sugarcane pricing, something which

has also been recommended by a high-powered panel on sugar sector constituted under the

chairmanship of head of Prime Minister’s Economic Advisory Council, C Rangarajan.

UP sugar mills lose markets to Maharashtra & Karnataka (BS: 3.9.13)

Cost of production a major factor, ISMA bags for UP govt help for mills' survival

Crushing units in Uttar Pradesh (UP) are fast losing markets to mills inMaharashtra and

Karnataka. Delhi, the largest consumption centre for UP sugar mills, is partly being

controlled by Maharashtra mills.

Abinash Verma, director general of the Indian Sugar Mills Association (Isma), feels owing to

low production costs, sugar mills in Maharashtra are able to transport the commodity across

1,450 km and compete with UP sugar mills.

About half the raw material consumed by mills in Maharashtra and Karnataka is linked with

the realisation of mills. According to the existing system, farmers in Maharashtra and

Karnataka get the first instalment for their cane in the beginning of the season, and the second

when the standing crop is harvested. Sugar mills release the first instalment smoothly, but

they assess crop output and potential of a recovery before releasing the second instalment.

This keeps mills in an advantageous position for cane payments. Cane payments for farmers

in Maharashtra and Karnataka are linked with the fair andremunerative price (FRP)

announced by the Centre. It is also linked to sugar recovery.

In contrast, UP sugar mills have to pay cane farmers according to the state advised price

(SAP) announced by the state government, which is substantially higher than the FRP. Last

year, the UP government announced SAP at Rs 280 a quintal, against the Rs 210-a-quintal

FRP determined by the Centre. The SAP rate is independent of the recovery of sugar.

Against an average 11.5 per cent of recovery for sugar mills in Maharashtra and Karnataka,

UP sugar mills have recorded a recovery of 9.5 per cent. Therefore, beyond the high cost of

the raw material, recovery is substantially higher for mills in Maharashtra and Karnataka.

Consequently, the average cost of sugar production works out to Rs 3,600 a quintal for UP

mills, against Rs 3,000-3,100 a quintal for mills in Maharashtra and Karnataka.

70

“Even with Rs 100-150 a quintal of transportation cost, Maharashtra and Karnataka mills not

only compete, but also manage to sell at Rs 3,400 a quintal in the Delhi market,” said Verma.

“Certainly, we are losing market share rapidly to mills in Maharashtra and Karnataka due to

their lower cost of production. The only way forward for survival is to link cane prices with

sugar realisation,” said Vivek Saraogi, managing director of Balrampur Chini.

UP sugar mills have lost about Rs 3,500 crore this crushing season, the third year of

continuous loss.

“A two per cent decline in recovery makes a huge difference in realisation,” said Sanjay

Tapriya, chief financial official of Simbhaoli Sugars Ltd.

“We have urged the (UP) government to share the interest on working capital raised through

banks at an estimated Rs 2,500 crore annually. At 12 per cent interest, the annual burden on

the government would be about Rs 300 crore, lower than the Rs 400-crore annual state

budgetary allocation for cooperative sugar mills. Through this, both private and cooperative

sugar mills would benefit. Otherwise, survival for UP sugar mills would be difficult,” said

Verma.

Maharashtra firms up drip irrigation plan for cane cultivation (BS: 4.9.13)

All factories will have to shift to drip irrigation from use of irrigated water In a bid to tackle

sugarcane producers’ heavy reliance on monsoon and irrigated water, the Maharashtra

government has firmed up a Rs 1,200-crore three-year drip irrigation plan.

Drip irrigation is an irrigation method that saves water by allowing water to drip slowly to the

roots of plants.

Sugarcane cultivation in the state is spread over 1 million hectare (ha) of the total 17.3

million ha under crop cultivation, but sugarcane consumes almost 70 per cent of water. There

are 202 cooperative sugar factories and 68 private mills in the state.

‘’All sugar factories in the state will have to adopt drip irrigation in the next three years.

Funding for the same will be possible from the state and the Central governments,’’ Chief

Minister Prithviraj Chavantold Business Standard. He said drip irrigation would not only curb

the use of irrigated water, but also promote the judicious use of water for cane cultivation.

Chavan on Tuesday discussed at length the drip irrigation plan with the representatives of

sugar factories.

An office-bearer of the Federation of Cooperative Sugar Factories in Maharashtra, a

representative body of over 170 units, said factories were quite keen to shift to drip irrigation.

‘’We explain our stand with regard to getting government subsidy for the same in three years.

We are quite hopeful the project will be a success as it will be another reform after the recent

partial decontrol of the sugar sector,’’ he added.

71

According to a government official, sugar factories consume about 1.5-3 lakh litre water per

day during the crushing season. According to recent estimates, water requirement from

sugarcane plantation to sugar production is 3,500 litre per kg. More importantly, nearly 17

per cent of water from the command area of irrigation project is consumed by sugarcane

cultivation alone, compared with two per cent by oil seeds and 4.5 per cent by pulses.

“Therefore, the government’s proposal for drip irrigation is quite crucial as the irrigated water

can be available for other crops,’’ the official noted.

Meanwhile, the government has revised the sugar output estimates for the crushing

season 2013-14. Nearly 63 mt of cane will be available to produce 7.2 mt of sugar by the end

of the ensuing crushing season. This was possible due to the satisfactory monsoon,

especially in the sugarcane growing areas of the state. Besides, there will be a carry-forward

sugar stock of 2.3 mt.

Sugar slowdown (BS: 4.9.13)

Deregulation was incomplete, and the industry suffers for it

The woes of the sugar sector seem unending. The gains it had anticipated from the abolition

of the mandatory levy on sugar output and a few other reformist measures announced last

April have not materialised. Meanwhile, costs have risen, eating into profits. Costs have been

pushed upwards by steep annual hikes in sugarcane prices; moreover, three straight high-

output years have led to a drop in sugar prices. What is worse, the global prices of sugar, too,

have moved downwards. This has eroded the prospects of sugar exports as an outlet for

bulging sugar inventories, even though the rupee has lost value.

The worst affected is the sugar industry in those northern states where the system of state-

advised sugarcane prices is in vogue. The state-advised price is fixed arbitrarily, usually on

populist considerations, disregarding the fair and remunerative prices announced by the

Centre on the advice of the Commission for Agricultural Costs and Prices. A striking case in

point is the sugar sector in Uttar Pradesh, the country's second-largest producer of sugar.

Successive state governments have raised the state-advised price year after year without

regard to market dynamics. As a result, the state-advised price soared from Rs 165 a quintal

in 2009-10 to Rs 280 in 2012-13 (against the fair and remunerative price of Rs 171), even as

sugar prices climbed, on an average, only from Rs 2,800 a quintal to Rs 3,100 during this

period. This has caused a liquidity crunch in the industry, leading to the building up of cane

price arrears to the tune of Rs 2,600 crore. The sugar mills claim it's not easy to clear these

arrears, despite legal and political pressure. Even banks have turned wary of lending to the

sugar industry in view of its ill health.

The solution to the sugar sector's distress is indeed not hard to trace. It lies in the report of the

high-powered committee headed by the chairman of the Prime Minister's Economic Advisory

Council, C Rangarajan. Besides outlining a set of reforms that would ultimately free the

sector from needless controls and regulations, the panel suggested a revenue-sharing formula

between millers and cane growers as an alternative to the state-advised price. This requires

the mills to pay the fair and remunerative price to cane growers at the time of cane delivery

and later share with them 70 per cent of the value of the sugar and its by-products. Such a

system, which allows mills' profits to be shared with cane farmers, would obviate any need

72

for the states to set a state-advised price. Some of the states, notably Karnataka and

Maharashtra, either have already switched to the revenue-sharing mechanism or are moving

in that direction. However, the Union government is, for unexplained reasons, yet to accept

and implement this and many other key recommendations of this panel. A final call on these

issues needs to be taken expeditiously for the benefit of the sugar sector, including the

industry and farmers.

Maharashtra curbs sale of sick co-operative sugar units (BS: 5.9.13)

Cooperatives minister Harshvardhan Patil says since 2006 about 26 cooperative sugar

factories under liquidation have taken over by private parties

The Maharashtra government on Wednesday took a decision not to sell cooperative sugar

factories under liquidation to the private sector. Instead, the sale of such factories would be

permissible to financially strong cooperative sugar units in the state. The decision was taken

at a meeting held by Chief Minister Prithviraj Chavan.

The government’s move comes on the heels of hard-hitting observations made by the

National Bank for Agriculture and Rural Development in its annual reports in the past three

years, on the manner in which the sale of loss-making and closed cooperative mills was done.

Besides, several farmers’ organisations have been stepping up their criticism against the sale

of cooperative units to private parties.

Co-operatives Minister Harshvardhan Patil said since 2006, as many as 26 cooperative sugar

factories under liquidation had been taken over by private parties.

Maharashtra CM Prithviraj Chavan appeals sugar mills to adopt drip irrigation (ET:

7.9.13)

Maharashtra chief minister Prithviraj Chavan has appealed to the sugar mills in the state to

bring all the sugar cane cultivation in the state under drip irrigation in next three years.

"Adoption of drip irrigation will not only help conserve water but will also help to increase

the yield of sugarcane by about 20 tonne/hectare," said Prithviraj Chavan, chief minister,

Maharashtra.

Even thought the state is the top sugar producer in the country, frequent droughts in the state

affect area under the sweetener adversely. The sugar industry has been demanding increase in

subsidy for the drip irrigation sets for sugar cane crop.

In a meeting of group of ministers, the chief minister promised to request to the central

government for increasing the subsidy for drip irrigation systems. He also promised to see if

concession in purchase tax can be given to those mills, who try to promote drip irrigation in

their jurisdiction.

73

Sugar Outlook: Fresh buying to push up prices (BS: 8.9.13)

However, pricing, cane reservation area and minimum distance between two mills were left

to the state governments

Things started to move for the sugar industry when government notified its decision to

abolish levy (one-tenth produce at subsidised rate) and non-levy (regulated release

mechanism) quota on May 2. Under the existing arrangement, state governments were

allowed to sell sugar through the public distribution system at Rs 13.5 a kg considering the

open market purchase price at Rs 32 a kg and the difference to be granted as subsidy by

central government.

However, pricing, cane reservation area and minimum distance between two mills were left

to the state governments. After implementation of this measure, everyone in this cash

'starved' sugar industry felt relief but this proved too short-lived. It would be interesting to

analyse why the industry is not able to utilise the benefits of the sweetener offered by the

government or how thesugar prices are headed in the upcoming new marketing season.

In the post-control period, prices of the sweetener have remained range-bound with a bearish

bias both domestically and globally because of abundant supplies. In the interim, prices have

broadly moved in the range of Rs 29.50-30.50 a kg with limited upside, the reasons being

panic selling by debt-ridden sugar millers to make payments of huge cane arrears amounting

to Rs 11,000 crore and cheaper imports from Pakistan. India has imported 0.6 million tonnes

compared to 1.5 million tonnes of exports done in this sugar year so far (for sugar industry,

year ending is September).

Substantially high production in Brazil brought down the international prices to two-year

low. To make it worse, UP government gave millers a deadline to clear the payment or else

recovery certificates would be issued (right to recover cane dues by auctioning their stocks).

However, prices got some support after government hiked the import duty to 15 per cent from

10 per cent and the rupee started falling sharply (28 per cent since April).

India is the second largest producer of sugar in the world after Brazil but it is also the largest

consumer. It contributes 15-17 per cent of the total global production. According to Indian

Sugar Mills Association data, sugar production is expected at 25 million tonnes in 2012-13

compared with a local demand of around 23 million tonnes and for 2013-14, the production is

expected at 23.7 million tonnes amid last year's delayed monsoon. With a 10 per cent above

average monsoon from June 1 to August 31 expect better cane acreage in this Kharif season.

However, continued incessant rains since last 20 days have brought the fears of some crop

damage while the figures will be clear only by the end of sowing season.

Sugar prices are expected to remain range-bound with limited downside movement till

September, as fresh crushing is due in next one month and before that millers will want to get

rid of old stocks from their storages. After September prices are expected to rise amid coming

festive season. Based on seasonality pattern, we witness that normally price tends to increase

from June onwards (mills wind up their crushing operation) with peak consumption demand

during the period of September to November.

74

Bulk purchasers like confectionary, sweet makers are to enter the market during that period.

To conserve foreign exchange in the oil sector, government is pushing the oil marketing

companies to execute the five per cent mandatory ethanol blending program that will provide

further positive sentiments to the sugar industry amid diversion of sugar affecting the

demand-supply dynamics. Besides, with depreciated rupee our export parity is likely to be

feasible compared to other competitors. The bottom line is that we are hopeful that entries of

fresh buyers in between Rs 29 to Rs 29.50 levels are expected to push prices up to our targets

of Rs 32 to Rs 33 a kg in the remaining part of the year.

Sugar output to peak, set to worsen glut (BS: 11.9.13)

Futures are headed for a third-year of losses, the longest slump since 1992, as the world

heads for a fourth year of surplus in 2013-14

Sugar production in India, the world's second-biggest grower, may be more than estimated as

the highest monsoon rainfall in 19 years boosts yields hurt by a drought a year earlier, a

growers' group said.

The harvest will total 24.5 million tonnes in the 12 months starting Oct. 1, compared with 23

million tons predicted in March, Vinay Kumar, managing director of National Federation

Cooperative Sugar Factories Ltd., said in a phone interview. That compares with a crop of 25

million tons this year and more than the 23.5 million needed to meet domestic demand, he

said. Output may total 23.7 million tons in 2013-2014, the Indian Sugar Mills Association

estimates.

Futures are headed for a third-year of losses, the longest slump since 1992, as the world heads

for a fourth year of surplus in 2013-2014. Worldwide supplies will outpace demand by 4.5

million tons in the season that starts in October, following a 10.3 million-ton surplus this

season, the International Sugar Organization said Aug. 22.

A bigger than estimated crop and five-year high stockpiles may increase exports from India.

"Good rainfall in drought-affected Maharashtra and Karnataka this year has improved

prospects for a better production," Kumar said today. "The country may make more raw

sugar if there is demand for exports next year."

Monsoon rainfall is 6 per cent above a 50-year average since June 1, according to India

Meteorological Department. The precipitation in the three months ended August 31 was the

highest since 1994, data from the agency showed. Parts of Maharashtra and Karnataka, which

together account for 45 percent of the country's sugar output, faced drought because of

below-average monsoon rains in the past two years. Shipments from India may exceed 1

million tons in the year beginning Oct. 1 as a surplus and a weakening rupee spur demand

among importers, according to Narendra Murkumbi, managing director of Mumbai-based

Shree Renuka Sugars Ltd., the nation's biggest refiner. Exports from the local crop may total

300,000 tons this season, Kumar estimates.

The rupee is the worst performer among 24 major emerging economies in the past six months

on concern that foreign capital outflows will accelerate as the US Federal Reserve prepares to

75

trim stimulus. The currency weakened 14 per cent against the dollar this year, reaching a

record low of 68.845 on August 28.

Raw sugar for delivery in October was little changed at 17.19 cents a pound on ICE Futures

US at 12:13 pm in Mumbai today, while white sugar for December delivery climbed 1.1

percent to $490.90 a tonne on NYSE Liffe in London yesterday.

Sugar inventories in India may expand 11 percent to about 10 million tonnes on October 1,

2014, compared with an estimated 9 million tonnes at the start of 2013-2014 season, Kumar

said. Farmers planted 4.87 million hectares (12 million acres) to sugar cane as of September

6, compared with 5 million hectares a year earlier, according to the Agriculture Ministry.

Output may total 24 million tonnes due to good rains, said Prerana Desai, vice president for

research at Kotak Commodity Services Ltd.

"The yield and recovery would be better because of the good monsoon," Desai said by phone

from Mumbai. "This is what has resulted in overall improvement in the production prospects.

Earlier it was expected that because of drought in Maharashtra and Karnataka last year, we

will have dramatically lower production. But that is not happening, because of improvement

in weather."

KV Thomas asks sugar mills to look at exports to clear cane dues (ET: 12.9.13)

Sugar mills should focus on exports to clear payment of dues to cane farmers as the country's

output of the sweetener is likely to exceed domestic demand for the fourth consecutive

marketing year, Food Minister K V Thomas said today.

Exports will help mills to clear sugarcane arrears to farmers and also lead to foreign exchange

earnings, he said, while acknowledging the industry for ensuring steady supply of sugar at

almost stable prices after decontrol.

"It is indeed a matter of pride that we are looking at a comfortable sugar position for the

fourth year in a row," Thomas said at the AGM of the National Federation of Co-operative

Sugar Factories (NFCSF).

India's sugar production is estimated at 25 million tonnes in the 2012-13 marketing year

(October-September) as against domestic consumption of 22-23 million tonnes. Industry has

pegged 2013-14 output at 23.7 million tonnes and the figure may be revised upwards on

better monsoon.

"Currently, exports of sugar are under the open general license, subject to registration with

DGFT (under the Commerce Ministry). With the present exchange rate, I am sure that some

players in the industry would look at the option of export, which will also help us to earn

some precious foreign exchange," he observed.

As of July 31, sugar mills owed cane farmers about Rs 3,000 crore, mostly by mills in Uttar

Pradesh, which have incurred a loss of about Rs 3,000 crore in the 2012-13 marketing year

due to higher cost of production.

76

On the industry's demand to raise import duty from the existing 15 per cent, Thomas said

imports are not viable at the current exchange rate.

Thomas asked the mills to help meet the requirements of ration shops in states, especially

those that do not produce sugar, by offering them attractive prices and logistics support.

The minister said the Centre has already asked sugarcane producing states to consider the

recommendations of the Rangarajan Committee related to cane area reservation and a

revenue sharing formula between farmers and mills.

"The government of Karnataka, I believe, has already taken positive steps in this direction. I

would request the industry to follow up with the state governments concerned for promoting

rational policies, which will make the industry competitive while sharing the gains with

sugarcane farmers," Thomas said.

Sugar stocks gain as food minister asks mills to focus on exports (BS: 13.9.13)

Shares of most of the sugar companies are trading higher in trades today in otherwise

choppy markets after the food minister K V Thomas asked sugar mills to focus on exports.

Food Minister K V Thomas said, sugar mills should focus on exports to clear payment of

dues to cane farmers as the country's output of the sweetener is likely to exceed domestic

demand for the fourth consecutive marketing year.

"It is indeed a matter of pride that we are looking at a comfortable sugar position for the

fourth year in a row," Thomas said at the AGM of the National Federation of Co-operative

Sugar Factories (NFCSF).

India's sugar production is estimated at 25 million tonnes in the 2012-13 marketing year

(October-September) as against domestic consumption of 22-23 million tonnes. Industry has

pegged 2013-14 output at 23.7 million tonnes and the figure may be revised upwards on

better monsoon.

Stocks such as DCM Shriram Inds, Shree Renuka Sugar, Eastern Sugar, Riga Sugar,

Balrampur Chini, Dharani Sugars, Sakthi Sugars, Dhampur Sugar and rana Sugars have

rallied 3-11% each in trades so far.

Sugar output revised up by 5.5 pc to 25 mn tonne in 2013-14 (BS: 16.9.13)

Country's sugar production is seen higher than the demand for the fourth marketing year in a

row

India's sugar production for the 2013-14 marketing year has been revised upwards by 5.5% to

25 million tonnes than previous estimate, on higher cane acreage and good monsoon, industry

body ISMA said today.

Sugar output of India, the world's biggest consumer and second largest producer after Brazil,

stood at 25 million tonnes in the current 2012-13 marketing year ending this month.

77

In July, Indian Sugar Mills Association (ISMA) had pegged production of the 2013-14

marketing year (October-September) at 23.7 million tonnes, but now it has revised upwards

to 25 million tonnes.

The country's sugar production is seen higher than the demand for the fourth marketing year

in a row. The annual domestic demand is around 22-23 million tonnes.

"As per satellite images, availability of total sugarcane acreage for crushing in India in sugar

season 2013-14, will be around 52.89 lakh hectare which is almost 9% higher than the initial

estimates of Ministry of Agriculture of 48.53 lakh hectare," Indian Sugar Mills Association

said in a statement.

"With this kind of sugarcane acreage and an unprecedented high rainfall in the last few

months, sugar production in the sugar season 2013-14 is expected to be about 25 million

tonnes of sugar," it added.

ISMA has projected about 7.8 million tonnes of sugar production in Maharashtra, which is

almost similar to last year when the sugar production was around 8 million tonnes.

Uttar Pradesh is likely to produce 7.7 million tonnes of sugar production in the ensuing 2013-

14 season.

"Karnataka's sugar production is expected to remain at almost the same levels of last year i.E.

Around 3.4 million tonnes, while major fall is only expected from Tamil Nadu which may

give 15% lower production of 1.64 million tonnes, as compared to last years production of

about 1.9 million tonnes of sugar," ISMA said.

Sugarcane production in Guj likely to fall on excess rainfall (BS: 16.9.13)

Farmers and cooperative leaders peg sugarcane output at around 10 million tonnes this year

compared to 11.5 million tonne last year

Excess rainfall, mainly in sugarcane growing region of South Gujarat, seems to have

hampered the prospects of cane crop in the state. Farmers and sugar millers have expressed

concern over a possible fall in the sugarcane production this year.

As per the preliminary estimates, Gujarat's cane production is likely to hover around 10

million tonnes, while last year the production was recorded at 11-11.5 million tonnes, sources

in the state sugar cooperative sector informed.

Moreover, area under sugarcane sowing has remained a tad lower against the last year, while

the excess rainfall in growing regions has adversely affected crop prospects this year.

Sugarcane harvest starts from October.

"There could be a drop in the cane production to the tune of around 8-10 per cent from last

year's 11.5 million tonnes. Cane does require water, but this year we have seen excess water

than required, which is not good for the crop," said Mansinh Patel, chairman, Gujarat State

Federation of Cooperative Sugar Factories Ltd.

78

As per the meteorological department data, Gujarat region has witnessed excess rains of 5 per

cent during June to September period. Against the normal rainfall of 834 mm the state

received rainfall of 874 mm, showing a +5 per cent departure from normal.

However, state government officials decline any adverse impact of excess rainfall on cane

production. "We do not think there will be a drop in cane production. On the contrary, we

believe that sugar recovery from cane will improve further from last year's 10.29 per cent,"

said an official of sugar directorate, government of Gujarat.

Farmers, however, claim that area under cane cultivation has also fallen over the past three

years from 1,92,000 hectares of three-year average to around 1,85,000 hectares in 2012-13.

"Many farmers have shifted to alternate cash crops mainly because of the excess supply of

cane. Some of them had to burn their crop in the past as they were unable to sell it at a

remunerative price," said a head of one of the sugar cooperative mills in south Gujarat.

The procurement price has been fixed at Rs 2,800 per tonne of cane but most of the

cooperative sugar mills pay much more than that. This year also the procurement prices are

likely to remain high as it is believed to keep farmers interested in sugarcane cultivation.

Food Min to consider demand to remove sugar export limits (BS: 16.9.13)

Limit on exports, penalty imposed when there was a premium on sugar, says Isma director

The Food Ministry will consider the sugar industry's demand to scrap export restrictions in

anticipation of surplus production next year, a top government official said.

"I will take up the issue with the Commerce Ministry," Food Secretary Sudhir Kumar said at

the Kingsman-Platts global sugar conference here, adding that the matter will be considered

once the industry submits a formal representation.

The Indian Sugar Mills Association (Isma) wants export norms to be eased in view of the

surplus production expected next year and huge carry-over stock. At present, sugar exports

up to 25,000 tonnes can be registered with the Directorate General of Foreign Trade (DGFT).

A penalty of 1% is imposed on millers if the shipments aren't made in the required time.

The limit on exports and the penalty system were imposed when there was a premium on

sugar, Isma Director General Abinash Verma explained.

At present, sugar prices are lower in the global market and there is a need to ease these

norms. "We will be mainly exporting raw sugar next year, which could be done in large

quantities of 55,000 tonnes and more," Verma said, while demanding relaxation of the export

norms.

Noting that mills, especially in Uttar Pradesh, have incurred a loss of about Rs 3,000 crore in

the 2012-13, Verma said boosting exports will help to clear arrears to cane farmers. Recently,

79

Food Minister K V Thomas had suggested that sugar mills should focus on exports to clear

the arrears.

Addressing the conference, the Food Secretary said the Centre had partially decontrolled the

sugar industry in May and now it is for the state governments to remove controls on

sugarcane pricing and cane reservation areas.

"So far, decontrol is partial. Even now, sugarcane prices are controlled and there is cane

reservation. We do hope these restrictions are removed in the future," Kumar said. He said

Karnataka has enacted a law to set sugarcane prices based on the output of sugar and its by-

products. "More states are likely to follow suit."

Sugar output may touch 25 million tonne in 2013-14 (ET: 17.9.13)

Sugar production in India is estimated to touch 25 million tonne in the sugar season 2013-14

starting from October, slightly higher than the current year's 24.5 million tonne, the Indian

Sugar Mills Association (ISMA) has estimated.

Good monsoon this year would help augment the sugar production for the coming season,

ISMA said. The country's biggest sugar producer Maharashtra's sugar production is likely to

be 7.8 million tonne. Sugar recovery for the state would also go up by 11.44%. In Uttar

Pradesh, which is the second-largest sugar producer, the sweetener production may touch 7.7

million tonne, the estimate said.

"The ISMA is expecting slightly lower yields from UP than last year's on account of lesser

'millable' sugarcane per hectare availability due to excess rains, which affected the late-sown

sugarcane plants this year," said a statement by the industrial body. Karnataka's sugar

production is expected to remain at almost the same levels of last year - around 3.4 mt.

Export of 2.5 MT expects to improve the domestic sugar market (BS: 21.9.13)

Pawar asks coop sugar industry to become professional, competitive.

Union agriculture minister Sharad Pawar on Saturday asked cooperative sugar industry in

Maharashtra to become competitive, professional and innovative in their operations in a bid

to survive especially against the rising competition from private sector. Besides, Pawar called

upon cooperative units to adhere to austerity measures and focus on increasing the per hectare

productivity and production and thereby reduce their reliance on state and central

governments. He warned that if they continue to spend recklessly and did not become

financially prudent the banks will stop to provide loans which will further become their

operations unviable.

Pawar was speaking at the 57th annual general meeting of the Federation of Cooperative

Sugar Factories in Maharashtra which is a representative body of over 170 cooperative units

in the state. Pawar also warned that unless and until they improve their performance he would

stop visiting the Federation. He also indicated that the cooperative sugar sector should stop

seeking his help in future if they fail to bring in professionalism in their functioning.

80

“Some of the district central cooperative banks have been collapsed due to their heavy

exposure to the cooperative sugar sector. This is not a good sign as the state government,

which has provided guarantee to a couple of units, will not allow this situation to prevail in

future especially when banks also lend to other crops and sectors,” Pawar said.

Pawar said that there should minimum export of 2.5 million ton during the current season as

it will help the industry to improve the domestic sugar market. His suggestion comes at a

time when India's carry forward stock will be 9 million ton and the production during 2013-

14 season is expected to be 25 million ton. His logic was that instead of keeping a stock of

sugar expecting surge in the price it is better to dispose it of to improve the liquidity.

Pawar’s snub to the state cooperative sugar industry comes at a time when most of the units

are reeling under heavy financial burden. Maharashtra’s sugar industry contributes 30% to

the national output and nearly Rs 4,500 crore towards various taxes to the state and central

governments.

He said the partial decontrol of the sugar industry in the long term will definitely help the

farmers and industry as a whole.

Earlier, Vijaysinh Mohite-Patil, chairman of the Federation of Cooperative Sugar Factories in

Maharashtra appealed to Pawar that the Centre should impose 30% import duty instead of the

present 15%. Besides, a transport subsidy be provided from the central and state

governments to the industry especially when the sugar prices are falling day by day.

CACP for marginal hike in cane FRP to Rs 220 per quintal for 2014-15 (ET: 23.9.13)

The Commission for Agricultural Costs and Prices (CACP) has recommended a marginal

increase in the fair and remunerative price (FRP) for sugarcane to Rs 220 per quintal for the

2014-15 sugar year (October-September).

The CACP is a statutory body and advises the government on the pricing policy for major

farm produce.

"We have recommended a marginal increase in the FRP for cane to Rs 220 per quintal for

2014-15 after carefully examining the cost of production, surplus availability and

international prices among other factors," a senior CACP official told PTI.

While the FRP for sugarcane for the 2013-14 sugar year, beginning next month, has been

fixed at Rs 210 per quintal, the CACP's recommendation on raising this price would be

applicable from October 2014.

The FRP is the minimum price that sugarcane farmers are legally guaranteed. However, state

governments are free to fix their own state advised price (SAP) and millers can offer any

price above the FRP.

While recommending the FRP, the CACP has warned that any increase in the SAP would

escalate the production cost and suggested it is high-time that state governments adopt

revenue-sharing formula for sugarcane pricing.

81

The FRP is fixed after taking into consideration the margins for sugarcane farmers, based on

the cost of production of sugarcane, including the cost of transportation.

The FRP is linked to a basic sugar recovery rate of 9.5 per cent, subject to a premium of Rs

1.46 for every 0.1 percentage point increase in recovery above 9.5 per cent. The recovery rate

is the quantity of sugar that is produced from the crushed cane.

Usually, the government accepts the cane price recommended by the CACP.

82

83

INPUTS

India seeks New Zealand's help for setting up cold storages (ET 4.9.13)

India has sought expertise from New Zealand in development of cold storages in the country,

where fruits and vegetables worth thousands of crore go waste every year due to inadequate

storage infrastructure.

This was one of the important issues discussed by Indian officials with their New Zealand

counterpart during their meeting in Wellington on 29th and 30th July.

"India has 37 million tonne opportunity for developing cold storage. We have asked New

Zealand's expertise in this matter," a senior official in the commerce ministry said.

The official said since New Zealand is a major producer of fruits and dairy products, it has

expertise and modern technology in setting up of cold storages.

Agriculture and Food Processing Industries Minister Sharad Pawar has recently said that the

value of annual wastage of fruits and vegetables was estimated at Rs 13,309 crore.

However, if the wastage value of rice, wheat, cereals and others are taken into account, it

would go up to Rs 44,000 crore a year.

As per estimates, there is requirement of about 60 million tonnes of cold storage in the

country against the present capacity of around 29 million tonnes.

The government also provides financial assistance for construction of cold chain

infrastructure.

Further, India has also suggested New Zealand to invest in the dairy sector.

"New Zealand dairy sector can invest in India to produce dairy items that India does not

produce," the official added.

Besides, the country has sought greater market access to export items like gems and

jewellery, pharmaceutical, engineering goods, leather products and sports goods in order to

increase bilateral trade between the countries.

Both the countries are also negotiating a Comprehensive Economic Cooperation Agreement

since 2010. The broad-based free trade agreement proposes to cover goods, services and

investment.

The bilateral trade between the two countries stood at meagre USD 998.68 million in 2012-

13. It was USD 1.07 billion in the previous fiscal.

84

The FTA is important for India as it hopes to get more work visas for its professionals

especially teachers, healthcare providers, technicians, IT experts, architects and hospitality

providers in New Zealand.

New Zealand wants access to Indian markets for its agri products like apple, kiwi, dairy and

also wine.

Fertilizer subsidy for FY14 to be in range of Rs 65k-70k cr: ICRA (BS: 24.9.13)

Agency added that delayed subsidy payments will lead to stretched cash flows

The total fertiliser subsidy budget for the fiscal 2013-14 is anticpated to be in the range of Rs

65,000-70,000 crore excluding carryover subsidy of last years, a ratings agency said in a

report today.

The government has fixed the subsidy budget for the year 2013-14 around Rs 66,000 crore,

with this given budget and carryover subsidy of Rs 36,000 the delay in subsidy payments are

likely to continue, according to ICRA ratings report on fertiliser sector.

The agency added that delayed subsidy payments would lead to stretched cash flows and

adverse impact on net profitability due to high interest costs, despite better demand scenario

on the back of the good monsoon.

The subsidy for phosphatic and potassic (P&K) fertilisers such as di-ammonium phosphate

(DAP) is expected to remain in the range of Rs 29,000-30,000 crore, the report added.

Despite decline the international urea prices, the subsidy on urea is estimated to stay at Rs

36,000-40,000 crore, as rupee depreciation has neutralised the effect of fall in international

prices.

Meanwhile, depreciation of the rupee has lead to increase in gas cost, which is the major cost

of urea production and, in turn, will increase the subsidy bill, the report added.

ICRA said any meaningful reform in urea pricing is likely only after the general elections in

2014.

Healthy monsoon in the current year is likely to lead to favourable demand outlook for

fertiliser sector in the current year, with kharif and rabi off-take likely to improve

significantly compared to last year, the report added.

However, it also mentioned that since most of the sales is through channel inventory getting

cleared, any positive impact on the profitability may not be immediately felt.

Manufacturing pesticide for export, export norms to be relaxed (BS: 24.9.13)

Liberalization aimed at making India hub for manufacturing pesticides especially those

through buying technology from foreign companies

85

The norms for pesticides exports and manufacturing of pesticides through foreign technology

from India may be liberalized.

According to official sources, the liberalization is aimed at making India hub for

manufacturing pesticides especially those through buying the technology from foreign

companies. After manufacturing of those high end pesticides, these pesticides will be directly

exported out of India. These pesticides will not be marketed at all into the domestic India

market.

Thus as per the proposal of liberalization, these products will not be put through stringent

inspection norms as regards t to the quality and procedures. However factories engaged in

such technology transfer from overseas and manufacturing in India will have to comply with

the safety, environmental norms and labour standards.

A discussion has already taken place between the ministries of agriculture and chemicals and

fertilizer with the ministry of commerce. A similar endeavor has also been taken for export of

imported processed foods.

While the exporters of such product will import the processed food, they will only export it

and not market it in the domestic market. Thus these products will not be subjected to

stringent inspection of food standards in India.

India is one of the largest producers of pesticides in Asia. In value terms the size of the Indian

pesticide industry alone was $3.8 billion in the year 2011 that produces even those pesticides

which are banned in the developed countries.

Key destination markets for Indian exports of agrochemicals are USA, U.K., France,

Netherlands, Belgium, Spain, South Africa, Bangladesh, Malaysia and Singapore. India is

one of the most dynamic generic pesticide manufacturers in the world with more than 60

technical grade pesticides being manufactured indigenously by 125 producers consisting of

large and medium scale enterprises (including about 10 multinational companies) and more

than 500 pesticide formulators spread over the country.

However, the industry seems to financially constrained, said official sources mainly due to

rising costs of inputs, governmental duties and taxes, and the cost of capital. There are also

high rates of excise duty both on intermediates and finished products, and excise and sales

taxes account for nearly 20% of the cost of pesticides.

The pesticide industry is a part of the chemical industry. Reportedly, the global turnover of

the chemical industry is more than three trillion US dollars.

The Indian Chemical Industry ranks 12 by volume in the world production of chemicals.

With the current size of approximately $108 billion, the Indian chemical industry accounts

for about 3% of the global chemical industry.

By 2017, according to the Planning Commission of India, it could reach the size of $224

billion or $290 billion (about 6% of global industry). Indian chemical industry accounts for

approximately 7% of Indian GDP and the share of industry in national exports is around 11%.

86

In terms of volume, India is the third-largest producer of chemicals in Asia, after China and

Japan.

87

OTHER AGRI / FARM NEWS

Asian Development Bank to provide $18.4 million for post harvest facility in Gujarat

(ET : 26.8.13)

In its first ever loan to private agribusiness in India, Asian Development Bank (ADB) will

provide $18.4 million to Champion Agro to set up cold storage facilities for fruits and

vegetables focusing on Gujarat.

"Up to 6,000 farmers in Gujarat could attain higher revenues from their crops with the

construction of cold storage facilities for fruits and vegetables by Champion Agro using

$18.4 million in funding from Asian Development Bank," ADB said in a release.

The project will include five collection centres, a controlled-atmosphere cold storage facility,

and an individually quick frozen facility in Gujarat, as well as five distribution centres

located in large cities in different states of northern India.

"Rural poverty can be reduced through better post-harvest management, which not only helps

significantly raise farmers' income but also provides direct employment opportunities," said

Martin Lemoine, Senior Investment Specialist at ADB's Private Sector Operations

Department.

Though India is the second largest producer of fruits and vegetables in the world, about 35

per cent of its fresh produce gets wasted due to lack of post-harvest infrastructure.

The ADB project is expected to improve the processing and distribution of quality fruits and

vegetables sourced from local farmers as well as help them increase their yields through

irrigation facilities.

The loan funding will support distribution to food wholesalers and processors in India as well

as abroad, it said.

Champion Agro provides agribusiness services such as irrigation system, agricultural inputs

to retail malls and farming with about 17,000 hectares under lease and contract farming.

Good rain may push up FY14 farm GDP to 5-7% (BS: 26.8.13)

It was only in 2010-11 that agriculture growth touched 7.9% in recent years

As the southwest monsoon maintains its record-breaking performance over most parts of

India, agriculture economists and policy makers hope overall agriculture growth would top

five per cent in 2013-14, on the back of bumper harvests.

This, if realised, would come as a relief to the beleaguered economy, as the farm sector's

multiplier growth is much more than its direct impact on gross domestic product, despite its

shrinking share in the Indian economy.

88

"Not only in kharif; a big boom is also expected in the rabi sowing season, as reservoirs are

filled to the brim, which could be the big turnaround the economy is desperately looking for,"

Ashok Gulati, chairman of the Commission for Agriculture Costs and Prices, told Business

Standard.

He said considering that agriculture growth in 2012-13 was around 1.8 per cent, there would

be natural bounce of a similar amount and if we add the 11th Five-Year Plan average annual

agriculture GDP growth of 3.6 per cent to this, the total comes to over five per cent. This is

easily achievable as weather Gods have been super-normal, he said.

"I won't be surprised if overall agriculture growth in 2013-14 touches even seven per cent, as

not only the area under kharif crops is more than last year but the uniform distribution of

rainfall will also push up per-hectare yields," another economist said.

It was only in 2010-11 that agriculture growth touched 7.9 per cent in recent years. Barring

that, this would be the highest growth in recent years. A five-seven per cent agriculture

growth in 2013-14 would mean farming might exceed the 12th Five-Year Plan annual growth

target of four per cent, if the trend continues.

According to the India Meteorological Department (IMD), the southwest monsoon in 2013

had been almost 13 per cent over normal so far (till August 24 from June 1). IMD officials

said with just a month remaining for the rains to start retreating, there was every possibility of

total showers exceeding 100 per cent of the Long Period Average (LPA), which is 89

centimetres, in this monsoon season. Rains in the range of 96-104 per cent of LPA are

considered normal.

If this happens, it would be the first time in the four-five years when rains would be more

than 100 per cent of LPA. The rains have not only been heavy but have also been rather well-

distributed, barring parts of eastern and northeastern India.

Grain drain: Cheapest cereals in India are the most expensive ones in US (ET 27.8.13)

They are priced some 500 times more than what New Delhi will supply its poor under the

food security legislation.

What's cheap food for the poor in India is healthy and expensive nutrition for the rich in the

west. India's cheapest grains, ignored, disdained, and disappearing in much of the country,

are now much sought after cereals in America. They are priced some 500 times more than

what New Delhi will supply its poor under the food security legislation.

The UPA government's Food Security Bill promises the country's 810 million poor coarse

grains (such as sorghum or jowar, pearl millet or bajra, and finger millet or ragi) at Rs 1 per

kg. That's less than two US cents per kg at current exchange rates.

In contrast, the same coarse grains in the US are priced at a staggering $10 (Rs 630) and

above per kilogram.

89

The high prices are mostly on account of low supply and growing demand for cereals such as

quinoa and millets from health food faddists in the west. The nutritional quality of such

grains is not a state secret; it has been known to ancient India and Africa for millennia, long

before the arrival and popularity of wheat and rice.

But the advent of Green Revolution, with its emphasis on wheat and rice, sidelined these

traditional coarse grains, even as the scientific world exulted in its nutrient qualities.

Endorsed by world bodies such as FAO and nutrition experts, off take of coarse grains has

soared in the west even as it has declined in India and Africa, which are now overflowing

with cheap wheat and rice.

"Ragi cultivation has declined precipitously in the state," lamented Karnataka's US-educated

agriculture minister Krishna Byre Gowda, in a recent conversation with this correspondent.

"Poor rainfall, plunging water tables, and changing preferences have all contributed."

Karnataka is the leading producer of ragi in India, accounting for over 50 per cent of the

production. Nationwide, ragi accounts for less than one per cent of the cropped area and

cereal production; bajra is even less.

Of course, many poor in rural India, habituated to an ancient diet, still prefer coarse grains.

After the Karnataka government recently upstaged New Delhi by promising rice at Rs 1 per

kg, many BPL families in north Karnataka (where jowar is the staple grain) and in old

Mysore (where ragi is the staple), made it known that they preferred coarse grains to rice. The

government has now promised that these grains will also be offered at Rs 1 per kg.

Procurement will be a problem. Combined with declining domestic production, there are

fears that much of India's coarse grains will end up being exported if the western craze

catches on. Already, expat Indians have cottoned on to the health kick. Coarse grain and its

flour are now available at the popular US-based Indian grocery chain Patel brothers: a 2-

pound packet of bajri flour is priced at $2.99 (about Rs 200 at current exchange rate). Ragi is

almost twice as expensive — a pound of ragi flour is $2.49. In contrast, wheat flour costs less

than 50 cents a pound.

But it's the prices at US health food outlets that are eye-popping. Even on Amazon.com, a 2-

pound packet of ragi flour cost $12.10 (about Rs 800) as of Monday morning. How long

Indian governments will be able to procure and process such "rich cereals for the west, poor

grains in India" in the face of such skewed economics is something to chew on.

Government sets a target of 259 million tonnes of foodgrains production in 2013-14 (ET:

28.8.13)

Government has set a target of 259 million tonnes of foodgrains production in the year 2013-

14. Government of India is implementing various crop development programmes/schemes

through State Governments for achieving production targets of various crops.

Programmes like Rashtriya Krishi Vikas Yojana (RKVY), National Food Security Mission

(NFSM), Integrated Scheme on Oilseeds, Pulses, Oil Palm and Maize (ISOPOM), Bringing

Green Revolution to Eastern India (BGREI), Initiative for Nutritional Security through

Intensive Millets Promotion (INSIMP), Nutri-Farms Scheme, Special Programme on Oil

90

Palm Area Expansion (OPAE), Crop Diversification Programme, etc. are being implemented

for increasing production and productivity of different field crops.

Under these programmes, various activities like demonstration on high yielding

varieties/hybrids, distribution of seed of improved varieties/hybrids, need based plant

protection and soil amendments, resource conservation techniques/ energy management,

efficient water application tools, and cropping system based trainings, are being taken-up to

achieve the production target.

This information was given by Shri Tariq Anwar, Minister of State for Agriculture and Food

Processing Industries in written reply to a question in the Lok Sabha today.

NABARD allocates Rs 900 crore to Karnataka under RIDF (BS: 30.8.13)

In the first phase, it has sanctioned a loan of Rs 113.70 crore to the state government for

construction of 354 roads stretching 510 Kms and 22 bridges of 424 meters

The National Bank for Agriculture and Rural Development (NABARD) has allocated Rs 900

crore for various rural and agricultural infrastructure projects in Karnataka.

In the first phase, NABARD has sanctioned a loan of Rs 113.70 crore to the state government

under Rural Infrastructure Development Fund (RIDF XIX), for construction of 354 roads

stretching 510 Kms and 22 bridges of 424 meters. These roads and bridges are expected to

benefit over 4 million rural people in 29 districts of the state, NABARD said in a statement.

Further, they will connect 1,006 villages with 404 marketing centres and generate non-

recurring employment to the tune of 3.60 million man days and recurring employment of 288

jobs per year.

NABARD also sanctioned funds for 136 Anganwadis in 25 districts, which would improve

health and literacy level of the people in 136 villages of the state.

Agriculture ministry to improve domestic marketing system for agricultural products

(ET: 30.8.13)

With the aim to reduce the price gap between farmers and consumers and within inter-state,

the agriculture ministry in consultation with state governments and other stakeholders

endeavored to improve the domestic marketing system for agriculture produce including

fruits and vegetables.

Minister of state for agriculture and food processing industries, Tariq Anwar in Rajya Sabha

said that recently a committee of state ministers in charge of agriculture marketing was

constituted in March, 2010 under the chairmanship of Maharashtra and comprised of nine

States viz. Andhra Pradesh, Assam,Bihar, Haryana, Gujarat, Karnataka, Odisha, Madhya

Pradesh and Uttarakhand.

During the deliberations over the course of more than two years, the committee also invited

non member states from across the country for consultation on marketing reforms. The

91

committee submitted its report to the ministry on 4 rationalization of market fee and

commission charges on fruits and vegetables and enunciation of policy and legislative

framework to facilitate establishment of terminal markets (hub and spoke format) to link

more and more producing areas with collection centres(spokes) so as to reduce the gap

between farmers' price and consumers' price.

Other recommendations are single point levy of market fee across the country so that the

commodity is not liable to be charged fee again in interstate transactions and direct purchase

from farmers to reduce multiple handling of fruits and vegetables along the supply line.

Some of the other measures taken by this ministry include formulation of the Model Act,

2003 for adoption by the states and of Model Rules, 2007 for guidance of the states. As per

'State of the Indian Farmer-A Millennium Study' conducted by the ministry of agriculture in

2004, the farmers' share in consumers' rupee for perishable farm products is generally lower.

In case of fruits, vegetables and flowers, it varies from 32-68 %. The study in general

revealed that the producers' share in consumers' rupee differed, depending on marketing

channels adopted by the farmers.

As marketing of agricultural commodities is a dynamic subject linked to many factors viz.

production, supply, demand, import, export, etc and more so as agriculture marketing is a

state subject, therefore, reform of marketing system by its very nature has to be an on-going

effort.

Agriculture's share in GDP declines to 13.7% in 2012-13 (BS: 30.8.13)

Although production of foodgrains has increased from 230.8 MT in 2007-08 to 255.4 MT in

2013-14.

The share of agriculture and allied sectors in India's GDP has declined to 13.7% in 2012-13

due to shift from traditional agrarian economy to industry and service sectors, Parliament was

informed today.

"As per latest estimates released by Central Statistics Office (CSO) the share of agricultural

products/Agriculture and Allied Sectors in Gross Domestic Product (GDP) of the country was

51.9% in 1950-51, which has now come down to 13.7% in 2012-13 at 2004-05 prices,"

Minister of State for Agriculture Tariq Anwar said in a written reply to the Rajya Sabha.

The decrease in the share of Agricultural and Allied Sectors in GDP of the country in

comparison to other sectors is on account of structural changes due to a shift from a

traditional agrarian economy to industry and service dominated one, he added.

"This phenomenon is generally expected in the normal development of an economy," Anwar

said.

In a separate query, the minister said despite a decline in the sector's contribution to GDP,

foodgrain production and productivity has risen.

"Despite this, the production of foodgrains has increased from 230.8 million tonnes in 2007-

08 to 255.4 million tonnes in 2013-14 (fourth advance estimates)," Anwar added.

92

Similarly, productivity of foodgrains has increased from 1,860 kg per hectare in 2007-08 to

2,125 kg a hectare in 2012-13 (fourth advance estimate), he said.

The share of agriculture and allied sectors in India's GDP has declined to 13.7% in 2012-13

due to shift from traditional agrarian economy to industry and service sectors, Parliament was

informed today.

"As per latest estimates released by Central Statistics Office (CSO) the share of agricultural

products/Agriculture and Allied Sectors in Gross Domestic Product (GDP) of the country was

51.9% in 1950-51, which has now come down to 13.7% in 2012-13 at 2004-05 prices,"

Minister of State for Agriculture Tariq Anwar said in a written reply to the Rajya Sabha.

The decrease in the share of Agricultural and Allied Sectors in GDP of the country in

comparison to other sectors is on account of structural changes due to a shift from a

traditional agrarian economy to industry and service dominated one, he added.

"This phenomenon is generally expected in the normal development of an economy," Anwar

said.

In a separate query, the minister said despite a decline in the sector's contribution to GDP,

foodgrain production and productivity has risen.

"Despite this, the production of foodgrains has increased from 230.8 million tonnes in 2007-

08 to 255.4 million tonnes in 2013-14 (fourth advance estimates)," Anwar added.

Similarly, productivity of foodgrains has increased from 1,860 kg per hectare in 2007-08 to

2,125 kg a hectare in 2012-13 (fourth advance estimate), he said.

Growth recovery depends on agriculture: CRISIL (BS: 30.8.13)

Slowing growth has had an adverse impact on tax revenues and the depreciating rupee is

raising the subsidy burden of the government

Rating agency CRISIL said on Friday that any recovery in India’s economic situation would

depend on agriculture growth on the back of a satisfactory monsoon. The momentum in

services and industry is likely to remain weak, the rating agency noted.

According to CRISIL, the 4.4 per cent GDP growth in the first quarter came on the back of

higher government spending. The growth may not be sustainable in the coming quarters, it

added.

Higher government spending lifted the growth of community, social and personal services to

9.4 per cent in the first quarter, compared to four per cent in the previous quarter.

“If not for a sharp increase in government spending, community, social and personal services

would have, at best, maintained its average growth rate of the past few quarters and GDP

growth in Q1, 2013-14 would have been even lower at around 4.0 per cent,” the agency said.

Slowing growth is having an adverse impact on tax revenues and the depreciating rupee is

raising the subsidy burden of the government, CRISIL warned. It said the government will

93

have to cut back expenditure sharply from budgeted levels to maintain its fiscal deficit target

of 4.8 per cent of GDP.

With the liquidity tightening measures increasing the cost of funds for the banks and a weak

rupee worsening inflationary risks, the likelihood of a repo rate cut has waned. Therefore,

higher lending rates will further lower investment demand, delaying a recovery in the

manufacturing sector, CRISIL said.

NAAS bats for present system of testing genetic modified crops (ET: 31.8.13)

The National Academy of Agricultural Sciences (NAAS) has supported the present

mechanism for testing of genetic modified (GM) crops, saying the process is "stringent" and

"adequate" enough.

"NAAS feels strongly that the mechanism in place for certifying the safety of transgenic

crops and GM food in India is most stringent, adequate and at the same time dynamic," the

academy said in a statement.

A five-member technical expert committee (TEC) appointed by the Supreme Court has

recommended banning research field trials of all biotech crops in the country.

NAAS President R B Singh said the committee lacked an agriculture expert but after the

request made by NAAS before the Supreme Court, R S Paroda, former Director General,

ICAR, was included in it.

He claimed that five members of TEC did not include or seek his views on the issue, which

compelled Paroda to submit a separate report with a request to the Supreme Court to consider

his report along with the report submitted by the five other members.

Paroda's report clearly indicates the situation of Indian agriculture highlighting problem areas

and need for exploring all scientific interventions, he further said and demanded that the

report should be made available to all parties and the Supreme Court had issued the necessary

direction.

Indian Council of Agricultural Reserach (ICAR) Director General S Ayyappan assured full

support for strengthening of the bio-safety evaluation of GM crops including establishment of

an 'all India coordinated research project on transgenic testing and evaluation' as suggested in

Paroda's report.

NAAS has more than 500 top agricultural scientists from India and abroad including leading

biotechnologists as its fellows, who provide critical inputs in shaping the agricultural policy

and research dimension in the country.

94

Gujarat 'Global High Tech Agro Summit' to be held in Gandhinagar from September 9

(ET: 31.8.13)

The Gujarat government will be holding the Vibrant Gujarat Global High Tech Agro Summit

in state capital Gandhinagar from September 9.

"The two-day summit aims to bring together large number of progressive farmers from across

the country and provide them a platform to interact with leaders, policy makers, academia,

scientists, investors and technologists," Chief Minister Narendra Modi today told PTI.

"Also, it will educate farmers on how to use latest agri-techno methods to increase produce

and generate more revenue, despite water scarcity and paucity of land," he said.

It will make poor farmers partners in agriculture development, the CM added.

Gujarat's average agriculture growth hovers around 12 per cent after it began holding "

Krushi Melas" (agriculture fairs) since 2003 after Modi took over the reins in October 2001

India incurs Rs 2 trillion/year post harvest loss of fruits, veggies (ET : 1.9.13)

The country is incurring post harvest losses of fruits and vegetable worth Rs 2 lakh crore per

year, due to lack of storage and processing facilities, according to a study.

"India incurs post-harvest fruits and vegetable losses worth over Rs 2 lakh crore each year

largely owing to the absence of food processing units, modern cold storage facilities and a

callous attitude towards tackling the grave issue of post-harvest losses, "Assocham said in a

study.

The study titled 'Horticulture Sector in India: State Level Experience' also highlighted that

about 22 per cent of fruits and vegetables produced in India reach the wholesale market.

Among the states, post harvest losses are maximum in West Bengal worth over Rs 13,657

crore followed by Gujarat (Rs 11,400 crore), Bihar (Rs 10,700 crore) and Uttar Pradesh (Rs

10,300 crore).

"Developing wholesale markets together with enhancing the cold storage capacities in local

and regional markets are key for reducing post-harvest fruits and vegetable losses and

enhancing their market arrival," the study added.

However, the study has pegged the total production of fruits and vegetables in the country is

likely to cross 377 million tonnes by 2021 from the present level of 227 MT.

"Currently, over 77 MT fruits and about 150 MT vegetables are produced in India and their

production is growing at a compounded annual growth rate ( CAGR) ranging between 5-6 per

cent, respectively," the study said.

The study has projected that demand for fruits and vegetables in India would grow

95

exponentially as the economy and agriculture sector is likely to grow at over eight per cent

and about four per cent, respectively as estimated by the 12th Five Year Plan.

Banana, mango, citrus, papaya and guava account for major share in total fruit production

across India. Potato, tomato, onion, brinjal and tapioca account for maximum share in

vegetable production in the country.

India Inc goes to Bharat for a monsoon harvest (BS: 2.9.13)

A recent analysis by CACP shows that a 5% increase in agriculture growth in 2013-14 will

translate into a 15-20% rise in nominal rural incomes

A sharp rise in rural incomes and farm wages on the back of a record monsoon and bumper

kharif harvest is perhaps a ray of hope forIndia Inc, otherwise staring at an uncertain

economic situation.

A clutch of companies ranging from tractor and farm equipment makers, fertiliser and seed

players, to consumer goods companies, two-wheeler brands and mobile handset makers are in

a race to capture the incremental consumption spend from rural India.

A recent analysis done by the Commission for Agricultural Costs and Prices (CACP) shows a

five per cent increase in agriculture growth in 2013-14 will translate into a 15-20 per cent rise

in nominal rural incomes. This does not include income of agriculture labourers.

Wages of farm labourers have been rising by around 20 per cent yearly in the last three years

and if the trend is maintained in 2013-14, economists expect rural incomes to increase by at

least 20 per cent. The agriculture sector did not grow much in the first quarter of this financial

year. The sector, with allied activities, expanded just 2.7 per cent in the April-June quarter

against 2.9 per cent in the corresponding period of the previous financial year, while overall

gross domestic product expanded by a less-than-expected 4.4 per cent. However, economists

peg agriculture growth at five-seven per cent for the entire 2013-14, as the effect of good

monsoon will be felt in the coming quarters.

Horticulture crops are also expected to benefit immensely from the copious southwest

monsoon. Usually, horticulture crops give three-four times higher returns than cereals, so if

nominal rural incomes rise by 15-20 per cent in 2013-14, it will be much more in the case of

farmers who cultivate these.

With almost 49 per cent of household expenditure in rural India going for food items, a surge

in demand for food products is expected to come from the rural side. “This is perhaps the

biggest turnaround story the Indian economy has been waiting for long,” says Ashok Gulati,

chairman, Commission for Agricultural Costs and Prices.

India’s southwest monsoon has been 11 per cent more than normal till August 30. The rains,

vital for agriculture, as just 40 per cent of the total arable land is under irrigation, have not

only been quantitatively more this year, but their distribution also been rather uniform. The

bountiful monsoon has already led to a heady spurt in tractor sales. According to the Tractor

Manufacturers Association, sales were up 22.9 per cent in the April-June quarter, compared

with the year-ago period. Analysts tracking the sector expect the industry to clock volume

growth of 10 per cent for

96

the full financial year against volume decline of three per cent in FY13. Market leader

Mahindra & Mahindra reported a 25 per cent jump in sales in the quarter.

Similarly, companies in the seed, fertiliser and pesticide business are seeing an uptick in

demand over the last two-three months.

Consumer goods companies – especially those in the fast-moving consumer goods (FMCG)

space – are sprucing up their last-mile connect to rural India. Currently, around 40 per cent of

FMCG sales are accounted for by rural markets. Given the sluggish demand sentiment in

urban centres, the coming months will put to test the efficacy of rural distribution and sales

channels of consumer goods companies. Most of these have been investing heavily in

strengthening their rural outreach operations after the 2008 slowdown shock.

Dabur India, for instance, put in place an initiative in 2012 to increase its distribution

footprint in rural India. “We have doubled our rural reach and established direct reach to

villages of 3,000 population,” says George Angelo, executive director-sales, Dabur India.

This has led to demand coming from hinterland for products such as packaged juices,

including exotic variants like plum, peach and apricot, and for fairness bleaches, from the

interior markets of Punjab, Maharashtra, Uttar Pradesh, Bihar and even northeast, say

company executives. Rural markets accounted for almost 50 per cent of Dabur India top line

of Rs 6,146 crore in FY13.

Similarly, the country’s biggest FMCG player, Hindustan Unilever Ltd has tripled its reach in

the rural markets since 2009. The company’s stated objective is to push the share of rural

markets in terms of contribution to total sales from around 40 per cent to over 50 per cent,

say analysts tracking the company.

The year 2013 would put to test HUL’s rural strategy in leveraging the demand spurt.

Two-wheeler players, too, are getting their act in place in rural markets. Most expect retail

demand to spur this festive season post-harvest in the October-December months.

Typically, the festive season in October-November sees a surge in sales volumes, after the

slow monsoon months. Players who have strong rural distribution and sales network are most

buoyant. For instance, around 46 per cent of total sales of Hero MotoCorp come from rural

markets. "We are well-placed to take advantage of the good monsoon and the resultant

demand boost,” says Anil Dua, senior vice-president (marketing and sales), Hero MotoCorp.

The company covers over 100,000 villages under its ‘Har Gaon, Har Aangan’ rural initiative.

Loan fairs, exchange camps are conducted regularly in upcountry and rural markets. Special

service camps are held under the Service Har Jagah scheme in village locations, with 1,100

specially designed motorcycles fitted with customised boxes offering servicing facilities in

remote areas, says Dua.

Mobile phone handset players, too, have been increasing their presence in rural markets.

Mobile tele-density in rural areas has grown from 1.9 per cent in 2005 to around 38 per cent

in 2012. As per a research of mobile phone usage in rural markets in Bihar and Punjab, 75 per

cent of mobile phone usage during agricultural cycle is related to crop planning, planting and

inputs.

97

Economists point out considering that 60 per cent of India still stays in rural areas, this

scenario of bountiful monsoon, coupled with growing rural income in an election year, could

offer an unexpected bonanza for India Inc in exploring the hidden untapped economic

potential of rural India.

'Farmers should register their innovative agri-tech with ICAR' (ET : 3.9.13)

Farmers, who have innovated agri-technologies, should register with state-run research body

ICAR so as to promote widespread use of such technologies across the country and improve

production.

"Technologies developed by the farmers in one part of the country need to be shared with

farmers in other parts as well and for this, these technologies or innovations need to be

registered with ICAR," Agriculture Secretary Ashish Bahuguna said at an ICAR workshop.

Farmers need to adopt efficient and effective farm technologies, he added.

The Indian Council of Agricultural Research (ICAR) along with Trust for Advancement of

Agricultural Sciences (TAAS) and Asia-Pacific Association of Agricultural Research

Institutions (APAARI) are organising a three-day workshop on "Out-scaling Farm

Innovations" from today.

Speaking at the workshop, ICAR Director General S Ayyappan said, "ICAR is motivating the

farmers to try new innovations at their respective farms. We are also working to register

technologies developed by some farmers and share them with other farmers across the

country."

Around 350 delegates including farmers, scientists and officials from different state

agriculture departments are taking part in the event.

Kharif output likely to improve by 7.03 pc in 2013-14: NCML (ET: 3.9.13)

The National Collateral Management Services Ltd today said with the recent development in

the crop weather and sowing updates, total kharif foodgrain output is now expected to

improve by 7.03 per cent to 134.53 million tonnes over the government's fourth advance

estimates.

According to the government's 4th advance estimates, the total food grain production is

estimated to be 125.7 million tonnes (MT).

India's total foodgrain production stood at 255.36 MT, according to government data.

The total food grain area is likely to be 64.95 million hectares over government's fourth

advance estimate of 60.08 million hectares, NCML said in a statement.

Earlier in May 2013, NCML estimated the kharif foodgrain production to improve by 8.1 per

cent to 135 MT.

98

There is a marginal drop in production estimate due to recent widespread floods and

expectation of lower yield in some producing areas.

Rice is expected to show an increase in both area and production by 4.86 per cent and 5.17

per cent, respectively over last year.

Cereal crops like ragi, jowar and bajra are expected to surpass the last year's production

figures by 30 per cent.

Overall oilseed crop production is expected to increase by 16.47 per cent over last year.

Groundnut production is expected to increase by 55.69 per cent and soybean by 6.88 per cent

over last year.

However, NCML said, in this current monsoon season, the cash crop section is likely to show

a negative growth in terms of both area and production.

In sugarcane the area is expected to decline by 15.88 per cent and production by 14.61 per

cent. Cotton area is likely to decline by 6.29 per cent and production by 6.33 per cent.

Foodgrain output set to rise to record high this kharif season (BS: 4.9.13)

Fair distribution of rainfall this monsoon season attributed to good produce

India’s foodgrain output is likely to set a record this kharif season due to the almost-even

distribution of rainfall this monsoon season.

The foodgrain output was set to rise five per cent from the number presented by the Ministry

of Agriculture in the Fourth Advanced Estimate.

A study conducted by warehousing and collateral management company, National Collateral

Management Services Ltd, a group company of the National Commodity & Derivatives

Exchange Ltd, showed India’s total foodgrain output at 134.53 mt during the kharif season.

The Ministry of Agriculture had, in the advanced estimate released on July 22, said the

foodgrain output during the previous kharif season was 128.20 mt. Although, there had been

reports of crop damage in some areas, due to flood and drought, the average crop condition

looks favourable.

The India Meteorological Department reported an average 98 per cent rainfall between June

and August this year, with excess in central and north-west regions and the deficit in the

north-east areas. The study showed rice, maize, ragi and jowar output at 97.55 mt, 16.50 mt,

2.12 mt and 3.54 mt respectively.

Monsoon rains to start withdrawal from September 9 (ET 6.9.13)

Monsoon is likely to start withdrawing from the north-western states from Sept. 9, slightly

ahead of the normal schedule, after delivering above-average rains.

99

Monsoon is likely to start withdrawing from the north-western states from Sept. 9, slightly

ahead of the normal schedule, after delivering above-average rains, two weather department

officials said on Friday.

Monsoon rains usually start retreating from the country's west by mid-September. Summer

crops do not need heavy rain at this stage of growth, but just sporadic downpours to aid the

maturing process.

"We are expecting the withdrawal of monsoon rains to start from Rajasthan and adjourning

north-west India around early next week," said B.P. Yadav, director at India Meteorological

Department.

The country has so far received 8 percent more rainfall than average since the beginning of

the four-month season on June 1, allowing farmers to increase acreage.

The monsoon, crucial for the 55 percent of farmland that does not have irrigation, brought the

heaviest rains in nearly two decades during its first half this year, fanning hopes for bumper

harvests.

Farm GDP growth can more than double from 1.9% to 4.5%: Crisil (ET: 11.9.13)

Agriculture is set to surprise on the upside because of a bountiful and well-distributed

monsoon. Farm GDP growth could more than double from last year's 1.9% to 4.5%, said

Crisil in its 'State of the Nation' report released on Wednesday. This will help check food

prices and support rural consumption.

Crisil released its first 'State of the Nation' report, a unique top-down-meets-bottom-up

analysis that offers a holistic perspective on the economic state of India.

The study strings together deep analyses from the micro to the macro level. It uses granular

data on 2,481 companies that CRISIL rates as investment grade; these account for 32% of

banks' corporate lending.

It leverages CRISIL's industry research spanning more than 70 sectors. Finally, the analysis

has a strong overlay of CRISIL's macroeconomic research capabilities and profound

understanding of risk. The report flags concerns, disproves some perceptions and throws light

on key positives.

Roopa Kudva, Managing Director & CEO, CRISIL, said: "In the current environment, we

thought it was important to present a comprehensive analysis that is objective and fact-based.

This study draws on the wealth of data and information in CRISIL, and our wide-ranging and

deep analytical perspectives."

The report says that forex volatility is the least of the sources of stress for 2,481 companies

CRISIL rates as investment-grade (BBB- and above). It affects only 6% of them.

What stresses nearly a quarter of the companies analysed is the demand slowdown. Two out

of three sectors will see a decline in revenue growth. The collapse of the investment cycle

will severely dent infrastructure, capital goods, automobiles and real estate sectors.

100

Larger firms with operating income over Rs.1,000 crore are more severely impacted by

higher levels of indebtedness and increasing stress on financing cost. "Stretched working

capital cycles are aggravating liquidity pressures on companies. Overall, liquidity pressures

are a source of stress for 16% of the companies analysed; but for larger firms it is higher at

27%," Kudva pointed out.

Rupee depreciation has increased India's currency competitiveness. "The rupee could rebound

to Rs.60/USD by March 2014 as the current account deficit declines to 3.9%, but the

currency will remain significantly depreciated compared with last fiscal," Kudva said. Hence,

export-linked sectors such as IT-ITES, pharmaceuticals, textiles, readymade garments and

cotton-yarn spinning will do well.

Separately, the farm fillip and pricing power will help the tractor and telecom sectors,

respectively, to do well. Services, which have been the bulwark of the economy for several

years, will grow at just 6.5% this fiscal compared with the nearly 10% through the last

decade.

CRISIL's GDP growth estimate has been reduced to a decade-low of 4.8% for 2013-14.

"With luck, if agriculture surges 6%, it could push overall GDP growth to 5.2%," she said.

What the above analysis adds up to is that the economy will stay in L-shaped trajectory

through this fiscal, unlike the V-shaped recovery seen after the Lehman crisis in 2008.

Agri exports fall 19% in Q1 (BS 13.9.13)

Lower exports to the US and Bangladesh have been the primary reason for the fall

In the first quarter of the current financial year, India’s agricultural export was down 19 per

cent in terms of value over the last year, primarily on the back of lower exports to the US and

Bangladesh.

India’s total agri-export in the first three months of the last

financial year was $6.36 billion, which tumbled to $5.18

billion in the present financial year, data from Agricultural

and Processed Food Products Export Development Authority

showed.

Exports to the US were down by 59 per cent, at about $ 793

million between April-June this year over the last year. A

price crash of guar gum, the highest exported agri-commodity

to the US from India, has been one of the biggest reasons for

the decline in exports. Guar gum exports to the US fell 63 per

cent in terms of value, but remained flat in terms of quantity,

over a year’s time. Last year saw an unexpected spurt in guar gum prices due to bulk

purchase from US shale gas companies in the beginning of the year and very low demand by

the end of the year. The prices fell from about peak prices of Rs 1,025 a kg in April-May

2012, to Rs 200 per kg by October-December 2012.

101

Apart from the US, India’s exports to Bangladesh also saw a substantial fall in value, 66 per

cent over a year’s time at $87 million. Last year, India exported jaggery and confectionery

worth $150 million to Bangladesh, against nil in the first quarter of the present financial year.

However, the positive news for India comes from Iran, which saw a 140 per cent jump in

export value in the first three months of the financial year at $682 million. The export growth

was driven by exports of Basmati rice to the country, which saw a 160 per cent or three fold

rise in realisation over a year’s time. Iran accounts for 40 per cent of India’s Basmati exports,

which were dented by the payment crisis last year.

In terms of product mix, Basmati has emerged as India’s top export commodity from India,

followed by buffalo meat and guar gum, in the first quarter of the this financial year. India’s

Basmati rice export increased by 62 per cent, while that of guar gum fell by 59 per cent in the

first quarter. Buffalo meat exports, currently, India’s second largest agri-export commodity in

terms of value, increased by 20 per cent in a year’s time

Scientists develop 200 GM crops, await govt nod for trials (ET: 13.9.13)

Do you think only 'Monsanto' (or any multi-national seed company) has the capacity to

develop transgenic crops? The answer is a clear 'no'. Indian scientists, working with public

sector research institutions and universities, too have developed many genetically engineered

varieties which, in fact, could not move beyond lab or 'restricted' trials.

The list accessed by the TOI shows that Indian scientists have over the years developed more

than 200 genetically modified (GM) varieties of as many as 15 crops including cotton,

brinjal, castor, groundnut, mustard, papaya, potato, rice, rubber, sugarcane, wheat and

tomato.

These varieties, developed by scientists in different Indian universities and research

institutions, have all the traits — resistance to insect, fungal, drought and virus — which may

bring them in the league of Bt cotton by increasing productivity and export earnings.

Indigenous transgenic varieties include a high salt-tolerant rice which can grow in salty water

near coast. This variety is developed using genes of mangrove. Similarly, Indian scientists

have developed a tomato variety having shelf life of over 50 days. The farmers will, however,

reap the benefit of these findings only when government allows the scientists to go for

extensive field trials and eventually for commercial production.

Bt cotton is the only genetically modified crop whose commercial production is allowed in

India. Fate of others is caught in a pending petition filed in Supreme Court by anti-GM crops

activists who have sought a complete ban on genetically modified technology.

Activists say transgenic crops will not only affect human health but it will also have a

negative impact on biodiversity in the long run.

Indian scientists, involved in developing genetically modified varieties of many crops,

dismissed such apprehensions at a number of occasions, They, however, found themselves on

the same page with at least a section within the anti-GM crop activists who believe that a

102

green signal to commercial production of such crops will affect the Indian farmers due to

monopolistic control of seed business by multi-national companies (MNCs).

"The solution to this problem is to encourage competition among the GM seed companies

and even more importantly to have mission-mode programmes for the development of

genetically modified seeds in the public sector", said N K Singh, professor at National

Research Centre on Plant Biotechnology of the IARI, while referring to the list of varieties

developed by Indian scientists.

Eyes on Food Security Law, FCI's food grains movement up by 30% (ET 18.9.13)

The movement of food grains by the Food Corporation of India (FCI) across the country has

gone up by 30% in the last quarter.

The movement of food grains by the Food Corporation of India (FCI) across the country has

gone up by 30% in the last quarter as compared to the corresponding period last year, with

the state-run corporation bracing to ensure adequate supply under the food security law.

FCI undertook all-India movement of food grains on its inter-region account (excluding the

movement within food grain-procuring states) to the tune of 12.64 million tonnes during

April-July this year. The figure for the same period last year was pegged at 9.28 million

tonnes.

"We are storing enough food grains in our godowns spread across the country in view of the

food security law," said a senior official.

The speedy evacuation of food grains from the FCI godowns in the procuring states like

Punjab, Haryana, Madhya Pradesh, Chhattisgarh, Andhra Pradesh and Odisha is expected to

create suitable storage space, making the procurement easier during the kharif season,

beginning October 1.

During July-August this year, FCI doubled its supply to the flood-hit Uttrakhand. Compared

to the monthly supply of 20,000 tonnes of wheat earlier, the corporation made available

40,000 tonnes of wheat to the state.

Similarly, FCI initiated measures to ensure one-and-a-half months of stocks under the Public

Distribution System in the north-eastern states by increasing supplies to the region.

FCI also increased the food grains movement to Tamil Nadu to 5.58 lakh tonnes in April this

year as compared to 3.3 lakh tonnes during the corresponding period last year due to the

drought situation prevailing in the state. In May, the corporation supplied 4.4 lakh tonnes of

food grains to the southern state.

The average monthly supply to Kerala has also gone up by 30-40 per cent this year.

Compared to last year's monthly average of 1.25 lakh tonnes, FCI supplied, on an average,

1.50 lakh tonnes of food grains to Kerala every month this year.

103

"In view of the food security law, we are anticipating a 5-10 % increase in supply of stocks

under the PDS. But to be on the safer side, we are already transporting stocks to our godowns

in the states," the official said.

"The Railways are giving us complete cooperation in supplying food grains to the states," he

pointed out. "The transport by railways is almost 100 per cent of FCI's demand."

A coordination committee, comprising senior officials of FCI, Railways and the Ministry of

Food, holds weekly meetings to sort out movement-related issues across the country, the

official said. "The aim is to optimise movement of food grains throughout the country," he

added.

FCI to create additional 5.4 lakh tonnes of food grain storage capacity in NE (ET

19.9.13)

Food Corporation of India (FCI) will create an additional 5.4 lakh tonnes of food grain

storage capacity in the North Eastern States, including Sikkim, with a total allocation of Rs

568 Crore.

Chairman & Managing Director C. Viswanath who was in Guwahati on Wednesday said that

considering the strategic importance of the North-East region, the FCI has prepared a special

package plan exclusively for the North East. "Out of Rs 568.17 Crore around Rs. 458.56

Crore is earmarked to be spent during 12th Five Year Plan for storage construction.

Viswanath said, "For FCI, the augmentation of storage capacity has been a continuous

process and has been primarily financed by planned resources. Now there is good progress.

Out of 49 projects, 19 projects of 100,060 tonne-capacities (4 in Assam, 9 in Arunachal

Pradesh, 2 in Manipur, 1 each in Meghalaya and Tripura and 2 in Nagaland) are currently

under construction. One project of Hailakandi, Assam and two projects in Manipur at Jiribam

and Senapati have already been completed and made storage worthy".

He added, "Land has been acquired further for 6 projects of 128,500 tonne-capacities. Efforts

have been made to get land notified in five more projects. It is expected that land acquisition

phase will be over and construction will be underway for rest of the projects."

Create 50 grain storage facilities for food law: MS Swaminathan (ET 20.9.13)

In order to implement the Food Security Law smoothly, the government should create ultra-

modern foodgrain storage facilities - each with a million tonne capacity - at 50 locations

across the country, noted agriculture scientist M S Swaminathan said today.

Outlining the challenges facing Indian agriculture, he also suggested that food losses and

wastages should be eliminated or minimised at production as well as consumption levels to

ensure food security for people.

104

Swaminathan said the government will require 64 million tonne foodgrain every year to

fulfill the commitment under Food Security Law, recently passed by the Parliament, that

provides for 5 kg of foodgrain per month per person to 67 per cent of the country's population

at Rs 1-3 per kg.

"There should be national grid of grain storage. In 50 different locations, including north-

eastern region, develop ultra-modern storage with a capacity of one million tonnes each,"

Swaminathan said, while addressing Agriculture Leadership Summit organised by

Agriculture Today magazine.

He noted that right to food can be implemented only with the help of farmers. "We have to

turn our attention from files to farmers".

Stating that there is "no time to relax" as farm sector faces many challenges, Swaminathan

said the post-harvest management has not kept pace with the increase in production.

He pointed out that one-third of global food production is lost or wasted and emphasised on

the need to minimise or eliminate food losses at production level and reduce wastages at

consumption stage.

Swaminathan also expressed concern over high degree of malnutrition both globally and

India.

Speaking at the event, Textile Minister K S Rao said there is great injustice being done to the

farming community in the pricing policy of the agriculture produce and demanded a new,

more remunerative policy.

The minister expressed concern over the widening disparity between the income of farmers

and urban people.

Rao suggested that there should not be any interest on the farm loan.

"Status and respect of farmers is going down. How long it will go on," Rao asked, adding that

nobody speaks for farmers in Parliament, while lobbyists are there for industrialists.

BJP leader Murli Manohar Joshi spoke about protecting bio-diversity of Indian agriculture

and cautioned against becoming dependent on one particular seed.

"We need to determine the importance of agriculture in our economy. We have to think about

agriculture policy," Joshi said, adding that the policy should take into account the land, water,

seed, productivity and bio-diversity.

"Farmers should get seeds, fertilisers and pesticides," he said, emphasising upon the need of

investment and research in the agriculture sector.

India trying to get US support for higher WTO farm subsidy limits (BL 21.9.13)

In return, New Delhi may offer to back US proposal on trade facilitation

105

India wants global trade rules to be amended so that developing countries can have higher

farm subsidy limits to fund food security programmes.

And it is going all out to convince the US not to challenge its efforts to change those rules.

Prime Minister Manmohan Singh is expected to take up the issue with US President Barack

Obama during their meeting later this month.

At the same time, Commerce Minister Anand Sharma will continue talks with top officials in

Washington, a Commerce Department official told Business Line.

Trade pact

New Delhi could make its support for a US initiative on a trade facilitation agreement at the

World Trade Organisation (WTO) contingent on US backing for its efforts to amend farm

subsidy limits, the official added. The US move is aimed at speeding up movement of goods

across borders.

India’s Permanent Mission at the WTO, too, has been instructed by the Government to

intensify its engagement with the US Mission and get its backing.

India and several developing countries, including China, Pakistan and Indonesia, have

proposed amendments to the Agreement on Agriculture at the WTO to remove limits on

public stockholding and food aid. These countries, which are part of the G-33 bloc, want the

amendments to be made at the WTO Ministerial meeting in Bali this December.

Fears of breach

New Delhi is apprehensive that once its new legislation on food security, which promises

subsidised foodgrain to about 70 per cent of the population, is implemented by all States, it

will breach the WTO’s subsidy limit for members. This will leave India open to penalties

under WTO rules.

The Agreement on Agriculture allows WTO members so-called ‘market distorting subsidies’

up to a limit of 10 per cent of total production.

“While several developed members, including the European Union, are considering the G-

33’s proposal sympathetically, the US has been opposing it under one pretext or the other,”

said the Commerce Department official.

During his discussions with the US President at the forthcoming WTO Ministerial meeting in

Bali, Prime Minister Singh is likely to emphasise that India cannot compromise on food

security.

Sharma met the US Trade Representative in Brunei last month to pitch for a positive and

balanced outcome from the Bali Ministerial that benefits both countries.

106

One-third of the country received excess rainfall: IMD (BL 22.9.13)

One-third of the country received excess rainfall this year during monsoon which has

withdrawn from the northern and western parts.

According to the Meteorological Department, 53 per cent of the country received normal

rainfall between June 1 and September 18 while some parts saw deficit in the rainfall even to

the tune of 28 per cent.

This year, IMD recorded 864 mm of rainfall as compared to normal rainfall of 829 mm —

which is 4 per cent more.

The regions that received excess rainfall are Jammu and Kashmir, eastern and western

Madhya Pradesh, Vidharba and northern Maharashtra, the Telangana and Rayalseema region

of Andhra Pradesh, southern Karnataka, Kerala and the Andaman and Nicobar islands.

Almost the entire north India, Gujarat, Chhattisgarh, Odisha, Tamil Nadu and the coastal

regions of the eastern and Western India and the Lakshadweep islands received normal

rainfall. However, Delhi and Haryana reported “deficient” rainfall.

Parts of eastern India (Bihar and Jharkhand) and almost entire northeast India also reported

“deficient rainfall”. It reported rainfall of 965 mm as compared to normal rainfall of 1,334

mm — 28 per cent less than the normal rainfall. The Bihar Government has already declared

33 of the 38 districts “drought-affected”.

The Southwest monsoon has withdrawn completely from Jammu and Kashmir, Himachal

Pradesh, parts of Haryana, Rajasthan and the Kutch region of Gujarat.

Kharif foodgrain output may surpass last year's level: Sharad Pawar (ET: 23.9.13)

India's foodgrain production is projected to increase marginally in the kharif (summer) season

this year to 129.32 million tonnes after more than half the country received normal monsoon

rains.

"Total foodgrain production in the kharif season of the 2013-14 crop year is definitely

expected to be higher than last year's level at 129.32 million tonnes," Agriculture

MinisterSharad Pawar told PTI.

Foodgrain output stood at 128.2 million tonnes in last year's kharif season. Sowing in the

kharif season starts with the southwest monsoon in June and harvesting from October.

The initial estimate falls short of the target of 130.5 million tonnes of foodgrain production

set for the kharif season this year. Rice, pulses, cotton, maize and soyabean are the major

kharif crops.

Pawar said production of paddy, the main kharif crop, is projected to exceed last year's level

107

of 92.76 million tonnes as good monsoon rainfall has boosted the acreage and crop prospects.

He didn't give an output estimate for paddy.

Except for sugarcane, which was sown in a smaller area, production of other kharif crops

looks bright, he said.

Crop-wise production forecast would be provided tomorrow when the first advance estimates

of the kharif season for the 2013-14 crop year (July-June) are released, he added.

According to the Indian Meteorological Department, 53 per cent of the country received

normal rains during the June to September monsoon season, while one-third of the country

got excess rains. The monsoon has withdrawn from the northern and western parts.

A good monsoon is needed for India's economic growth as more than 60 per cent of the

population depends on agriculture and allied activities.

The Agriculture Ministry has set a target of 128.5 million tonnes of foodgrain production

during the rabi (winter) season, which will start from next month through February 2014.

India may achieve 2nd highest foodgrain output this kharif (ET: 24.9.13)

India is likely to achieve the second highest foodgrain production at 129.32 million tonnes

this kharif season(summer crops) on better monsoon, but rice output is seen declining

marginally.

Agriculture Minister Sharad Pawar said a record foodgrain production is expected in full

2013-14 crop year on account of good rain and "there will be a rebound in agriculture

growth" from 1.9 per cent in the last financial year.

An improvement in the agriculture sector is vital for the government to contain food inflation

and boost economic growth rate, which was a mere 4.4 per cent in the first quarter 2013-14,

ahead of 2014 general elections in May next year.

Releasing the first forecast of foodgrain production in the kharif season, Pawar said: "We are

poised to produce 129.32 million tonnes this kharif. This will be the second highest

production."

Foodgrain output had touched all-time record of 131.27 million tonnes in the kharif season of

2011-12. It, however, fell to 128.20 million tonnes last year due to drought.

Higher levels of production in pulses and coarse cereals are projected to lift the overall kharif

foodgrain output, while cotton and oilseeds production are set to be at all-time record levels.

Noting that the current year has been good for the farm sector, Pawar said: "With favourable

weather condition, I am confident that kharif production will be substantially higher than

what has been estimated at present.

108

"And there will be highest foodgrain production in the entire 2013-14 crop year (June-July).

Definitely, there will be a rebound in agriculture growth."

Pawar also advocated use of new farm technologies, including GM crops, to sustain growth

in the farm sector and meet extra foodgrain requirement under the food law.

According to the first estimates, rice production is expected to drop marginally to 92.32

million tonnes this kharif due to deficient rain in rice-growing eastern states. Last kharif, rice

output was 92.76 million tonnes.

Sowing in kharif season begins with the onset of southwest monsoon in June and the

harvesting starts from October.

Kharif output to be flat on poor rains in East (BS 25.9.13)

Experts expect better rabi yields, peg overall agriculture growth at 5% for FY14

Kharif foodgrain production in FY14 will be almost static at 129.32 million tonnes, according

to the first advance estimates released on Tuesday. This is just 0.87 per cent more than last

year’s 128.20 million tonnes. The flat growth is due to low rains in Bihar, Jharkhand and

Assam, which has affected paddy production, and also because of floods in other parts of the

country.

This could impact agriculture growth in 2013-14, which is pegged at five per cent by the

policy makers against 1.9 per cent in 2012-13.

About 50 per cent of India’s total annual

foodgrain is produced during the kharif

season, sowing for which starts around

June and the crop is harvested around

October. In the first quarter of the current

financial year, agriculture and allied

activities grew just 2.7 per cent, dragging

the overall economic growth down to a

four-year low of 4.4 per cent.

“An overall agriculture growth of five per

cent is possible as rabi crops are still to

come,” said D K Joshi, chief economist at

CRISIL.

The Prime Minister’s Economic Advisory Council has pegged farm and allied sector growth

at 4.8 per cent in the current financial year against 1.9 per cent in 2012-13. Larger economic

growth fell to a decade-low of five per cent in 2012-13.

Releasing the estimates, Agriculture Minister Sharad Pawar said there is likely to be an

upward revision of 5-10 per cent when final estimates come as the full impact of monsoon is

109

yet to be factored in. Pawar said foodgrain production in 2013-14 will be the second highest

ever.

The estimates released on Tuesday showed production of paddy, the main foodgrain

produced during the kharif season, is expected to be around 92.32 million tonnes, marginally

less than last year’s 92.76 million tonnes.

“The estimate for rice output is kept lower as deficient rains in Bihar, Jharkhand and North

East have affected the kharif crops,” Agriculture Commissioner J S Sandhu said at a

conference.

According to India Meteorological Department, till September 23, southwest monsoon over

Bihar has been around 30 per cent below normal, while in Assam it has been 34 per cent

below normal and in Jharkhand, the rains have been 24 per cent less than normal.

According to an agriculture expert, the drop in rice output is marginal. “We are hopeful that

by the time final analysis comes, kharif foodgrain production in 2013-14 would be much

more than this.”

However, apart from eastern India, above-average rain in the remaining parts of the country

has pushed up production of other kharif crops, although pulses production was up

marginally.

Data showed pulse production is estimated to be 6.01 million tonnes in the current kharif

season, representing an increase of 1.69 per cent over last year’s 5.91 million tonnes.

However, oilseeds output is estimated to be 23.96 million tonnes in FY14, almost 15 per cent

more than last year.

Production of sugarcane in 2013-14 is expected to be 341.77 million tonnes, 0.82 per cent

more than last year’s 338.96 million tonnes, while cotton production is estimated to be 35.30

million bales (1 bale=170 kg), up 3.8 per cent from last year’s 33.9 million bales.

Higher production of pulses and oilseeds should help the government control food inflation

as imports will either remain stagnant or rise marginally. Food inflation, which rose to 6.10

per cent in August in terms of wholesale price index from 5.8 per cent in the previous month,

was one of the main reasons that forced the Reserve Bank of India (RBI) to increase the repo

rate by 0.25 percentage points.

The record production of foodgrain in the past few years has given confidence to the policy

makers to roll out the ambitious food security Bill.

110

111

AGRICULTURAL / FOOD PRICES

Onion prices may ease soon as south India crop hits market: Government (ET: 3.9.13)

Onion prices, which continue to rule at an unaffordable level of Rs 60-70 per kg, are expected

to cool down in the coming days as new crop from south India has started hitting the market,

the government said today.

Since the last one and half months, retail price of onion skyrocketed upto Rs 80 per kg in

most parts of the country, affecting consumer budget and forcing the government to curb

exports and allow imports.

Asked when the prices would ease, Agriculture Secretary Ashish Bahuguna said: "New crop

of onion from Andhra Pradesh and Karnataka has started arriving in the markets. Once the

arrivals increase the prices will cool down in coming days."

However, the difference between the wholesale and retail price of onion is huge and retailers

need to sell keeping a limited margin, he said on the sidelines of an ICAR event.

Karnataka and Andhra Pradesh together produce in the range of 38-40 lakh tonnes in a year,

while the country's total output is estimated at 166.55 lakh tonnes in 2012-13.

According to the official data, arrival of onion in wholesale mandi has increased almost three

times to 30,000 tonnes in Bengaluru and 10,000 tonnes in Hyderabad, respectively, in the last

one month.

Bahuguna said the arrivals are expected to increase from South India in the coming days and

its supplies to consuming states will check prices of the vegetable.

In the national capital, wholesale prices of onion have firmed up by Rs 5 per kg to Rs 45-50

per kg as supplies have come down in the last few days. However, the situation is expected to

improve with higher supplies coming from growing states.

To provide relief to consumers, cooperative Nafed has been selling onions at lower price

through its five outlets and mobile vans in Delhi. Onion prices at Lasalgaon (Maharashtra),

Asia's biggest onion market, have risen by Rs 3 per kg to Rs 43 per kg today due to lower

arrivals, the official data showed.

Onion prices will come down in 15-20 days: Government (ET: 7.9.13)

Giving a message of hope to consumers, government today said onion prices will come down

in the next 15-20 days with the arrival of new crops from various southern states.

"The prices of onion will come down in 15-20 days. New produce will come into markets

from Karnataka and Andhra Pradesh," Food and Consumer Affairs Minister K V Thomas

said, replying to a short-duration discussion on the abnormal rise in the prices of onion and

other essential commodities.

112

Admitting that onion price normally goes up during the July-October lean period, he said

during the Rabi season of March-June, 60 per cent of the country's total onion is produced.

The rest is produced during the Kharif season of October- December and late Kharif season

of January-March period.

Thomas said in discussion with states, effective steps are taken each year to tide over the gap

between the demand and supply of onion and control the price.

Admitting that hoarding takes place, he said states including Gujarat, Andhra Pradesh and

Uttar Pradesh have arrested such unscrupulous traders under the the Essential Commodities

Act.

Grains and sugar prices steady at wholesale centres (ET: 10.9.13)

As per data monitored by theministry of consumer affairs and food, prices of grains and sugar

during the week August 29 to 05 September, 2013 remained steady across the country. Price

Monitoring cell of the Ministry regular monitors prices of twenty two essential commodities

at 55 market centers.

During the period prices of rice remained steady at all reporting centers and decreased at

three centers which were Jammu, Nagpur and Thiruvananthapuram. Prices of wheat also

remained steady at most of the centers and decreased at one center, Mumbai.

Prices of Sugar remained steady at all the reporting centers and decreased at two centers

which are Mumbai and Bhubaneswar.

Prices of twenty two essential commodities are regularly monitored by department of

consumer affairs for taking suitable action to keep the prices under check. These commodities

include rice, wheat, atta, gram dal, tur (Arhar ) dal, urad dal, moong dal,

masur dal, sugar, gur, groundnut oil, mustard oil, vanaspati, sunflower oil, soya oil, palm oil,

tea, milk, potato, onion and salt.

Price datas are collected on daily basis from the State Civil Supplies Departments of the

respective state governments.

CPI inflation 9.5% in August: Govt (BS 13.9.13)

Food prices for consumers also eased to an annual 11% in August

The annual consumer price inflation eased marginally in August to 9.52% in line with

expectations from 9.64 in July, government data showed on Thursday.

Food prices for consumers also eased to an annual 11.06% in August from 11.24% in July.

113

A Reuters poll published this week forecast that consumer inflation would ease marginally to

9.55% year-on-year in August.

Unlike most central banks, the Reserve Bank of India mainly uses the wholesale price index

(WPI) for setting its monetary policy. August WPI data is due to be released on Monday.

Aug WPI inflation at 6-month high of 6.1% (BS 16.9.13)

Food prices soar 18%; June WPI inflation revised to 5.16% from 4.86%.

WPI inflation rose at the fastest pace for six months in August, driven by an 18% jump in

food prices, a reminder of the economic pressure new central bank governor Raghuram Rajan

faces ahead of his first policy meeting this week.

The Wholesale Price Index (WPI) based inflation rose to a six-month high of 6.1% in August

against 5.79 in July, according to the data released by Ministry of Commerce and Industry

today.

The build up inflation rate in the financial year so far was 3.91% compared to a build up rate

of 4.35% in the corresponding period of 2012-13.

Food inflation stood at a massive 18.18% in August against 11.91% in July. The inflation in

vegetables soared to 77.81% in August against 46.59% in the previous month. Onion prices

rose by a mammoth 244.62% against 144.94%.

The inflation for manufactured products eased to 1.90% against 2.81% in July. Experts say

that this indicates low demand in the economy.

Inflation in fuel and power rose marginally to 11.34% in August from 11.31% in the previous

month.

The Consumer Price Index (CPI)-based inflation, which measures retail inflation, had

softened to 9.52% in August from 9.64% a month ago.

The reading for June was revised to 5.16% from 4.86%, data released by the Ministry of

Commerce and Industry showed.

India's new central bank chief Raghuram Rajan will detail his first mid-quarter monetary

policy review on Friday and this is the last data before its announcement.

Highlights:

Food articles inflation at 18.18% vs 11.91% m-o-m; Primary articles inflation at 11.72% vs

8.99% m-o-m; Manufactured products inflation 1.90% vs 2.81% m-o-m; Fuel and power

group inflation 11.34% vs 11.31% m-o-m.

114

Month Aug12 Sep12 Oct12 Nov12 Dec12 Jan13 Feb13 Mar13 Apr13 May13 June13 July13 Aug13

Wholesale

Inflation

(%)

8.01 8.07 7.32 7.24 7.31 7.31 7.28 5.65 4.77 4.58 5.16 5.79 6.1

Onions drive WPI inflation to 6-month high (BS: 17.9.13)

Food inflation in Aug at 3-year high; RBI unlikely to ease rates at review later this week, say

economists

Inflation, in onions rocketed to 244.6 per cent in August against an already high 119.4 per

cent in the previous month, jacking up the rate of wholesale price rise to a six-month high of

6.1 per cent from 5.8 per cent in July, official data showed on Monday.

According to data released last week, retail price inflation had softened to 9.52 per cent in

August against 9.64 per cent a month before.

Ironically, onion prices can't be brought down by interest rate policy but seems set to desist

new Reserve Bank governor Raghuram Rajan from easing the central bank’s monetary stance

in its mid-quarter review later this month, even as economic growth crashed to a four-year

low of 4.4 per cent in the first quarter of 2013-14, economists said.

On the other hand, inflation in manufactured products further fell to 1.9 per cent from 2.81

per cent, despite depreciation of the rupee increasing imported inflation. This

showed that demand in the Indian and global economy remained subdued. Fuel inflation

inched up to 11.34 per cent from 11.31 per cent, even as the government raised petrol prices

by 70p a litre and diesel by 50p a litre from midnight of July 31.

At a time when agriculture is the primary hope in the economy, food inflation surged to a

three-year high of 18.2 per cent in August against 11.9 per cent in July. The culprit was

mainly vegetables and within that, onions. Inflation in onions remained over 90 per cent in

2013 till August. At this time last year, onions prices fell 21 per cent, which could also be a

reason for magnifying the rate of price rise in August.

It is not that every item in food saw a rise in inflation. Cereals, both rice and wheat, saw a

decline in the rate of price rise. Even then, cereal inflation was at an elevated level,

particularly rice. Inflation in cereals fell to 14.35 per cent from 17.66 per cent. The rate of

price rise in rice declined to 20.13 per cent from 21.15 per cent, while wheat saw a steep fall

to 6.33 per cent from 13.42 per cent.

Prices of pulses declined for a successive month and the rate of decline accelerated to 14.4

per cent against 7.39 per cent earlier.

However, other protein-based items saw a rise in inflation. Egg, meat and fish inflation

increased to 18.86 per cent from 10.94 per cent and milk saw it rising to 5.63 per cent from

2.35 per cent.

115

“We have not been able to control inflation so far and it has seen an upward trend in past few

months. Inflation primarily rose due to a rise in food articles,” said Madan Sabnavis, chief

economist, CARE Ratings.

This has further boosted expectations that Rajan might not be able to cut rates at his review

on Friday. Siddharth Shankar of financial information firm KASSA said, “Food inflation has

risen majorly and the whole number has risen because of this. Overall numbers would not let

RBI cut rates but food-led inflation is not monetary policy- dependent.”

The core inflation (manufactured items sans food articles) fell further to 1.9 per cent in

August from 2.3 per cent. The low rate of price rise in manufactured items and core inflation

should have been ideal conditions for RBI to cut rates but the party is being spoilt by food

articles.

"Interest rate cuts have been off the table for several months now and with the rupee still

vulnerable and inflation now rising, there is an outside chance of a near-term rate rise," said

Moody's Analytics, a research and analysis wing of Moody's Group. It said interest rates

would remain on hold across the medium term.

Moody's said WPI inflation might hold in the range of six to seven per cent for the remaining

part of the year. RBI had said it would make all efforts to ease inflation to five per cent by

March 2014.

Food prices rise 157 per cent, vegetable prices up 350 per cent between 2004 and 2013

(ET: 20.9.13)

If you were to ask any random aam aadmi anywhere in India what is the single biggest failing

of the UPA, the answer would be - price rise. This is so because the most important items of

family spending - food items - have relentlessly risen for the past several years despite

repeated promises to bring them down by the economic mandarins

and policy wonks that run the country's economy. Poorer families have had to stop eating

various foods in order to save crumbling family budgets.

Between 2004 and 2013 food prices in general rose by 157 per cent. But when you get into

the nuts and bolts the real pain becomes starkly clear. India is the second largest producer of

vegetables in the world. Yet chronic supply shortages coupled with serial hoarding has led

vegetable prices to shoot up by a deadly 350 per cent in that period.

Onion prices have increased by an incredible 521 per cent since 2004. And it's not a smooth

even rise. There were times when onion prices doubled, even tripled within weeks and then

subsided after a few weeks of rampage. This happened in the winter of 2010-11. And it is

happening again now with onion prices touching Rs 70-80 levels in most parts of the country.

This has happened with other key staples also like potatoes. In the second half of 2009 potato

prices zoomed up by almost 100 per cent and it was only in January 2010 that the levels came

down. Other vegetables have followed their own mad ways - brinjal for instance is 311 per

116

cent costlier now than in 2004, and prices of the lowly cabbage have risen by a jaw dropping

714 per cent. Various vegetable prices are in fact at all time highs.

The hike in vegetable prices hit poorer families especially hard because earlier, starting 2006,

another staple of families had been knocked out of thalis. This was pulses, the single biggest

source of protein in largely vegetarian India. Their prices rose steadily 2005 onwards and by

2010 they had more than doubled. Then again they increased in 2012 and reached an all time

high in September last year. There has been a slight decline since then but even then prices

are 123 per cent higher than 2004.

Inflation may be higher than projected: RBI (BS 20.9.13)

WPI inflation in July and August moved out of the RBI's comfort zone and stood at 5.8% and

6.1% respectively

The Reserve Bank of India in its mid-term policy review stated that inflation will be higher

than the initial forecast.

The central bank said that in absence of an appropriate policy reform wholesale price index

(WPI)-based inflation will remain higher for the rest of the year.

"WPI inflation, which had eased in Q1 of 2013-14, has started rising again as the pass-

through of fuel price increases has been compounded by the sharp depreciation of the rupee

and rising international commodity prices", the central bank said.

The WPI inflation in July and August moved out of the RBI's comfort zone of 5% and stood

at 5.8% and 6.1% respectively. In the first quarter, the inflation remained sub-5% in all the

months.

The central bank also raised concern on the retail inflation, which it said has been increasing

since few years and which in turn has led to a lackluster confidence among investors.

"What is equally worrisome is that inflation at the retail level, measured by the Consumer

Price Index, has been high for a number of years, entrenching inflation expectations at

elevated levels and eroding consumer and business confidence", said RBI.

However, good monsoon may ease some pressure on the retail inflation, the central bank

added.

"Although better prospects of a robust kharif harvest will lead to some moderation in CPI

inflation, there is no room for complacency," it added.

The Prime Minister's Economic Advisory Council (PMEAC) had in its economic outlook last

week pegged the WPI-based inflation for this year to be at 5.5% against RBI's projection of

5%.

117

CPI for agri, rural labourers up in Aug (BL: 23.9.13)

Rising for the eighth straight month, inflation based on consumer price index for agricultural

and rural labourers went up to 13.21 per cent and 12.89 per cent in August, due to high prices

of onion, pulses and fruits.

The point to point rate inflation based on the CPI-AL and CPI-RL increased from 12.80 per

cent and 12.61 per cent in July 2013 to 13.21 per cent and 12.89 per cent in August 2013.

Meanwhile, inflation based on food index of CPI-AL and CPI-RL stood at 14.22 per cent and

14.02 per cent, respectively during the month.

The index recorded increase between 5 points and 20 points in all the 20 states.

Karnataka topped the chart with 831 points and Tripura at the bottom with index level of 624

in case rural labourers.

Punjab registered the maximum increase of 21 points for agricultural labourers and Gujarat

state registered the maximum increase of 20 points for rural labourers, mainly due to increase

in the prices of rice, jowar, pulses, onion, vegetables and fruits, gur, firewood and shirting

cloth cotton mill.

118

119

AGRICULTURAL FUTURES/ PRICES

Chana futures trade up on spot demand (ET 26.8.13)

Chana prices inched up by 0.12 per cent to Rs 3,212 per quintal in futures trading today as

speculators created fresh positions supported by a better demand in the spot market.

Restricted arrivals in the physical market also influenced the market sentiment.

At the National Commodity and Derivatives Exchange, chana for delivery in October traded

higher by Rs 4, or 0.12 per cent to Rs 3,212 per quintal in an open interest of 82,520 lots.

Similarly, chana for September contract rose by Re 1, or 0.03 per cent to Rs 3,137 per quintal

in 1,32,630 lots.

Traders said speculators created fresh positions, supported by a mild demand in the spot

market following festive season, helped chana prices to trade marginally higher at futures

trade.

Maize firms up marginally to Rs. 13,438/ton: USGC (BS: 26.8.13)

Maize prices up by 0.7% , higher than last year by 9.6%

Even as the sowing area for maize has increased, its prices have marginally firmed up during

the last week to a pan-India average of Rs 13,438 per tonne from the previous week, mainly

due to reports of crop damage in some parts of the country, according to US Grains Council.

"Maize prices were up by 0.7% to Rs 13,438 per tonne, higher than last year by 9.6%. Prices

have been strong despite an increase in the sowing area and higher production is expected.

However, there are reports of some damage from some parts of the country," USGCIndia

Representative Amit Sachdev said.

It is still too early to speculate if the excess rains and flooding in some parts will affect the

productivity at large, he added.

Prices increased in Gujarat by 1.59% to Rs 14,532 per tonne, Karnataka by 6.26% to Rs

13,655 per tonne, Rajasthan by 0.72% and Uttar Pradesh by 5.62%.

However, prices declined in Andhra Pradesh by 4.09% to Rs 12,526 per tonne, Maharashtra

by 1% to Rs 14,508 per tonne and Tamil Nadu by 5.65% to Rs 14,864 per tonne.

On the future markets all maize contracts closed higher than last week. In the spot prices

were firm, including Davangere, by 1.84% at Rs 15,175 per tonne, Karimnagar by 0.42% at

Rs 14,850 per tonne and Sangli by 3.90% at Rs 16,555 per tonne.

Prices in other markets were down, Nizamabad down 0.14% at Rs 14,913 per tonne and

Gulabbagh by 1.62% at Rs 13,650 per tonne.

120

"There have been reports about some bad quality maize from Bihar, which has led to little

increase in demand of pearl millet triggering some increase in price," Sachdev said.

Globally, there is going to be ample amount of corn in the market and this could keep the

prices down, Sachdev said, adding that it would depend on several factors, including Chinese

buying.

Chana falls by 1.2% on increased supply, weak demand (BS: 27.8.13)

Offloading of positions by speculators at the spot market affected prices

Chana prices fell by 1.23% to Rs 3,137 per quintal in futures trading today as speculators

trimmed their positions, tracking a weak trend at spot market on subdued demand against

increased supplies.

At the National Commodity and Derivatives Exchange, chana for delivery in September fell

by Rs 39, or 1.23% to Rs 3,137 per quintal with an open interest of 1,33,850 lots.

Similarly, the commodity for delivery in October traded lower by Rs 31, or 0.96% to Rs

3,214 per quintal in 86,340 lots.

Analysts said offloading of positions by speculators due to a weak trend at spot market on

subdued demand against increased supplies from producing regions mainly kept pressure on

chana prices at futures trade.

Potato down 2.6% on increased supply (BS: 30.8.13)

Potato for delivery in far month of March also declined by 0.9%

Potato prices dropped by 2.64% to Rs 766.10 per quintal in futures trade today as speculators

offloaded their positions due to weak demand in the spot market.

At the Multi Commodity Exchange, potato for delivery in September month dropped by Rs

20.80, or 2.64% to Rs 766.10 per quintal in business turnover of 77 lots.

The potato for delivery in far month of March also declined by Rs 7.70, or 0.96% to Rs

818.50 per quintal in 11 lots.

Market analysts said offloading of positions by speculators owing to weak demand in the spot

market against increased supplies from producing region mainly pulled down potato prices at

futures trade.

Maize prices in India show mixed trends: USGC (BS: 1.9.13)

Overall, on pan India average basis maize prices last week were at Rs 13,312 per tonne

Maize prices in India are showing a mixed trend and the average rate last week was Rs

13,312 per tonne, higher than last year by five%, according to US Grains Council (USGC).

121

"Prices in India were mixed. Last one week seems to be good for maize crop or for that

matter all the standing crops as it did not rain much. Whatever damage, it was being seen

limited for the corn crop. Overall, on pan India average basis maize prices last week were at

Rs 13,312 per tonne, higher than last year by 5%," USGC India Representative Amit Sachdev

said in a report.

Prices in some of the key markets were up. In Andhra Pradesh it was up by 3.37% at Rs

12,948 per tonnes, Karnataka 5.46% at Rs 14,400 per tonnes and Maharashtra 5.82% at Rs

15,358 per tonnes.

Markets where prices were down include, Gujarat, down by 3.64% at Rs 14,003 per tonne,

Rajasthan 1% at Rs 14,037 per tonne, Tamil Nadu 0.56% at Rs 14,781 per tonne and Uttar

Pradesh 0.5% at Rs 14,070 per tonne.

The average maize price was higher by 7.39% in August at Rs 13,324 per tonne compared to

the same month last year.

However, in the futures market the prices were trading higher due to anticipated damage to

the crop due to heavy monsoon and the depreciating rupee.

The September contract was up 2.82% at Rs 13,810 per tonne, October up 3.49% at Rs

13,020 per tonne and November up 3.93% at Rs 12,950 per tonne.

Spot markets showed mixed trends, in Nizamabad and Karimnagar at Andhra Pradesh it was

up 2.78% and 0.33% to Rs 15,329 per tonne and Rs 14,900 per per tonne, respectively.

Refined soya gains 2.1% on strong demand (BS: 3.9.13)

Strong demand in the spot markets mainly influenced refined soya prices

Refined soya oil prices rose 2.14% to Rs 694.80 per 10 kg in futures trade today as

speculators enlarged their positions, driven by strong demand in the spot market against tight

supplies from producing regions.

At the National Commodity and Derivatives Exchange, refined soya oil for delivery in

October rose by Rs 14.55, or 2.14% to Rs 694.80 per 10 kg with an open interest of 87,120

lots.

Similarly, the oil for delivery in September moved up by Rs 12.65, or 1.82% to Rs 707.50 per

10 kg in 59,850 lots.

Market analysts said strong demand in the spot markets mainly influenced refined soya prices

at futures trade here.

Soybean up by 3.4% on global cues (BS 4.9.13)

Rise in other edible oils prices too brought the upsurge in soybean prices

122

Soyabean prices rose by Rs 117.50 to Rs 3,557.50 per quintal in futures trade today following

brisk buying by traders driven by firm overseas markets cues.

Marketmen said tracking higher global markets sentiment, traders preferred to enlarge their

holdings. Rise in other edible oils prices too brought the upsurge in soybean prices, they said.

At the National Commodity and Derivatives Exchange, soybean prices for most active

November month hardened by Rs 117.50, or 3.42% to Rs 3,557.50 per quintal, with an open

interest of 1,21,090 lots.

Similarly, October month rose by Rs 110.50, or 3.22% to Rs 3,537 per quintal, having an

open interest of 96,080 lots.

Barley down 1.7% on increased selling (BS: 4.9.13)

September contracts slipped by 1.6%

Barley prices fell by Rs 24.50 to Rs 1,365 per quintal in future trading today on increased

selling by traders driven by weak physical markets sentiment.

Marketmen said accelerating supply and fall in demand at existing higher levels in spot

markets mainly put weight on futures prices of barley.

Fall in demand from beer and cattle feed making industries also support the downtrend, they

said.

At the National Commodity and Derivatives Exchange, barley for near October dropped by

Rs 24.50, or 1.76% at Rs 1,365 per quintal in an open interest of 14,170 lots.

September contracts also slipped by Rs 22.50, or 1.66% to Rs 1,335 per quintal, showing an

open interest of 10,570 lots.

Crude palm oil prices fall 1.6% on profit-booking (BS: 4.9.13)

Palm oil for delivery in September traded lower by 1.37%

Crude palm oil prices fell by 1.69% to Rs 551 per 10 kg in futures market today as

speculators booked profits at prevailing higher levels, driven by sluggish demand in the spot

market.

At the Multi Commodity Exchange, crude palm oil for delivery in October fell by Rs 9.50, or

1.69% to Rs 551 per 10 kg in business turnover of 43 lots.

Similarly, the oil for delivery in September traded lower by Rs 7.70, or 1.37% to Rs 563.70

per 10 kg in 277 lots.

123

Analysts said profit-booking by speculators at prevailing higher levels and sluggish demand

in the spot market, mainly kept pressure on crude palm oil prices at futures trade.

Crude palm oil declines 2.3% on profit-booking (BS: 10.9.13)

Oil for delivery in September shed 1.61%

Crude palm oil prices declined by 2.34% to Rs 529 per 10 kg in futures trade today on

emergence of profit-booking by speculators and subdued spot demand.

Besides, weak trend in overseas market further fuelled the downtrend in crude palm oil

futures.

At the Multi Commodity Exchange, crude palm oil for delivery in October declined by Rs

12.70, or 2.34%, to Rs 529 per 10 kg, with a business turnover of 362 lots.

Likewise, the oil for delivery in September shed Rs 8.80, or 1.61%, to Rs 535.50 per 10 kg,

with a business turnover of 258 lots.

Traders said besides profit-taking by speculators, subdued spot demand and a weak trend

overseas led to decline in crude palm oil prices at futures market.

In Malaysia, palm oil fell to over two-week low after a drop in crude oil reduced the appeal

of vegetable oils as biofuel feedstock, and as investors waited for government data that may

show that output expanded.

Palm for November delivery fell as much as 1.60% to 2,360 ringgit (USD 722) a metric ton

on the Malaysia Derivatives Exchange, the lowest price for the most-active contract since

Aug. 23.

Chana up 1.1% on high buying activity (BS: 11.9.13)

Chana prices for delivery in October traded higher by 0.84%

Chana prices rose by Rs 33 to Rs 3,028 per quintal in futures trade today as traders enlarged

their holdings on account of good demand in the market.

Restricted arrivals of the commodity in the physical market pushed the prices tracking a pick-

up in festival demand.

At the National Commodity and Derivatives Exchange, chana for delivery in September rose

by Rs 33, or 1.10%, to Rs 3,028 per quintal, with an open interest of 31,520 lots.

Similarly, chana prices for delivery in October traded higher by Rs 26, or 0.84%, to Rs 3,118

per quintal, with an open interest of 1,39,320 lots.

Traders said speculators increasing their holdings on hopes of rise in spot market demand against restricted arrivals of the commodity in the physical market.

124

They said, fresh enquiries from millers at lower levels against fall in supply from the

producing regions of Rajasthan and Madhya Pradesh further supported the uptrend.

Mustard seed up 1.7% on short covering (BS: 12.9.13)

The commodity for January climbed up by 1.53%

Mustard-seed prices improved by Rs 61 to Rs 3,501 per quintal in futures trade today on

revival of buying driven by firm spot markets sentiment.

Market men said apart from low levels buying, higher millers demand against restricted

supply mainly pushed up the prices.

They said strong demand from vanaspati and other edible oil mills also attracted traders to

raise holdings.

At the National Commodity and derivatives Exchange, mustard seed for current September

contract rose by Rs 61, or 1.77%, to Rs 3,501 per quintal, in an open interest of 5,730 lots.

The commodity for January climbed up by Rs 55, or 1.53%, to Rs 3,659 per quintal with an

open interest of 380 lots.

Most active October month too hardened by Rs 23, or 0.65%, to Rs 3,543 per quintal, having

an open interest of 50,400 lots.

Chana up 1.8% on better spot demand (BS: 12.9.13)

The commodity for delivery in October gained 1.57%

Chana prices rose by Rs 56 to Rs 3,060 per quintal in futures trade today as speculators

enlarged their positions on higher demand in the spot market.

At the National Commodity Derivatives Exchange, chana for September contract rose by Rs

56, or 1.86%, to Rs 3,060 per quintal, with an open interest of 10,090 lots.

Similarly, the commodity for delivery in October gained Rs 49, or 1.57%, to Rs 3,159 per

quintal, with an open interest of 1,51,490 lots.

Traders said speculators increasing their holdings on hopes of rise in spot market demand

against restricted arrivals mainly pushed up chana prices in futures.

They said fresh enquiries from millers at lower levels against fall in supply from the

producing regions of Rajasthan and Madhya Pradesh further supported the uptrend.

Maize down 2.4% on selling pressure (BS: 13.9.13)

Lower trend in overseas markets dampened the trading sentiments

125

Maize prices softened by Rs 33 to Rs 1,313 per quintal in futures trade today following

selling pressure in line with weak physical markets sentiment.

Market men said increased selling by traders in line with arrivals of new crops amid reduced

off take in physical markets mainly led the fall in futures prices.

Lower trend in overseas markets also dampened the trading sentiments, they said.

At the National Commodity and Derivatives Exchange, maize prices for September contract

fell by Rs 33, or 2.45%, to Rs 1,313 per quintal, with an open interest of 1,630 lots.

Barley prices improve by 1.1% on short covering (BS: 17.9.13)

September month contract improved by 0.76%

Barley prices rose by Rs 15.50 to Rs 1,339 per quintal in future trading today following low

levels buying in tandem with firm overseas cue.

Market men said tracking firm overseas markets sentiment, traders preferred to create fresh

positions.

At the National Commodity and Derivatives Exchange, barley prices for November contract

rose by Rs 15.50, or 1.17% to Rs 1,339 per quintal, with an open interest of 2,020 lots.

September month contract improved by Rs 9.50, or 0.76%, to Rs 1,260 per quintal, with an

open interest of 670 lots.

Most active near October month contract also gained Rs 3.50, or 0.27% to Rs 1,292 per

quintal in 17,140 lots.

Maize prices slightly up by 0.8% at Rs 13,524 per ton: USGC (BS: 18.9.13)

Higher price trend prevails as it is the fag end of the market season 2012-13

Maize prices during last week moved up marginally on pan-India average by 0.8% to Rs

13,524 per tonne as the supply is limited and the demand remains strong, the US Grains

Council said.

"Corn prices moved up slightly during last week on pan- India average by 0.8% to Rs 13,524

per tonne and higher than last year by 8.3%," USGC India representative Amit Sachdev said.

This higher price trend prevails as it is the fag end of the market season 2012-13 and hence

the market is somewhat higher as the supply is limited and the demand remains strong, he

pointed out.

End-users, he said, are waiting for the new crop to arrive, which is somewhat delayed due to

late rains in key production centre.

Prices were reported higher in Andhra Pradesh by 2.38% at Rs 13,266 per tonne, Gujarat by

126

4.6% at Rs 14,847 per tonne, Karnataka by 2.73% at Rs 14,196 per tonne and Tamil Nadu by

1.09% at Rs 15,008 per tonne.

In some of the centre prices were down, specially in Madhya Pradesh where it declined by

4.57% to Rs 13,616 per tonne, Maharashtra by 2.7% to Rs 15,106 per tonne, Rajasthan by

3.46% to Rs 13,967 and Uttar Pradesh by 1.78% to Rs 13,389 per tonne.

Globally, market in the US was very volatile and the old crop prices closed lower.

Meanwhile, in other coarse cereals, pearl millet prices were down 3.6% to Rs 12,809 per

tonne, higher than last year by 3.2%.

Sorghum prices were up by 9.5% to Rs 16,065 per tonne and down 4.7% against last year

prices at the same time.

Barley prices moved up by 1.2% to Rs 11,966 per tonne at the market yard, higher than last

year by 7.8%.

Chana down 0.8% on supply pressure (BS: 19.9.13)

The commodity for delivery in September lost 0.66%

Chana prices fell by 0.83% to Rs 3,102 per quintal in futures market today on increased

supplies from producing regions against subdued demand in the spot market.

Expectations of higher output this season also put pressure on chana prices at futures trade.

At the National Commodity and Derivatives Exchange, chana for delivery in October fell by

Rs 26 or 0.83% to Rs 3102 per quintal with an open interest of 157900 lots.

Similarly, the commodity for delivery in September lost Rs 20, or 0.66% to Rs 3023 per

quintal in 2620 lots.

Market analysts said sluggish demand in spot market against increased supplies from

producing regions mainly pulled down the chana prices at futures trading.

Refined soya futures decline on weak demand (BS: 19.9.13)

Weak demand in the spot market against adequate position led to decline

Refined soya oil prices declined by 0.68% to Rs 655.40 per 10 kg in futures trading today as

speculators trimmed their positions,driven by a weak demand in the spot market against

adequate stocks position.

At the National Commodity and Derivatives Exchange, refined soya oil for delivery in

October moved down by Rs 4.50 or 0.68% to Rs 655.40 per 10 kg with an open interest of

64950 lots.

127

Similarly, the oil for delivery in September shed Rs 6, or 0.21% to Rs 671 per 10 kg in 34890

lots.

Analysts said speculators trimmed their positions, driven by a weak demand in the spot

market against adequate position mainly led to decline in refined soya oil prices at futures

trade.

Sugar down 0.7% in futures trade on higher supply (BS: 19.9.13)

Sugar for delivery in October fell by 0.21%

Sugar prices moved down by 0.78% to Rs 2,925 per quintal in futures trading today as

speculators offloaded their positions on expectations of higher supplies from producing areas.

At the National Commodity and Derivatives Exchange, sugar for delivery in September fell

by Rs 23 or 0.78% to Rs 2925 per quintal in open interest of 1750 lots.

Similarly, sugar for delivery in October fell by Rs 6 or 0.21% to Rs 2920 per quintal in

10,390 lots.

Market analysts said speculators offloading their positions on expectated higher supplies

from producing areas mainly kept pressure on sugar prices at futures trade.

Crude palm oil down 0.7% on profit-booking, global cues (BS : 23.9.13)

Palm oil for delivery in September down by 0.5%

Crude palm oil prices declined by 0.73% to Rs 515.50 per 10 kg in futures trade today on

emergence of profit-booking by speculators amid subdued spot demand.

Weak trend in overseas market further fuelled the downtrend in crude palm oil futures.

At the Multi Commodity Exchange, crude palm oil for delivery in October declined by Rs

3.80, or 0.73%, to Rs 515.50 per 10 kg, with a business turnover of 141 lots.

Likewise, the oil for delivery in September shed Rs 2.70, or 0.50%, to Rs 526.80 per 10 kg,

with a business turnover of 151 lots.

Traders said besides profit-taking by speculators, subdued demand and a weak overseas

trend, on speculation that inventories will climb in top growers like Indonesia and Malaysia

as production accelerated second half because of growing cycles, led to decline in crude palm

oil prices at futures market.

Meanwhile, the contract for delivery in December lost as much as 0.90% to 2,279 ringgit

(USD 718) a tonne on the Bursa Malaysia Derivatives Exchange, the lowest price for the

most-active contract since August 14.

Chana trade higher by 0.7% on high buying activity (BS: 23.9.13)

Chana prices for delivery in October traded higher by 0.62%

128

Chana rose by Rs 25 to Rs 3,151 per quintal in futures trade today as traders enlarged their

holdings on account of the good 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 25, or 0.79%, to Rs 3,151 per quintal, with an open interest of 77,710 lots.

Similarly, chana prices for delivery in October traded higher by Rs 19, or 0.62%, to Rs 3,062

per quintal, with an open interest of 1,58,560 lots.

Traders said speculators increasing their holdings on hopes of rise in spot market demand

against restricted arrivals of the commodity in the physical market.

Refined soya up 1.3% on upsurge in spot demand (BS: 23.9.13)

Oil for delivery in November moved up by 0.98%

Refined soya oil gained 1.31% to Rs 662 per 10 kg in futures trade today on speculators

buying driven by upsurge in demand in the spot market.

At the National Commodity and Derivatives Exchange, refined soya oil for delivery in

October month gained Rs 8.65, or 1.31%, to Rs 662 per 10 kg with an open interest of 64,670

lots.

Similarly, the oil for delivery in November moved up by Rs 6.45, or 0.98% to Rs 661.50 per

10 kg in 61,300 lots.

Analysts said speculators enlarged their positions on the back of upsurge in demand in the

spot market mainly led to rise in refined soya oil prices at futures trade.