Onion prices continue to rule at high levels in metros across the country, where the staple vegetable is being sold for Rs 40-65/kg, depending on the quality.
Onion prices stood at Rs 40-50 per kg in the retail markets of the national capital, Mumbai and Kolkata today, but the commodity was dearer in Chennai, at Rs 60-65 per kg, according to reports from these centres.
Traders in Delhi's Azadpur mandi said onion prices are unlikely to witness a sharp fall before the arrival of fresh crops, which is expected to begin by the middle of this month.
The supply of onions from Rajasthan to Delhi has been low due to higher retail prices in Jaipur and other cities in the state vis-a-vis the national capital, they said, adding that the Gujjar agitation has also affected supply.
In order to provide relief to consumers, the Centre plans to sell imported onions in retail markets through outlets of Mother Dairy.
State-owned trading agencies PEC and STC have entered agreements for the import of 1,000 tonnes of onions from Pakistan and these would start coming to India this week, sources had said yesterday.
On December 20-21, onion prices had skyrocketed to Rs 70-85/kg in major cities from Rs 30-35 in early December due to crop damage in the key growing states of Maharashtra and Karnataka on account of abnormal rainfall.
The Centre had banned onion exports and abolished import duty to boost domestic supply and curb rising onion prices, which helped bring down the prices to some extent. However, they are still quite high.
According to government data, onion retail prices stood at Rs 52/kg in Delhi and Mumbai, Rs 50/kg in Chennai and Rs 40/kg in Kolkata on December 31, 2010.-PTI
Showing posts with label Agriculture. Show all posts
Showing posts with label Agriculture. Show all posts
January 2, 2011
60% duty on sugar imports from 1st January 2011
With India's sugar production set to exceed domestic demand, the government has decided the zero duty regime on sugar imports to lapse, which in effect will restore 60% duty on the sweetener.
Import duty on sugar was abolished in early 2009 to boost domestic supply as there was a shortfall in output in 2008-09 sugar year (October-September). Before that, the duty on sugar import was 60%.
According to senior government official, there is no need for a fresh notification with the validity of duty-free import notification (on sugar) lapsing on 1st January 2011. It will automatically revert to 60% duty. If required, government can seek a reduction in duty later.
India had imported about six million tonnes of sugar since February 2009 to meet domestic demand. Sugar production of India, the world’s second largest producer, had declined to 147 lakh tonnes in 2008-09 against the annual domestic demand of 230 lakh tonnes. In 2009-10, the production improved to 190 lakh tonnes, but it was still short of demand.
However, in the current sugar year, the production is expected to rise to 245 lakh tonnes and the country has now begun exporting the sweetener. Prices have also softened to Rs.30-Rs.32 per kg from nearly Rs.50 per kg in mid-January.
On sugar exports, the official said the government will notify the procedures for export of five lakh tonnes of sugar under the open general licence (OGL) scheme next week.
Food and agriculture minister Sharad Pawar had announced that the government will allow regular export of five lakh tonnes of sugar to benefit from high global prices. He had also said that the food ministry will work out the export procedures in 10 days.
Import duty on sugar was abolished in early 2009 to boost domestic supply as there was a shortfall in output in 2008-09 sugar year (October-September). Before that, the duty on sugar import was 60%.
According to senior government official, there is no need for a fresh notification with the validity of duty-free import notification (on sugar) lapsing on 1st January 2011. It will automatically revert to 60% duty. If required, government can seek a reduction in duty later.
India had imported about six million tonnes of sugar since February 2009 to meet domestic demand. Sugar production of India, the world’s second largest producer, had declined to 147 lakh tonnes in 2008-09 against the annual domestic demand of 230 lakh tonnes. In 2009-10, the production improved to 190 lakh tonnes, but it was still short of demand.
However, in the current sugar year, the production is expected to rise to 245 lakh tonnes and the country has now begun exporting the sweetener. Prices have also softened to Rs.30-Rs.32 per kg from nearly Rs.50 per kg in mid-January.
On sugar exports, the official said the government will notify the procedures for export of five lakh tonnes of sugar under the open general licence (OGL) scheme next week.
Food and agriculture minister Sharad Pawar had announced that the government will allow regular export of five lakh tonnes of sugar to benefit from high global prices. He had also said that the food ministry will work out the export procedures in 10 days.
January 11, 2010
Sugar prices to remain firm in the year 2009-10
Over the past few days, sugar prices shot up on fall in production and ever increasing demand. Nearing festivals and wedding season has given a boost to the rising prices. Moreover, with the imported raw sugar lying idle at ports as a result of UP government not allowing its mills to process it unless crushing in the state is over, is also making sugar pricier. Mills owners also attribute the rising prices on lower availability of sugar in the market. The Central Government has made available 16.39 lakh tonnes of sugar for the month of January which the market participants feel is not enough to meet the domestic demand. Also, a high international price is also fueling the price rise across the country.
Sugar prices crossed the psychological mark of Rs.40 per kg last week in the retail market. Prices had been firm throughout the year 2008-09 on mismatch of demand and supply. Prices had been ruling over Rs.30 per kg in the retail for the last one year and the consumers are now more or less habited to paying the price. Although, the ministries concerned with the price rise has been ensuring people that every thing would be fine in the coming days, as steps are being taken to ensure that prices do not keep touching new heights. But, the fact is that prices are not expected to come down soon as prices are determined by demand and supply situation. As far as supply is concerned, it may increase in the short term and prices may soften a bit, however, overall production is still estimated to remain around 160 lakh tonnes which is much lower than actual demand for sugar.
According to Food and Agriculture Minister Sharad Pawar, India is expected to produce only 150 to 160 lakh tonnes of sugar in 2009-10 and the present firmness in the sugar price would remain for a year. The estimated production in the year 2008-09 was 145 lakh tonnes.
The rise in production will be mainly because of higher diversion of sugarcane to the mills manufacturing sugar. Last year, apart from monsoon playing havoc on sugar cane production, diversion of sugarcane to the khandsari and gur manufacturers were other factors that supported higher sugar prices. Although, this year the administration has taken some steps in this regard, yet, diversion cannot be ruled out. Farmers sell their crop to khandsari and gur manufacturers as they get instant payment on delivery unlike, in sugar mills, where arrears are paid later after realization of sugar. In October 2009, Venus Sugar Ltd in Uttar Pradesh (UP) had secured a Court order restraining the operation of kolhus (manufacturers of gur) in the cane area assigned to it by the State Government. Further, sugar mills located in Uttar Pradesh are paying around Rs.220 per quintal for cane purchased by them against Centre’s Fair and Remunerative Price of Rs.129 per quintal.
Sugar production in Maharashtra is set to rise marginally this season on higher cane crushing. The state is likely to produce 48 lakh tonnes in the sugar year 2009/10 that began in October, slightly higher from 46 lakh tonnes produced a year ago. Although, the state is expected to crush more sugarcane this year, however, production would rise marginally on fall in the sugar recovery. In the first quarter of the sugar season (October to December) millers have produced 22 lakh tonnes of sugar which is 2.8 percent higher compared to last year’s corresponding figure.
However, production in Uttar Pradesh is expected to remain flat this year due to a number of causes. First, delay in the start of crushing will affect the recovery of sugar in the state. Second, though this time less sugar cane would be diverted towards jaggery manufacturing yet, bad monsoon had already affected the cane production in the state. Third, the UP government ban on imports of raw sugar following protests by farmers who said overseas purchases suppressed cane prices and curtailed their bargaining power with mills has locked up 15 lakh tonnes of raw sugar in ports. As of now mills in Uttar Pradesh, India's second-largest producer churned out 17 lakh tonnes of sugar against 18 lakh tonnes last year in the same period (October to December).
India is expected to consume over 230 lakh tonnes of sugar in 2009-10. The deficit would have to be met by imports and from last year’s buffer stocks. However, India doesn’t have enough buffer stocks {The current 2009-10 season (October-September) opened with domestic white sugar stocks of around 31 lakh tonnes.} to bridge the widening gap between fall in production and expected demand. Even if the country manages to bring some stability in the prices using the stocks that it has with it right now, it would definitely face shortage in the next year as there would be hardly any carry over stocks. Moreover, record global prices do not sound good for Indian consumers who will have to shell out more this year to purchase sugar. Sugar prices have already crossed the Rs.40 per kg in the retail market and the next target for the present Central Government is to watch consumers pay Rs.50 per kg in the coming days.
Sugar prices crossed the psychological mark of Rs.40 per kg last week in the retail market. Prices had been firm throughout the year 2008-09 on mismatch of demand and supply. Prices had been ruling over Rs.30 per kg in the retail for the last one year and the consumers are now more or less habited to paying the price. Although, the ministries concerned with the price rise has been ensuring people that every thing would be fine in the coming days, as steps are being taken to ensure that prices do not keep touching new heights. But, the fact is that prices are not expected to come down soon as prices are determined by demand and supply situation. As far as supply is concerned, it may increase in the short term and prices may soften a bit, however, overall production is still estimated to remain around 160 lakh tonnes which is much lower than actual demand for sugar.
According to Food and Agriculture Minister Sharad Pawar, India is expected to produce only 150 to 160 lakh tonnes of sugar in 2009-10 and the present firmness in the sugar price would remain for a year. The estimated production in the year 2008-09 was 145 lakh tonnes.
The rise in production will be mainly because of higher diversion of sugarcane to the mills manufacturing sugar. Last year, apart from monsoon playing havoc on sugar cane production, diversion of sugarcane to the khandsari and gur manufacturers were other factors that supported higher sugar prices. Although, this year the administration has taken some steps in this regard, yet, diversion cannot be ruled out. Farmers sell their crop to khandsari and gur manufacturers as they get instant payment on delivery unlike, in sugar mills, where arrears are paid later after realization of sugar. In October 2009, Venus Sugar Ltd in Uttar Pradesh (UP) had secured a Court order restraining the operation of kolhus (manufacturers of gur) in the cane area assigned to it by the State Government. Further, sugar mills located in Uttar Pradesh are paying around Rs.220 per quintal for cane purchased by them against Centre’s Fair and Remunerative Price of Rs.129 per quintal.
Sugar production in Maharashtra is set to rise marginally this season on higher cane crushing. The state is likely to produce 48 lakh tonnes in the sugar year 2009/10 that began in October, slightly higher from 46 lakh tonnes produced a year ago. Although, the state is expected to crush more sugarcane this year, however, production would rise marginally on fall in the sugar recovery. In the first quarter of the sugar season (October to December) millers have produced 22 lakh tonnes of sugar which is 2.8 percent higher compared to last year’s corresponding figure.
However, production in Uttar Pradesh is expected to remain flat this year due to a number of causes. First, delay in the start of crushing will affect the recovery of sugar in the state. Second, though this time less sugar cane would be diverted towards jaggery manufacturing yet, bad monsoon had already affected the cane production in the state. Third, the UP government ban on imports of raw sugar following protests by farmers who said overseas purchases suppressed cane prices and curtailed their bargaining power with mills has locked up 15 lakh tonnes of raw sugar in ports. As of now mills in Uttar Pradesh, India's second-largest producer churned out 17 lakh tonnes of sugar against 18 lakh tonnes last year in the same period (October to December).
India is expected to consume over 230 lakh tonnes of sugar in 2009-10. The deficit would have to be met by imports and from last year’s buffer stocks. However, India doesn’t have enough buffer stocks {The current 2009-10 season (October-September) opened with domestic white sugar stocks of around 31 lakh tonnes.} to bridge the widening gap between fall in production and expected demand. Even if the country manages to bring some stability in the prices using the stocks that it has with it right now, it would definitely face shortage in the next year as there would be hardly any carry over stocks. Moreover, record global prices do not sound good for Indian consumers who will have to shell out more this year to purchase sugar. Sugar prices have already crossed the Rs.40 per kg in the retail market and the next target for the present Central Government is to watch consumers pay Rs.50 per kg in the coming days.
December 20, 2009
Agriculture Ministry’s latest Crop Weather Watch Report
According to the Agricultural Ministry latest review of rabi season crop sowing trends, farmers in Punjab have till now planted 33.91 lakh hectares (lh) under wheat, compared with 34.59 lh during the corresponding period of 2008-09.
Similar declines have also been reported from Haryana (24.05 lh versus 24.55 lh) and Rajasthan (16.92 lh versus 17.39 lh). Average yields for a hectare in the three States during 2008-09 – at 4.45 tonnes for Punjab, 4.27 tonnes for Haryana and 3.05 tonnes for Rajasthan – stood higher than the all-India figure of 2.89 tonnes.
Maharashtra (7.43 lh versus 7.70 lh) and Gujarat (7.23 lh versus 8.78 lh), too, have seen a fall in progressive area planted. But the lower coverage in these States have been more than offset by increased sowing in Uttar Pradesh (77.89 lh versus 74.62 lh), Madhya Pradesh (38.36 lh versus 35.04 lh) and Bihar (13.59 lh versus 12.32 lh).
As a result, the overall area sown under wheat, at 231.32 lh, is more than the 226.01 lh achieved during this period of last rabi. But whether this would lead to higher production – the country harvested a record 80.583 million tonnes (mt) last year – is a moot point. The reason for this is that the States with higher coverage this time have lower yields, ranging from 1.72 tonnes in Madhya Pradesh and 2.05 tonnes in Bihar to 3 tonnes in Uttar Pradesh (average for 2008-09). For the current year, the Agriculture Ministry has targeted wheat output at 79 mt.
Madhya Pradesh farmers have brought in extra area not only in wheat, but even under rabi pulses such as gram (31.88 lh versus 27.61 lh), lentil (6.39 lh versus 5.32 lh) and peas (2.59 lh versus 2.47 lh), and oilseeds like rapeseed-mustard (8.87 lh versus 7.82 lh) and linseed (1.74 lh versus 1.45 lh). .
Uttar Pradesh has also reported expanded acreages under rapeseed-mustard (12.94 lh versus 8.53 lh), gram (8.63 lh versus 8.49 lh), lentil (6.42 lh versus 5.97 lh) and barley (2.53 lh versus 1.96 lh), while recording a decline in peas (3.47 lh versus 4.44 lh). Both these States have had a good spell of post-monsoon showers that have significantly bolstered the soil-moisture regime for rabi planting.
In most other States, the overall coverage of rabi crops so far this year is lacklustre relative to last year's levels. This is especially apparent in Rajasthan, the country's main rapeseed-mustard growing State. This time, farmers there have sown only 22.87 lh under the crop, against last year's progressive acreage of 27.62 lh.
Rajasthan has also recorded a decline in area under gram (4.57 lh versus 7.26 lh) and barley (2.49 lh versus 2.94 lh).
Another State that has witnessed lower rabi sowing activity is Karnataka, where area has fallen in sunflower (3.61 lh versus 5.19 lh) and jowar (10.97 lh versus 11.64 lh), while rising for gram (10.85 lh versus 8.34 lh). Maharashtra, too, has registered declines under jowar (28.40 lh versus 32.32 lh), sunflower (1.23 lh versus 1.28 lh) and safflower (1.69 lh versus 1.80 lh), while seeing a rise in gram (9.23 lh versus 8.84 lh).
December 11, 2009
Minimum Support Prices of Various Agriculutral Commodities
@ Upto 2004-05 Statutory Minimum Price (SMP) linked to a basic recovery of 8.5 % with proportionate premium for every 0.1% increase in recovery above that level. The SMP for 2002-03 includes the one time drought relief of Rs. 5 per quintal recommended by CACP. From 2005-06 onwards SMP is linked to basic recovery of 9.0%. Sugarcane SMP is linked to 9.5 per cent and, above that, there would be a premium of Rs.1.13 for every 0.1 percentage point increase.
+ An additional incentive bonuus of Rs. 50 per quintal was payable over the Minimum Support Price(MSP).
++ An additional incentive bonuus of Rs. 100 per quintal was payable over the Minimum Support Price(MSP).
^ Includes Rs.10 special drought relief.
**Includes Rs.20 special drought relief.
-From 12.06.2008
*Medium Staple.
**Long Staple.
& An additional incentive bonus of Rs. 40 per quintal was payable on procurement between 1.10.2006 to 31.03.2007,
In case of Bihar and Kerala additional incentive bonus extended upto 31.5.2007 and in case of Andhra Pradesh, Chhatisgarh, Orissa, Tamil Nadu and West Bengal additional incentive bonus extended upto 30.9.2007.
December 5, 2009
Agriculture Ministry’s latest Crop Weather Watch Report
According to the Agriculture Ministry's latest review of rabi season sowing trends, released on this Friday (04/12/09), so far 167.36 lakh hectares (lh) area has been planted under wheat this year, which is more than the 162.40 lh covered during this period last year.
Much of this increase is, however, on account of M.P., where farmers have stepped up acreage from 15.24 lh to 25.04 lh. On the other hand, wheat area is trailing in the high-yielding granary region of Punjab (31.21 lh versus 33.03 lh), Haryana (21.60 lh versus 22.44 lh) and Rajasthan (9.50 lh versus 10.60 lh).
Cumulative sowing is also lower this time in Uttar Pradesh (60.33 lh versus 62.11 lh) and Gujarat (3.71 lh versus 4.65 lh), while being marginally higher in Maharashtra (3.40 lh versus 3.04 lh), Bihar (2.72 lh versus 2.47 lh) and Karnataka (2.52 lh versus 2.11 lh).
As far as MP is concerned, the excellent spell of post-monsoon showers have seemingly played a part in boosting plantings, whereas in U.P., the delayed harvesting of cane due to standoff between growers and sugar mills – is seen as a reason for lagging wheat coverage.
Farmers in M.P. have responded to the improved soil moisture conditions by not only sowing more wheat, but also bringing more area under rabi pulses such as gram (30.35 lh versus 25 lh), lentil (6.33 lh versus 4.95 lh), peas (2.55 lh versus 2.24 lh), and oilseeds such as rapeseed-mustard (8.85 lh versus 7.61 lh) and linseed (1.72 lh versus 1.39 lh).
UP, too, has reported expanded acreages under rapeseed-mustard (12.79 lh versus 8.45 lh), gram (8.63 lh versus 8.49 lh), lentil (6.42 lh versus 5.97 lh) and barley (1.87 lh versus 1.49 lh), while recording a decline in peas (3.47 lh versus 4.44 lh).
In fact, if one leaves out UP and MP, the overall coverage of rabi crops so far this year would work out lower in most of the states relative to sowing in the corresponding period of last year.
This is especially apparent in Rajasthan that is the country's main rapeseed-mustard growing state. This time, farmers there have sown only 22.22 lh under the crop, against last year's progressive acreage of 27.48 lh. Rajasthan has also seen a decline in area under gram (4.57 lh versus 7.26 lh) and barley (1.95 lh versus 2.47 lh).
Another State that is witnessing lower rabi sowing activity is Karnataka, where area has fallen in sunflower (3.34 lh versus 5.03 lh), safflower (0.59 lh versus 0.62 lh), lentil (1.03 lh versus 1.16 lh) and jowar (10.41 lh versus 11.48 lh), while there was some relief for gram (9.98 lh versus 7.98 lh). Maharashtra, too, has registered declines under jowar (28.20 lh versus 32.32 lh), gram (7.12 lh versus 7.38 lh), sunflower (1.18 lh versus 1.23 lh) and safflower (1.672 lh versus 1.79 lh).
November 24, 2009
Consumers should be ready to pay more for sugar
Distressed at not getting an adequate price for his produce, a debt-ridden sugarcane farmer in Uttar Pradesh committed suicide. In order to repay his loans, he wanted to sell his produce for a minimum of Rs.270 per quintal.
After protests from the farmers and pressures from the opposition over sugar pricing which favored sugar mills, the government has made it clear that the difference between the fair and remunerative price (FRP) and state-advised price (SAP) would have to be paid by the mills and not by state governments.
The government had earlier announced the new sugar pricing policy which was rejected by the farmers. Instead of SMP (statutory minimum price), a Fair and Remunerative Price (FRP) of Rs.129.82 per quintal linked to 9.5 sugar recovery was announced for the current season (2009-10). The guidelines under the new policy also stated that anything above the FRP would be borne by the state government which often announced SAP higher by 30 to 40 per cent than SMP. As a result, SMP of Rs.107 per quintal became meaningless which was announced earlier (Last year SMP was Rs.82.25 per quintal). State Advised Price (SAP) in Uttar Pradesh varies from Rs.165 to Rs.170 per quintal, depending on the quality of sugarcane. In reality, sugar mills pay over SAP to the farmers.
As a result, farmers were not happy as the FRP announced was much below SAP at a time when sugar mills were making huge profits. The farmers protesting against government new move had two demands.
1. Withdraw the provision that makes state liable to pay the difference if it fixes an SAP higher than FRP.
2. Pay farmers a price of Rs.280 per quintal.
Farmers feared that as state would have to pay the differences, it will stop announcing its own SAP because it could not afford to pay the difference. Further, the SAP announced by the UP government was un-remunerative as farmers believed that anything below Rs.250 to Rs.280 per quintal was not fair.
Not happy with the sugar mills offer, sugarcane growers in some some parts of Uttar Pradesh have decided to set-up co-operative crushers and crush their cane themselves. Farmers at the moment are not ready to sell their produce till they are paid Rs.280 per quintal. The deadlock has resulted in slow progress of cane crushing and is likely to affect production.
Over the past few months, the scenario in Indian sugar sector has not been good for the farmers. Sugar prices touched peak often due to faulty government policies and inadequate actions on industry estimates which had been voicing their concerns to the government that production for the season 2008-09 is expected to fall drastically due to bad monsoon. There were also reports that farmers in Maharashtra were converting their standing crop into fodder to feed their cattle and sell the rest on remunerative prices. Further, farmers in Uttar Pradesh were more than eager to sell their produce to jaggery manufacturers who were paying higher prices than sugar mills and that too instantly. All these factors along with government not responding swiftly to minimize the differences in demand-supply allowed sugar mills to make handsome profits.
India’s sugar production is estimated at 16 million tonnes for 2009-10 against 14.7 million tonnes last year, while the estimated total annual consumption is pegged at 23.5 million tonnes. However, last season (2008-09), the government had a carryover stock of 9.5 million tonnes which provided some relief to the sector.
The Union government has taken numerous steps at different times to check the rising prices and though, it helped a bit, yet sugar is currently trading around Rs.40 per kg in the retail market. The government had earlier (this year) allowed the import of raw sugar for refined and domestic consumption against export of refined sugar. Further, to check hoardings, the port charges for storing sugar were raised sharply to force traders to vacate godowns (warehouse) immediately after custom clearance. Also, the Ministry of Consumer Affairs has directed that no bulk consumers whose consumption is more than ten quintals annually could store sugar beyond fifteen days’ requirements in its godowns.
In spite of all these steps, Indian consumers should be ready to pay more for sugar as the commodity is already trading at a peak at a time when prices should be lower. Delay in crushing in northern states should be a warning to the Central government to be more prudent in sugar sector policies.
After protests from the farmers and pressures from the opposition over sugar pricing which favored sugar mills, the government has made it clear that the difference between the fair and remunerative price (FRP) and state-advised price (SAP) would have to be paid by the mills and not by state governments.
The government had earlier announced the new sugar pricing policy which was rejected by the farmers. Instead of SMP (statutory minimum price), a Fair and Remunerative Price (FRP) of Rs.129.82 per quintal linked to 9.5 sugar recovery was announced for the current season (2009-10). The guidelines under the new policy also stated that anything above the FRP would be borne by the state government which often announced SAP higher by 30 to 40 per cent than SMP. As a result, SMP of Rs.107 per quintal became meaningless which was announced earlier (Last year SMP was Rs.82.25 per quintal). State Advised Price (SAP) in Uttar Pradesh varies from Rs.165 to Rs.170 per quintal, depending on the quality of sugarcane. In reality, sugar mills pay over SAP to the farmers.
As a result, farmers were not happy as the FRP announced was much below SAP at a time when sugar mills were making huge profits. The farmers protesting against government new move had two demands.
1. Withdraw the provision that makes state liable to pay the difference if it fixes an SAP higher than FRP.
2. Pay farmers a price of Rs.280 per quintal.
Farmers feared that as state would have to pay the differences, it will stop announcing its own SAP because it could not afford to pay the difference. Further, the SAP announced by the UP government was un-remunerative as farmers believed that anything below Rs.250 to Rs.280 per quintal was not fair.
Not happy with the sugar mills offer, sugarcane growers in some some parts of Uttar Pradesh have decided to set-up co-operative crushers and crush their cane themselves. Farmers at the moment are not ready to sell their produce till they are paid Rs.280 per quintal. The deadlock has resulted in slow progress of cane crushing and is likely to affect production.
Over the past few months, the scenario in Indian sugar sector has not been good for the farmers. Sugar prices touched peak often due to faulty government policies and inadequate actions on industry estimates which had been voicing their concerns to the government that production for the season 2008-09 is expected to fall drastically due to bad monsoon. There were also reports that farmers in Maharashtra were converting their standing crop into fodder to feed their cattle and sell the rest on remunerative prices. Further, farmers in Uttar Pradesh were more than eager to sell their produce to jaggery manufacturers who were paying higher prices than sugar mills and that too instantly. All these factors along with government not responding swiftly to minimize the differences in demand-supply allowed sugar mills to make handsome profits.
India’s sugar production is estimated at 16 million tonnes for 2009-10 against 14.7 million tonnes last year, while the estimated total annual consumption is pegged at 23.5 million tonnes. However, last season (2008-09), the government had a carryover stock of 9.5 million tonnes which provided some relief to the sector.
The Union government has taken numerous steps at different times to check the rising prices and though, it helped a bit, yet sugar is currently trading around Rs.40 per kg in the retail market. The government had earlier (this year) allowed the import of raw sugar for refined and domestic consumption against export of refined sugar. Further, to check hoardings, the port charges for storing sugar were raised sharply to force traders to vacate godowns (warehouse) immediately after custom clearance. Also, the Ministry of Consumer Affairs has directed that no bulk consumers whose consumption is more than ten quintals annually could store sugar beyond fifteen days’ requirements in its godowns.
In spite of all these steps, Indian consumers should be ready to pay more for sugar as the commodity is already trading at a peak at a time when prices should be lower. Delay in crushing in northern states should be a warning to the Central government to be more prudent in sugar sector policies.
November 6, 2009
Minimum Support Price for Rabi Crops Increased
The government has fixed the minimum support price (MSP) of wheat at Rs 1,100 per quintal, an increase of Rs 20, or 1.86 per cent, over last year’s figure. The increase is moderate relative to the Rs 60 to Rs 150 a quintal hikes resorted to in the last few years. The Rs 1,100 price is also lower than the ruling market price of Rs 1,400 a quintal in Delhi.
It had earlier increased the MSP of two paddy varieties by 11-12 per cent, as the output of domestic kharif rice was estimated 18 per cent lower at 69.45 million tonnes (mt). The MSP for Grade-A and common varieties of paddy were increased by Rs 100 a quintal to Rs 980 and Rs 950, respectively. Last week, the government had also announced a bonus of Rs 50 per quintal on both these varieties.
The higher paddy MSP is expected to boost the government’s procurement of rice. However, the situation in wheat is different, since wheat crop is expected to be normal and the government pool has a stock of 28.45 million tonnes as on October 1.
The government also announced MSP for other rabi crops. The MSP for chana has been raised by Rs 30 to Rs 1,760 per quintal while that of of barley has been increased by Rs 70 to Rs 750 per quintal. MSP of mustard and masur have been kept unchanged at Rs 1,830 per quintal and Rs 1,870 per quintal, respectively.
It had earlier increased the MSP of two paddy varieties by 11-12 per cent, as the output of domestic kharif rice was estimated 18 per cent lower at 69.45 million tonnes (mt). The MSP for Grade-A and common varieties of paddy were increased by Rs 100 a quintal to Rs 980 and Rs 950, respectively. Last week, the government had also announced a bonus of Rs 50 per quintal on both these varieties.
The higher paddy MSP is expected to boost the government’s procurement of rice. However, the situation in wheat is different, since wheat crop is expected to be normal and the government pool has a stock of 28.45 million tonnes as on October 1.
The government also announced MSP for other rabi crops. The MSP for chana has been raised by Rs 30 to Rs 1,760 per quintal while that of of barley has been increased by Rs 70 to Rs 750 per quintal. MSP of mustard and masur have been kept unchanged at Rs 1,830 per quintal and Rs 1,870 per quintal, respectively.
October 13, 2009
Government asks sugar mills to sell 20 per cent of output to PDS
The central government on Monday notified its decision to double the amount of sugar purchased from millers for distribution through ration shops in the 2009-10 season to protect the poor against high sweetener prices which have threatened to touch Rs 40 a kg due to a slump in output.
Significantly, mills are not required to sell proceeds from duty-free imported raw or white sugar to the government for supply under the public distribution system (PDS).
Last month, the empowered group of ministers (eGoM) on food had decided to double the quota of levy sugar meant for supply through ration shops of mills to 20 per cent of their total output from October 1.
Also importers of sugar who import duty-free raw sugar for processing into white and refined sugar or import duty-free refined sugar shall not be required to sell levy sugar to the government in respect of such white or refined sugar processed from imported raw sugar or such imported white or refined sugar.
However, the Centre has not yet announced any change in the price of sugar it buys from millers for supply under the public distribution system. Cardholders get sugar through ration shops at Rs 13.50 per kg.
Earlier, the Centre had decided to pay more for sugar it buys from millers from an average of Rs 1,322 a quintal. However, no notification as such has been announced. Sugar price in any case would not be raised for ration card holders as of now. Sugar prices almost doubled in a year on uncertainties over output which slumped to 15 million tonnes in the 2008-09 season from about 26.4 million tonnes a year earlier, significantly denting the country’s reserves.
Prices are still ruling high at about Rs 35 a kg on scepticism over adequate supply this season as well due to less area under the sugarcane crop. Sugar prices climbed on Monday on improvement in festive demand and as most sugar mills will begin crushing behind the schedule due to rains.
India needs about 23-23.5 million tonnes of sugar for annual domestic consumption.
Source:The Economic Times
Significantly, mills are not required to sell proceeds from duty-free imported raw or white sugar to the government for supply under the public distribution system (PDS).
Last month, the empowered group of ministers (eGoM) on food had decided to double the quota of levy sugar meant for supply through ration shops of mills to 20 per cent of their total output from October 1.
Also importers of sugar who import duty-free raw sugar for processing into white and refined sugar or import duty-free refined sugar shall not be required to sell levy sugar to the government in respect of such white or refined sugar processed from imported raw sugar or such imported white or refined sugar.
However, the Centre has not yet announced any change in the price of sugar it buys from millers for supply under the public distribution system. Cardholders get sugar through ration shops at Rs 13.50 per kg.
Earlier, the Centre had decided to pay more for sugar it buys from millers from an average of Rs 1,322 a quintal. However, no notification as such has been announced. Sugar price in any case would not be raised for ration card holders as of now. Sugar prices almost doubled in a year on uncertainties over output which slumped to 15 million tonnes in the 2008-09 season from about 26.4 million tonnes a year earlier, significantly denting the country’s reserves.
Prices are still ruling high at about Rs 35 a kg on scepticism over adequate supply this season as well due to less area under the sugarcane crop. Sugar prices climbed on Monday on improvement in festive demand and as most sugar mills will begin crushing behind the schedule due to rains.
India needs about 23-23.5 million tonnes of sugar for annual domestic consumption.
Source:The Economic Times
September 4, 2009
Indian Government releases 20.45 lakh tonnes sugar for the month of September 2009
The Central Government has decided to release 20.45 lakh tonnes of sugar for the month of September 2009. The release includes normal quota of 14 lakh tonnes and dismantled buffer stock of 1.34 lakh tonnes. According to government, the quantity of 20.45 lakh tonnes is sufficient to meet the internal demand of sugar for the month of September 2009.
Sugar Quota Break-up (Figures are in lakh tonnes)
Levy Sugar:2.11
Non Levy Sugar:
a.Normal Quota:14.00
b.Dismantled Buffer Stock:1.34
c.Imported White Sugar out of Converted Raw Sugar:2.00
d.Expected Availability from Imported White/Refined Sugar:1.00
Total:20.45
The Central Government has also decided to introduce a system of fortnightly sale in respect of non-levy monthly sugar quota effective from September 09. Henceforth, sugar mills will be required to sell and dispatch their monthly non-levy quota on a fortnightly basis in two equal installments. The sugar mills would also be required to report actual sale and dispatch each fortnight, and this should reach the Directorate of Sugar within 7 days i.e. by 22nd of the month and 7th of the following month.
The Central Government has further decided to reduce the validity period of the release orders for white/refined sugar processed out of imported raw sugar released under accelerated release mechanism from 3 months to 1 month. Accordingly, the validity period of the August 2009 release order in respect of white/refined sugar processed out of imported raw sugar will stand reduced from the existing 31.10.2009 to 30.9.2009. Future releases of such sugar will also be issued with the validity period of 1 month. This has been done to bring in more sugars into the domestic market.
The Central Government had earlier put restriction on large consumers of sugar whose monthly consumption is more than 10 quintals from stocking sugar for more than 15 days. The above notification will come into effect after 21 days of its publication in the official Gazette i.e. on 12th September, 2009.
Sugar prices rose sharply today after the quota release. Spot prices of M Grade Sugar at Kolhapur touched Rs.3214.70 per quintal and S Grade Sugar at Vashi touched Rs.3225.90 per quintal. There seems to be no respite for the Indian consumers from the rising sugar prices. Sugar prices have almost doubled from the last year's prices as production fell sharply for 2008-09. Production for 2008-09 is estimated at around 140 to 150 lakh tonnes and for 2009-10 it is 150 to 160 lakh tonnes. India consumes around 230 lakh tonnes annually. That means, a shortage of around 60 to 70 lakh tonnes, which would be met from the buffer stocks and importing raw sugar from the global market. Indian government has extended the period for raw sugar import by the millers at zero duty till December 2010.
Sugar Quota Break-up (Figures are in lakh tonnes)
Levy Sugar:2.11
Non Levy Sugar:
a.Normal Quota:14.00
b.Dismantled Buffer Stock:1.34
c.Imported White Sugar out of Converted Raw Sugar:2.00
d.Expected Availability from Imported White/Refined Sugar:1.00
Total:20.45
The Central Government has also decided to introduce a system of fortnightly sale in respect of non-levy monthly sugar quota effective from September 09. Henceforth, sugar mills will be required to sell and dispatch their monthly non-levy quota on a fortnightly basis in two equal installments. The sugar mills would also be required to report actual sale and dispatch each fortnight, and this should reach the Directorate of Sugar within 7 days i.e. by 22nd of the month and 7th of the following month.
The Central Government has further decided to reduce the validity period of the release orders for white/refined sugar processed out of imported raw sugar released under accelerated release mechanism from 3 months to 1 month. Accordingly, the validity period of the August 2009 release order in respect of white/refined sugar processed out of imported raw sugar will stand reduced from the existing 31.10.2009 to 30.9.2009. Future releases of such sugar will also be issued with the validity period of 1 month. This has been done to bring in more sugars into the domestic market.
The Central Government had earlier put restriction on large consumers of sugar whose monthly consumption is more than 10 quintals from stocking sugar for more than 15 days. The above notification will come into effect after 21 days of its publication in the official Gazette i.e. on 12th September, 2009.
Sugar prices rose sharply today after the quota release. Spot prices of M Grade Sugar at Kolhapur touched Rs.3214.70 per quintal and S Grade Sugar at Vashi touched Rs.3225.90 per quintal. There seems to be no respite for the Indian consumers from the rising sugar prices. Sugar prices have almost doubled from the last year's prices as production fell sharply for 2008-09. Production for 2008-09 is estimated at around 140 to 150 lakh tonnes and for 2009-10 it is 150 to 160 lakh tonnes. India consumes around 230 lakh tonnes annually. That means, a shortage of around 60 to 70 lakh tonnes, which would be met from the buffer stocks and importing raw sugar from the global market. Indian government has extended the period for raw sugar import by the millers at zero duty till December 2010.
August 11, 2009
Agriculture Ministry’s latest Crop Weather Watch Report
According to the Agriculture Ministry’s latest Crop Weather Watch Report, released here on Monday, farmers had, as on last Thursday, sown only 228.19 lakh hectares (lh) under paddy as compared to 285.94 lakh hectares during the same period of the 2008-09 kharif season.
The shortfall of nearly 58 lakh hectares was mainly due to progressive acreages lagging behind in Uttar Pradesh (32.92 lh versus 57.92 lh), Bihar (14.83 lh versus 28.44 lakh hectares), West Bengal (20.71 lh versus 30.44 lh), Jharkhand (2.56 lh versus 7.07 lh) and Andhra Pradesh (7.23 lh versus 9.96 lh).
Chhattisgarh (30.19 lh versus 32.68 lh), Orissa (23.88 lh versus 24.47 lh), Punjab (27.05 lh versus 27.35 lh), Assam (15.76 lh versus 16.08 lh) and Haryana (10.88 lh versus 12.10 lh) have also reported marginal area declines, while Madhya Pradesh (10.23 lh versus 10.15 lh), Maharashtra (9.54 lh versus 6.67 lh), Gujarat (5.39 lh versus 4.96 lh) and Karnataka (4.76 lh versus 4.33 lh) have shown higher acreages.
The Agriculture Ministry is, however, hopeful of regaining some lost ground. Recent good rains in Orissa and West Bengal would lead to "100 per cent normal area coverage in both States", while even in eastern UP and Bihar, "planting will continue up to August end", the Weather Watch Report has claimed.
But even if the overall area shortfall is contained within limits, the impact of the severe moisture stress on crop yields is something that cannot be underestimated. Moreover, a significant paddy area upwards of 5 lh in the irrigated Punjab-Haryana-Western Uttar Pradesh belt has shifted this time in favour of low-yielding but high-value-fetching basmati varieties.
All this may eventually be reflected in the total kharif rice production, which, after last year’s record 84.58 million tonnes (mt), could end up around 20 mt lower, it is feared.
The other crop to have suffered heavily is groundnut, with farmers managing to sow only 35.72 lh, against last year’s corresponding coverage of 45.54 lh. Much of this is courtesy Andhra Pradesh, which has seen a dip in acreage, from 12.46 lh to 4.57 lh. Gujarat (17.64 lh to 16.55 lh), Karnataka (4.83 lh to 4.53 lh) and Rajasthan (3.24 lh to 3.13 lh) have also registered small shortfalls, even as Maharashtra expanded its cultivation area from 1.94 lh to 2.49 lh.
Most other crops – from coarse cereals to pulses and cotton – have witnessed increased sowing activity this time, notwithstanding extended dry spells in three-fourths of the country.
Three crops to have shown notable acreage increases are cotton (from 79.47 lh to 92.92 lh), maize (60.47 lh to 65.02 lh) and soyabean (91.31 lh to 93.68 lh).
Cotton area has gone up appreciably in Maharashtra (from 24.57 lh to 32.42 lh) and Gujarat (21.72 lh to 24.74 lh), and also in Andhra Pradesh (9.98 lh to 10.26 lh), Madhya Pradesh (6.18 lh to 6.44 lh), Punjab (5.27 lh to 5.36 lh), Haryana (4.55 lh to 5.20 lh), Rajasthan (3.55 lh to 3.65 lh) and Karnataka (1.76 lh to 2.62 lh).
In maize, Karnataka (6.29 lh to 10 lh), Maharashtra (3.01 lh to 6.21 lh) and Gujarat (3.63 lh to 4.20 lh) have reported higher coverage, while declines have been reported in Rajasthan (10.38 lh to 10.14 lh), Madhya Pradesh (8.41 lh to 8.30 lh), Uttar Pradesh (8.64 lh to 7.51 lh) and Andhra Pradesh (3.75 lh to 3.65 lh).
The increase in soyabean area has come largely from Maharashtra (26.09 lh to 29.24 lh), Karnataka (1.87 lh to 2.31 lh), Andhra Pradesh (1.45 lh to 1.81 lh) and Chhattisgarh (1.21 lh to 1.27 lh), which have counterbalanced drops in Madhya Pradesh (51.42 lh to 51.02 lh) and Rajasthan (8.48 lh to 7.05 lh).
August 10, 2009
Pulses consumption drops as prices go up
According to Associated Chambers of Commerce and Industry of India (Assocham), the households have curtailed consumption of pulses in the first half of this year due to high prices.
The per capita consumption of pulses declined to 11 kg in the first half. In contrast, the per capita consumption in the 1960's was 27 kg.
A factor responsible for this situation is that no serious attention has been paid to increase pulses production, especially under the National Food Security Mission (NFSM), which focused more on wheat, rice, millet and corn. Efforts were made to increase the yield of these crops at the cost of pulses, the report said.
As a result, the yield for a hectare declined and in turn, production has been hit. The situation has resulted in prices doubling during the last one year.
The Assocham said it is likely that the per capita consumption could decline to near nine kg in the later part of the year since it is unlikely that the soaring prices will be checked.
Currently, tur or red gram is quoting around Rs 100 a kg, while prices of other lentils are also ruling higher on fear of the deficit monsoon affecting pulses production.
The report further adds that the area under pulses crop was not increasing and the growth in yield was sluggish.
The compounded annual growth rate (CAGR) of pulses during the last five decades has been a meagre 0.9 per cent.
In fact, until 2007-08, production never topped 14.91 million tonnes (mt). During 2007-08, production clocked a record high of 15.1 million tonnes.
The country is well short of demand and has to resort to imports. Increasing demand for pulses on account of rising population has led to imports increasing to over 20 lakh tonnes during 2008-09 from 4.6 lakh tonnes during 1998-99.
The report points out that since pulses demand remains price sensitive, per capita consumption has gradually declined over the years. While total pulses availability in the country has reflected a growth of mere 1.39 per cent (CAGR) during the last two decades, population has increased at a CAGR of more than 1.8 per cent.
Low import tariffs have helped increased imports, including the June 8, 2006 decision of allowing pulses shipments into the country duty-free. In order to battle against rising domestic prices and for fulfilling domestic needs government allowed duty free imports from June 8, 2006.
Consequently, imports touched 2.26 million tonnes in 2006-07, the maximum since 1980-81. India occupied top slot in chick peas and dry beans imports in 2005. India imports sizeable quantities of pulses including chick peas, dry beans, lentils and dry peas, besides tur, urad and moong. Ironically, countries like Canada, Australia are factoring Indian demand in their production plans and are highly successful in exploiting Indian situation to their advantage
Interestingly, India's export of pulses grew at a far greater pace than imports, from 1.09 thousand tonnes in 1980-81 to 447.44 thousand tonnes in 2005-06. Looking at rising consumption of pulses in India against domestic output and resultant high prices, the government banned export of pulses.
India imports significant quantity of pulses from Canada, Myanmar, Australia, and the USA each contributing about 40 per cent, 27 per cent, 9 per cent and 6 per cent respectively to total imports of India. The other countries including Ukraine, France, China and Tanzania are also offering varying quantity of pulses to India. The country's imports from Canada, Australia and the USA have increased during the last five years though, imports from Myanmar has shown slight decrease recently.
The per capita consumption of pulses declined to 11 kg in the first half. In contrast, the per capita consumption in the 1960's was 27 kg.
A factor responsible for this situation is that no serious attention has been paid to increase pulses production, especially under the National Food Security Mission (NFSM), which focused more on wheat, rice, millet and corn. Efforts were made to increase the yield of these crops at the cost of pulses, the report said.
As a result, the yield for a hectare declined and in turn, production has been hit. The situation has resulted in prices doubling during the last one year.
The Assocham said it is likely that the per capita consumption could decline to near nine kg in the later part of the year since it is unlikely that the soaring prices will be checked.
Currently, tur or red gram is quoting around Rs 100 a kg, while prices of other lentils are also ruling higher on fear of the deficit monsoon affecting pulses production.
The report further adds that the area under pulses crop was not increasing and the growth in yield was sluggish.
The compounded annual growth rate (CAGR) of pulses during the last five decades has been a meagre 0.9 per cent.
In fact, until 2007-08, production never topped 14.91 million tonnes (mt). During 2007-08, production clocked a record high of 15.1 million tonnes.
The country is well short of demand and has to resort to imports. Increasing demand for pulses on account of rising population has led to imports increasing to over 20 lakh tonnes during 2008-09 from 4.6 lakh tonnes during 1998-99.
The report points out that since pulses demand remains price sensitive, per capita consumption has gradually declined over the years. While total pulses availability in the country has reflected a growth of mere 1.39 per cent (CAGR) during the last two decades, population has increased at a CAGR of more than 1.8 per cent.
Low import tariffs have helped increased imports, including the June 8, 2006 decision of allowing pulses shipments into the country duty-free. In order to battle against rising domestic prices and for fulfilling domestic needs government allowed duty free imports from June 8, 2006.
Consequently, imports touched 2.26 million tonnes in 2006-07, the maximum since 1980-81. India occupied top slot in chick peas and dry beans imports in 2005. India imports sizeable quantities of pulses including chick peas, dry beans, lentils and dry peas, besides tur, urad and moong. Ironically, countries like Canada, Australia are factoring Indian demand in their production plans and are highly successful in exploiting Indian situation to their advantage
Interestingly, India's export of pulses grew at a far greater pace than imports, from 1.09 thousand tonnes in 1980-81 to 447.44 thousand tonnes in 2005-06. Looking at rising consumption of pulses in India against domestic output and resultant high prices, the government banned export of pulses.
India imports significant quantity of pulses from Canada, Myanmar, Australia, and the USA each contributing about 40 per cent, 27 per cent, 9 per cent and 6 per cent respectively to total imports of India. The other countries including Ukraine, France, China and Tanzania are also offering varying quantity of pulses to India. The country's imports from Canada, Australia and the USA have increased during the last five years though, imports from Myanmar has shown slight decrease recently.
August 7, 2009
Indian Oilmeal Exports fall by 63 per cent
India's oilmeal exports fell by 63 per cent year-on-year due to the impact of the global economic recession and non-availability of adequate meal. Exports during the four months ended June 30, 2009 were placed at 7.6 lakh tonnes against 19 lakh tonnes (1.9 million tonnes) during the same period a year-ago.
According to Solvent Extractors’ Association of India, total exports during the month reduced to 173,329 tonnes as compared to 474,590 tonnes in the corresponding month last year.
In the first four months of the current financial year, cattle feed shipments slumped 59 per cent to 787,857 tonnes as compared to 1,908,396 tonnes in the same period last year. India’s poor performance can be attributed to worsening demand in Southeast Asian countries as they were the major importers of Indian meal.
Meanwhile, domestic demand has improved significantly, giving no reason as to why producers would opt for exports when realisation in the local market was almost on a par with exports. Oilmeal exports supported better realisation for local farmers. The export market of oilmeal has developed after great efforts in many years and India was now enjoying the reputation of a dependable supplier.
During the period between April and July 2009, China bought 137,252 tonnes of oilmeals, mainly consisting of rapeseed meal of 136,592 tonnes and a small quantity of soybean meal.
However, exports to Vietnam steeply reduced to 238,232 tonnes from 511,401 tonnes in April-July 2008. Similarly, exports to South Korea, Japan, Indonesia and Thailand have also reduced due to reduction in consumption. In case of Japan, it stood at 84,493 tonne from 2.2 lakh tonnes, while it was 1.1 lakh tonnes from 2.9 lakh tonnes in case of South Korea. Exports to Indonesia for the four-month period were placed at 65,820 tonne as against 1.5 lakh tonnes in 2008.
Traders and analysts are now hoping that the kharif soyabean crop is robust to ensure that exports bounce back.
According to Solvent Extractors’ Association of India, total exports during the month reduced to 173,329 tonnes as compared to 474,590 tonnes in the corresponding month last year.
In the first four months of the current financial year, cattle feed shipments slumped 59 per cent to 787,857 tonnes as compared to 1,908,396 tonnes in the same period last year. India’s poor performance can be attributed to worsening demand in Southeast Asian countries as they were the major importers of Indian meal.
Meanwhile, domestic demand has improved significantly, giving no reason as to why producers would opt for exports when realisation in the local market was almost on a par with exports. Oilmeal exports supported better realisation for local farmers. The export market of oilmeal has developed after great efforts in many years and India was now enjoying the reputation of a dependable supplier.
During the period between April and July 2009, China bought 137,252 tonnes of oilmeals, mainly consisting of rapeseed meal of 136,592 tonnes and a small quantity of soybean meal.
However, exports to Vietnam steeply reduced to 238,232 tonnes from 511,401 tonnes in April-July 2008. Similarly, exports to South Korea, Japan, Indonesia and Thailand have also reduced due to reduction in consumption. In case of Japan, it stood at 84,493 tonne from 2.2 lakh tonnes, while it was 1.1 lakh tonnes from 2.9 lakh tonnes in case of South Korea. Exports to Indonesia for the four-month period were placed at 65,820 tonne as against 1.5 lakh tonnes in 2008.
Traders and analysts are now hoping that the kharif soyabean crop is robust to ensure that exports bounce back.
August 6, 2009
Tur dal price may touch Rs 140 in Andhra Pradesh
Traders indicate the tur dal price could go up to Rs 140 in the next two months, as arrivals from key markets plummet. The failure of monsoons too might add to the problem.
The State, which recorded a dip of 33 per cent (one lakh tonnes) in tur dal production in 2008-09 over the previous year’s three lakh tonnes, is likely to witness a further fall in production this year due to the failure of the monsoon.
Though the price has seen a downward trend in the last few days, it is likely to touch Rs 140 a kg.
While the State Government puts the blame on the traders for the unprecedented crisis, the traders allege the huge dip in arrivals resulted in the price increase this year.
The arrivals of raw tur dal from Tandur market, which used to be 3.70 lakh bags annually, are down to 1.70 lakh bags this year, a shortfall of two lakh quintals.
Reacting to the allegation that traders were resorting to hoarding, Mr Rajendar Kimtee, General-Secretary of the Twin Cities Daal Millers and Merchants Association said, the total stocks in the twin cities and Rangareddy district markets were pegged at 15,000 quintals of raw tur dal and a same quantity of tur dal.
The State imposes a stock limit of 2,000 quintals (of all pulses put together) on wholesalers.
The raw dal itself is costing (the millers) Rs 54 a kg. After conversion, it costs Rs 68-70. Added to this is the 4 per cent VAT and the retailer margins, resulting in the high price.
Realising the sensitiveness of the dal price issue, traders have decided to open special counters to sell it at a lesser price.
Also, the kharif season indicates still harder days ahead. The State, which grows tur in 4.52 lakh hectares, is expected to end with lesser output this year due to severe shortage of rainfall. The area shrunk from 4.63 lakh hectares in 2007-08 to 4.42 lakh hectares in 2008-09.
As on July 30, there is a shortfall of 30 per cent in the total area sown. This would further increase as rains continue to elude the tur growing area.
The State, which recorded a dip of 33 per cent (one lakh tonnes) in tur dal production in 2008-09 over the previous year’s three lakh tonnes, is likely to witness a further fall in production this year due to the failure of the monsoon.
Though the price has seen a downward trend in the last few days, it is likely to touch Rs 140 a kg.
While the State Government puts the blame on the traders for the unprecedented crisis, the traders allege the huge dip in arrivals resulted in the price increase this year.
The arrivals of raw tur dal from Tandur market, which used to be 3.70 lakh bags annually, are down to 1.70 lakh bags this year, a shortfall of two lakh quintals.
Reacting to the allegation that traders were resorting to hoarding, Mr Rajendar Kimtee, General-Secretary of the Twin Cities Daal Millers and Merchants Association said, the total stocks in the twin cities and Rangareddy district markets were pegged at 15,000 quintals of raw tur dal and a same quantity of tur dal.
The State imposes a stock limit of 2,000 quintals (of all pulses put together) on wholesalers.
The raw dal itself is costing (the millers) Rs 54 a kg. After conversion, it costs Rs 68-70. Added to this is the 4 per cent VAT and the retailer margins, resulting in the high price.
Realising the sensitiveness of the dal price issue, traders have decided to open special counters to sell it at a lesser price.
Also, the kharif season indicates still harder days ahead. The State, which grows tur in 4.52 lakh hectares, is expected to end with lesser output this year due to severe shortage of rainfall. The area shrunk from 4.63 lakh hectares in 2007-08 to 4.42 lakh hectares in 2008-09.
As on July 30, there is a shortfall of 30 per cent in the total area sown. This would further increase as rains continue to elude the tur growing area.
Karnataka heading for a bumper maize crop
Karnataka is clearly heading for a bumper maize crop in the ongoing kharif season. According to data available, acreage under maize has already touched the 9.59-lakh-hectare-mark, indicating 100% of the targeted acreage.
It is estimated that the state's acreage would easily cross the 10 lakh hectare mark with production zooming past the 20-lakh-tonne level. The state's productivity is pegged around 30 quintals (100 kg) per hectare.
According to state agriculture department official, Maize has gained in acreage as farmers have been buoyed by the 35 per cent rise in the minimum support price (MSP) last year. Farmers across all the major producing districts be it Davangere, Haveri, Belgaum or Hassan are showing a preference for maize this year. Maize MSP was revised upwards to Rs 840 per quintal against Rs 620 per quintal.
Potato farmers in the state’s Hassan district have, for instance, shown preference for maize after the outbreak of the dreaded "potato blight" last year. Potato acreage is barely 50 per cent of the targeted acreage in the ongoing kharif season.
The state which accounts for 8 per cent to 10 per cent of the national maize output is also expected to benefit from the possible lower output in the other major producing states like Andhra Pradesh, Rajasthan and Uttar Pradesh. Estimates indicate that the production shortfall in these three states could be between 20 per cent and 30 cent this kharif season. Collectively, these three account for about 40 per cent of India’s 20 million tonnes of maize production.
Traders, who are keeping a close tab on the maize acreage in the state, say that if the Union government decides to hike the MSP once again, procurement could be hit. The last hike itself made local maize pricey and impacted buyers.
While poultry units account for close to 50 per cent of the national offtake, about 30 per cent to 35 per cent is procured by starch makers with the balance being either used for human consumption or is carried forward.
It is estimated that the state's acreage would easily cross the 10 lakh hectare mark with production zooming past the 20-lakh-tonne level. The state's productivity is pegged around 30 quintals (100 kg) per hectare.
According to state agriculture department official, Maize has gained in acreage as farmers have been buoyed by the 35 per cent rise in the minimum support price (MSP) last year. Farmers across all the major producing districts be it Davangere, Haveri, Belgaum or Hassan are showing a preference for maize this year. Maize MSP was revised upwards to Rs 840 per quintal against Rs 620 per quintal.
Potato farmers in the state’s Hassan district have, for instance, shown preference for maize after the outbreak of the dreaded "potato blight" last year. Potato acreage is barely 50 per cent of the targeted acreage in the ongoing kharif season.
The state which accounts for 8 per cent to 10 per cent of the national maize output is also expected to benefit from the possible lower output in the other major producing states like Andhra Pradesh, Rajasthan and Uttar Pradesh. Estimates indicate that the production shortfall in these three states could be between 20 per cent and 30 cent this kharif season. Collectively, these three account for about 40 per cent of India’s 20 million tonnes of maize production.
Traders, who are keeping a close tab on the maize acreage in the state, say that if the Union government decides to hike the MSP once again, procurement could be hit. The last hike itself made local maize pricey and impacted buyers.
While poultry units account for close to 50 per cent of the national offtake, about 30 per cent to 35 per cent is procured by starch makers with the balance being either used for human consumption or is carried forward.
August 5, 2009
Guargum and Guarseed prices to remain firm on lower crop outlook
Guar seed and gaur gum prices, which have increased sharply during the past fortnight, are set to gain further as guar production is likely to be sharply lower on scanty rains in the growing areas.
Guar seed prices have gained 5 per cent in the last fortnight, while the gum prices have increased 15 per cent.
According to market experts, guar production is likely to be only three lakh tonnes (30 lakh bags of 100 kg) in 2009-10 against 10 lakh tonnes last year. At the same time, global demand is expected to remain unchanged. Therefore, the market will witness sharp rise.
Guar or cluster beans is a legume crop that grows best in semi-arid regions in the country. It is grown primarily in Rajasthan. The crop is also grown in Haryana, Punjab, Gujarat and Madhya Pradesh. While guar is seen as a vegetable in the South, it is primarily seen as a raw material to produce guar gum in the North.
Guar gum is used as a thickening agent and additives in food products such as instant soups, sauces, processed meat products, baked goods, milk and cheese products, yoghurt and ice-creams. It is also used in industrial applications such as paper and textile sectors, ore floatation, explosives manufacture and fracturing of oil and gas formations. India is the major producer of guarseed and gum, making up 80 per cent of the total global supply.
The crop in Rajasthan is likely to be two lakh tonnes only, while Haryana’s production will be 60,000 tonnes. Gujarat could produce 25,000 tonnes, while the rest is expected to come from other growing areas. Rajasthan and Haryana contribute 70 per cent and 20 per cent respectively to the total guar production in the country.
While scanty rains have affected the production prospects, another reason for the fall is farmers’ preference for crops such as pulses over guar to get better remuneration. Haryana and Rajasthan Governments’ move to distribute hybrid seeds of bajra, moong and moth has also had its impact on the crop.
Guar sowing was expected to gather momentum after July 25, 2009 but with monsoon being scanty over Haryana and Rajasthan’s Hanumangarh and Ganganagar districts, the outlook has turned bleak.
Guar seed prices have gained 5 per cent in the last fortnight, while the gum prices have increased 15 per cent.
According to market experts, guar production is likely to be only three lakh tonnes (30 lakh bags of 100 kg) in 2009-10 against 10 lakh tonnes last year. At the same time, global demand is expected to remain unchanged. Therefore, the market will witness sharp rise.
Guar or cluster beans is a legume crop that grows best in semi-arid regions in the country. It is grown primarily in Rajasthan. The crop is also grown in Haryana, Punjab, Gujarat and Madhya Pradesh. While guar is seen as a vegetable in the South, it is primarily seen as a raw material to produce guar gum in the North.
Guar gum is used as a thickening agent and additives in food products such as instant soups, sauces, processed meat products, baked goods, milk and cheese products, yoghurt and ice-creams. It is also used in industrial applications such as paper and textile sectors, ore floatation, explosives manufacture and fracturing of oil and gas formations. India is the major producer of guarseed and gum, making up 80 per cent of the total global supply.
The crop in Rajasthan is likely to be two lakh tonnes only, while Haryana’s production will be 60,000 tonnes. Gujarat could produce 25,000 tonnes, while the rest is expected to come from other growing areas. Rajasthan and Haryana contribute 70 per cent and 20 per cent respectively to the total guar production in the country.
While scanty rains have affected the production prospects, another reason for the fall is farmers’ preference for crops such as pulses over guar to get better remuneration. Haryana and Rajasthan Governments’ move to distribute hybrid seeds of bajra, moong and moth has also had its impact on the crop.
Guar sowing was expected to gather momentum after July 25, 2009 but with monsoon being scanty over Haryana and Rajasthan’s Hanumangarh and Ganganagar districts, the outlook has turned bleak.
Maharashtra cuts sugar output estimates for 2009-10
The country’s No. 1 sugar producing State, Maharashtra, has cut its output estimates for the ensuing 2009-10 crushing season (October to September).
The state had earlier expected to crush 455 lakh tonnes of cane, which, at an average recovery of 11.5 per cent, would have yielded around 52 lakh tonnes of sugar. But now, it looks mills would crush only 410 lakh tonnes, translating into a sugar production of slightly over 47 lakh tonnes.
The new projection is not markedly higher than the 46.14 lakh tonnes produced during the 2008-09 season, which saw 400.42 lakh tonnes of cane being crushed at an average recovery of 11.52 per cent. That, in turn, could have a bearing on the overall sugar supply-demand balance for the coming year, which is predicted on the prospects of a significant recovery in output from the official 150 to 155 lakh tonnes estimate for 2008-09.
Maharashtra’s downward revision is being attributed to the delayed onset of southwest monsoon rains. The cane producing areas had hardly received any rains throughout June.
It led to a severe shortage of fodder. And since the only patch of green that could be seen then was the semi-mature, standing cane crop, some of it got diverted for fodder. Even, last year a certain percentage of cane crop was diverted for fodder due to erratic rains.
The farmers get anything around Rs 2,000 a tonne for the fodder and that too, in ready cash (as against the average Rs 1,400 that mills paid for the fully mature cane crushed during the recent season). June being so dry, nobody thought the rains to recover in July (as they did). So, there was a desperate demand for fodder to feed the animals and the cane growers just cashed in on that.
The state had earlier expected to crush 455 lakh tonnes of cane, which, at an average recovery of 11.5 per cent, would have yielded around 52 lakh tonnes of sugar. But now, it looks mills would crush only 410 lakh tonnes, translating into a sugar production of slightly over 47 lakh tonnes.
The new projection is not markedly higher than the 46.14 lakh tonnes produced during the 2008-09 season, which saw 400.42 lakh tonnes of cane being crushed at an average recovery of 11.52 per cent. That, in turn, could have a bearing on the overall sugar supply-demand balance for the coming year, which is predicted on the prospects of a significant recovery in output from the official 150 to 155 lakh tonnes estimate for 2008-09.
Maharashtra’s downward revision is being attributed to the delayed onset of southwest monsoon rains. The cane producing areas had hardly received any rains throughout June.
It led to a severe shortage of fodder. And since the only patch of green that could be seen then was the semi-mature, standing cane crop, some of it got diverted for fodder. Even, last year a certain percentage of cane crop was diverted for fodder due to erratic rains.
The farmers get anything around Rs 2,000 a tonne for the fodder and that too, in ready cash (as against the average Rs 1,400 that mills paid for the fully mature cane crushed during the recent season). June being so dry, nobody thought the rains to recover in July (as they did). So, there was a desperate demand for fodder to feed the animals and the cane growers just cashed in on that.
July 31, 2009
Indian government releases 16.50 lakh tonnes sugar for open sale in August
The Indian government has released 16.5 lakh tonnes of sugar for the open market sales by mills for the month of August 2009. The release includes 13.77 lakh tonnes of Free Sale Quota (FSQ) of mills, besides 1.33 lakh tonnes out of the dismantled buffer stock created earlier, and 1.4 lakh tonnes of white sugar processed from the imported raw sugar.
The government has done away with the practice of announcing the non-levy or free sale sugar quota on quarterly basis and instead started releasing it on a monthly basis with effect from July 2009, till suspension of futures trading in sugar remains in force.
Further, 61371 million tonnes of white/refined sugar imported by designated agencies has already landed. It is expected that importers would dispose of at least one third of quantity imported white/refined sugar in the month of August 2009.
A quantity of 1.85 lakh tonnes has also been released under levy sugar for distribution in the public distribution system (PDS) for August. Thus, the total sugar available in August 2009 would be 18.55 lakh tonnes, sufficient to meet the internal demand of sugar for this month.
Sugar experts feel that the latest decision has been taken to conserve sugar. With estimated opening stocks of 95 lakh tonnes, production of 150 lakh tonnes and consumption of 230 lakh tonnes, the current 2008-09 sugar season (October-September) will close with stocks of 15 lakh tonnes.
Although the country might end up importing 30 lakh tonnes of raw sugar, only about 10 lakh tonnes of this might be converted into whites. Much of the raw sugar that have been imported can be processed only from December, when the mills start crushing and there is bagasse available from the cane that can be used as fuel.
The government has done away with the practice of announcing the non-levy or free sale sugar quota on quarterly basis and instead started releasing it on a monthly basis with effect from July 2009, till suspension of futures trading in sugar remains in force.
Further, 61371 million tonnes of white/refined sugar imported by designated agencies has already landed. It is expected that importers would dispose of at least one third of quantity imported white/refined sugar in the month of August 2009.
A quantity of 1.85 lakh tonnes has also been released under levy sugar for distribution in the public distribution system (PDS) for August. Thus, the total sugar available in August 2009 would be 18.55 lakh tonnes, sufficient to meet the internal demand of sugar for this month.
Sugar experts feel that the latest decision has been taken to conserve sugar. With estimated opening stocks of 95 lakh tonnes, production of 150 lakh tonnes and consumption of 230 lakh tonnes, the current 2008-09 sugar season (October-September) will close with stocks of 15 lakh tonnes.
Although the country might end up importing 30 lakh tonnes of raw sugar, only about 10 lakh tonnes of this might be converted into whites. Much of the raw sugar that have been imported can be processed only from December, when the mills start crushing and there is bagasse available from the cane that can be used as fuel.
July 28, 2009
Government allows duty-free raw sugar import beyond August 1 2009
The Union Government has extended beyond 1 August 2009
the import facility for raw sugar at zero duty without
any export obligation and that of white sugar through
state-owned trading firms to augment domestic supply.
The move has come amid growing apprehension about the
fate of sugar production next season, starting October,
following a decline in the area under sugarcane to 42.5
lakh hectares (as on July 17) from 43.8 lakh hectares
in the same period a year ago.
Earlier in April, the government had scrapped a 60 per
cent import duty on raw sugar and allowed duty-free import
till August 1 under the pen GeneralLicense (OGL) scheme,
under which mills do not have any export obligation.
It had also allowed Minerals and Metals Trading Corp (MMTC),
State Trading Corp (STC) and PEC to import refined sugar up
to 10 lakh tonnes at zero duty till August 1.
According to sugar industry experts, the country has imported
raw sugar of 16.8 lakh tonnes as of now, while another 1.7
lakh tonnes are expected to reach by the end of this month.
Around 29 lakh tonnes have been contracted so far.
Similarly, the PSUs have contracted 1.2 lakh tonnes of refined
sugar so far, out of which 43,550 tonnes have already arrived.
A total of 79,605 tonnes is expected to land here by the end
of this month.
The lower output has resulted in a higher price of sugar,
which is currently selling at Rs 27-30 a kg in retail markets
compared to Rs 16-17 a kg a year before.
India's sugar output in 2009/10 is expected to reach 175 to 185
lakh tonnes, lower than the previously estimated 200 lakh tonnes
due to delay in progress of monsoon.
the import facility for raw sugar at zero duty without
any export obligation and that of white sugar through
state-owned trading firms to augment domestic supply.
The move has come amid growing apprehension about the
fate of sugar production next season, starting October,
following a decline in the area under sugarcane to 42.5
lakh hectares (as on July 17) from 43.8 lakh hectares
in the same period a year ago.
Earlier in April, the government had scrapped a 60 per
cent import duty on raw sugar and allowed duty-free import
till August 1 under the pen GeneralLicense (OGL) scheme,
under which mills do not have any export obligation.
It had also allowed Minerals and Metals Trading Corp (MMTC),
State Trading Corp (STC) and PEC to import refined sugar up
to 10 lakh tonnes at zero duty till August 1.
According to sugar industry experts, the country has imported
raw sugar of 16.8 lakh tonnes as of now, while another 1.7
lakh tonnes are expected to reach by the end of this month.
Around 29 lakh tonnes have been contracted so far.
Similarly, the PSUs have contracted 1.2 lakh tonnes of refined
sugar so far, out of which 43,550 tonnes have already arrived.
A total of 79,605 tonnes is expected to land here by the end
of this month.
The lower output has resulted in a higher price of sugar,
which is currently selling at Rs 27-30 a kg in retail markets
compared to Rs 16-17 a kg a year before.
India's sugar output in 2009/10 is expected to reach 175 to 185
lakh tonnes, lower than the previously estimated 200 lakh tonnes
due to delay in progress of monsoon.
July 22, 2009
Indian Government raises food grain output estimates
The Union Government has revised upwards its food grain production estimates for 2008-09 by over four million tonnes.
The Agriculture Ministry’s ‘Fourth Advance Estimate’, finalised last week, puts the country’s total food grain output for 2008-09 at an all-time-high of 233.88 million tonnes (mt), bettering the earlier record of 230.78 mt achieved in 2007-08.
The latest 233.88 mt figure is also more than the ‘Third Advance Estimate’ of 229.85 mt and the ‘Second Advance Estimate’ of 227.88 mt, released in May and February, respectively. Much of the upward revision is on account of wheat and maize.
According to the estimate, the rice production rose to an all-time high of 99.15 million tonnes during 2008-09, compared to 96.69 million tonnes in 2007-08. The 2008-09 wheat crop’s size is now reckoned at a new high of 80.58 mt, compared with the preceding estimates of 77.63 mt and 77.78 mt. The reassessment follows an unprecedented 25.14 mt of procurement by Government agencies, surpassing the 22.69 mt that was mopped up from the 2007-08 crop of 78.57 mt.
The output estimates of maize have likewise been raised from 17.04 mt (February) and 18.48 mt (May) to a record 19.29 mt.
Pulses production has been revised slightly upward to 14.66 million tonnes against 14.18 million tonnes in the third advance estimates. Pulses output stood at 14.76 million tonnes in 2007-08 season.
Among oilseeds, the production of soyabean, has been revised downward, while mustard and groundnut output is reported higher than the last estimate.
Soyabean production is now seen at 9.9 million tonnes, mustard output at 7.37 million tonnes and groundnut at 7.34 million tonnes.
According to the agriculture ministry data, the nation is estimated to have produced 271.25 million tonnes of sugarcane and 23.16 million tonnes of cotton bales in 2008-09 season (170 kg a bale).
The government had fixed a target of 233 million tonnes food grains production for 2008-09.
The Agriculture Ministry’s ‘Fourth Advance Estimate’, finalised last week, puts the country’s total food grain output for 2008-09 at an all-time-high of 233.88 million tonnes (mt), bettering the earlier record of 230.78 mt achieved in 2007-08.
The latest 233.88 mt figure is also more than the ‘Third Advance Estimate’ of 229.85 mt and the ‘Second Advance Estimate’ of 227.88 mt, released in May and February, respectively. Much of the upward revision is on account of wheat and maize.
According to the estimate, the rice production rose to an all-time high of 99.15 million tonnes during 2008-09, compared to 96.69 million tonnes in 2007-08. The 2008-09 wheat crop’s size is now reckoned at a new high of 80.58 mt, compared with the preceding estimates of 77.63 mt and 77.78 mt. The reassessment follows an unprecedented 25.14 mt of procurement by Government agencies, surpassing the 22.69 mt that was mopped up from the 2007-08 crop of 78.57 mt.
The output estimates of maize have likewise been raised from 17.04 mt (February) and 18.48 mt (May) to a record 19.29 mt.
Pulses production has been revised slightly upward to 14.66 million tonnes against 14.18 million tonnes in the third advance estimates. Pulses output stood at 14.76 million tonnes in 2007-08 season.
Among oilseeds, the production of soyabean, has been revised downward, while mustard and groundnut output is reported higher than the last estimate.
Soyabean production is now seen at 9.9 million tonnes, mustard output at 7.37 million tonnes and groundnut at 7.34 million tonnes.
According to the agriculture ministry data, the nation is estimated to have produced 271.25 million tonnes of sugarcane and 23.16 million tonnes of cotton bales in 2008-09 season (170 kg a bale).
The government had fixed a target of 233 million tonnes food grains production for 2008-09.
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