i

AgriNews: July 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 June 26, 2013 to July 25, 2013)

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CONTENTS

Section Title Page No.

1 Highlights 1

2 Broad Sectoral Trends 5

3 Agricultural Policy 7

4 Rice 23

5 Wheat 33

6 Maize /Coarse cereals 43

7 Pulses 45

8 Edible Oils / Oilseeds 51

9 Milk 57

10 Vegetables – Potato/ Onoins 65

11 Sugarcane / Sugar 73

12 Inputs 79

13 Other Agri / Farm News 87

14 Agricultural / Food Prices 109

15 Agricultural Futures Prices 111

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

Times, FE= Financial Express

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1

HIGHLIGHTS

Broad Sectoral Trends

Indian economy seeing signs of upward momentum: OECD (ET 8.7.13)

Plan panel may cut 12th Plan growth target to 7% from 8% (FE 15.7.13)

Agricultural Policy

Higher MSP to fuel food inflation: Experts (ET 28/6/2013)

Food Bill: Govt takes ordinance route; Opposition cries foul (BL 03/7/2013)

Food Ministry in favour of 7.5 per cent import duty on pulses (ET 8.7.13)

Govt notifies sugar import duty hike to 15% from 10% (ET 9.7.13)

President asks ICAR to bring clarity on safety concerns of GM crops (ET 17.7.13)

WTO to discuss India’s proposal to hike food subsidy limits (BL 18/7/2013)

Maharashtra mulls new sugarcane Act (BS 19.7.13)

Government may release food grains stock to tame inflation: KV Thomas (ET

22.7.13)

Put genetically-modified crop trials on hold for now: Supreme Court Panel (ET

23.7.13)

Rice

Iraq keen on sourcing basmati from India (FE 4.7.13)

Mauritius gives nod for India’s basmati certification mechanism (ET 05/7/2013)

Basmati seed at 100% premium over procurement price (BS 9.7.13)

Weak rains cloud paddy outlook for eastern region (ET 23/7/2013)

Wheat

FCI exports 4.19 mn tonnes wheat; to earn over Rs 7,000 crore (ET 27.6.13)

Wheat procurement lower by one-third so far this market year (ET 27.6.13)

FCI to sell 9.5mt wheat to bulk users in open market (ET 9.7.13)

Indian wheat loses to cheaper Black Sea produce (BL 16/7/2013)

Govt scales down 2012-13 wheat output estimate by 2.55% (BS 23.7.13)

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Maize/Coarse Grains

Punjab government announces 75% subsidy on maize seeds (ET 5.7.13)

Maize prices up despite higher sowing (BS 10.7.13)

Pulses

CACP aims at boosting domestic pulses output by imposing 10% import duty (ET 03

.7.13)

Pulses trade against duty on imports (BL 03/7/2013)

India produces record pulses in 2012-13; Foodgrains output down (ET 22/7/2013)

Edible Oils and Oilseeds

Refined palm oil imports drop 21% in June (ET 15.7.13)

Vegetable oil imports up 21% in June (BS 15.7.13)

Milk

Milk prices up on rising input cost (BS 1.7.13)

Indian dairy firms eye Southeast Asia (BS 11.7.13)

Vegetables/ Onion /Potato

Vegetable prices rise 50 per cent owing to bad weather (ET 26.6.13)

Onion tops Rs 2,000/quintal on supply shortfall (BL 12/7/2013)

Onion prices more than double to Rs 36-40/kg in metros (ET 23/7/2013)

Sugar

India signs 75,000 tonnes sugar export deals for July : Dealers (ET 1.7.13)

Maharashtra drought to hit sugarcane production (BS 10.7.13)

Sugar output may drop 5.2% in 2013-14 on dry spells, says Isma (FE 10.7.13)

A weak rupee and Ramzan-triggered higher demand boast sugar exports (ET

17/7/2013)

Inputs

MNCs going all out to push new-gen pesticides (BL 27/6/2013)

Gujrat organic farmers to develop seed banks to take on GM seeds (ET 01/7/2013)

Imported urea cost come down by around 20% in Q1 of 2013-14(BS 25.7.13)

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Other Commodities/News

Monsoon: The best June in 12 years (BL 02/07/2013)

Record rains in June aids power, agricultural output (ET 2/7/2013)

Kharif sowing soars on timely, widespread rain (BL 05/7/2013)

GLobal cereal output to reach all time high in 2013: UNFAO (BL 11/10/2013)

Poor investment blamed for fall in agri growth rate (BL 17/7/2013)

Skymet predicts below-normal rainfall in north after July 24 (ET 19.7.13)

Agricultural Commodity Prices

Minimum support price of kharif crops raised by CCEA (ET 28/6/2013)

June retail inflation at 9.87% on pricey veggies (FE 14.7.13)

Inflation rises to 4.86% in June, onion prices shoot up by 114% (FE 16.7.13)

Food prices won't decline despite normal monsoons, say experts (BL 23/7/2013)

Agricultural Commodity Futures Prices

Edible oils flat on thin trade, bearish futures (BL 01/7/2013)

Potato up 1.2% on pick-up in spot demand; tight supply (BS 2.7.13)

Chana futures down 1.2% on better rains (BS 2.7.13)

Edible oils flare up on hopes of higher demand (BL 5/7/2013)

Sugar drops on weak world market, ample supplies (ET 17/7/2013)

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5

BROAD SECTORAL TRENDS

Indian economy seeing signs of upward momentum: OECD (ET 8.7.13)

Indian economy is seeing signs of upward momentum helped by gradual reduction of

inflationary pressure, according to Paris-based think tank OECD.

Indian economy is seeing signs of upward momentum helped by gradual reduction of

inflationary pressure though the country's growth still remains "relatively weak", according to

Paris-based think tank OECD.

In most of the developed countries, growth prospects are expected to witness moderate

improvements, the Organisation for Economic Co-operation and Development (OECD) said.

The conclusions are based on Composite Leading Indicators that are designed to anticipate

turning points in economic activities.

"The CLIs for the United Kingdom, Canada and China point to growth close to trend rates

and the CLI for India points to a tentative upward change in momentum," the grouping said

in a report today.

India's growth slowed to a decade-low of five per cent in the last fiscal from 6.2 per cent in

the 2010-11 period.

The indicators for Russia and Brazil, however, point to slowing momentum, OECD said.

India's CLI marginally rose to 97.6 in May. The reading stood at 97.3 in April, March and

February. In January, the reading was better at 97.7.

In a separate report, OECD, a grouping of mostly developed nations, said the growth in

ASEAN economies remains resilient compared to the region's two large economies -- India

and China.

"Growth momentum in the two large economies is weaker than in ASEAN. India's growth is

still not strong, though some positive signs are observed in accordance with a gradual

reduction of inflationary pressure.

"China also continues to struggle for momentum, partly due to still weak performance of

manufacturing," OECD said.

These observations are based on data from April-July 2013.

In May, OECD had revised downwards the India's growth estimate to 5.3 per cent for 2013

from 5.9 per cent. It had also cautioned that structural bottlenecks could further constrain

investment and growth potential.

The Wholesale Price Index-based inflation fell to 4.7 per cent in May, driven mainly by

decline in prices of manufactured items. Inflation based on the Wholesale Price Index (WPI)

stood at 4.89 percent in April. In May, 2012, it was at 7.55 per cent.

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Meanwhile, the grouping today said that CLIs (in May) for the United States and Japan

continue to point to economic growth firming. "In the euro area as a whole, CLI continues to

indicate a gain in growth momentum," it added.

Plan panel may cut 12th Plan growth target to 7% from 8% (FE 15.7.13)

In view of continued economic slowdown, Planning Commission may reset annual average

growth rate target to 7 per cent for the 12th Plan (2012-17) in the mid-term review of the

five-year policy document. According to sources, the Commission has already started the

process of mid-term review of the 12th Five Year Plan and is considering reducing the target

as it may not be possible to achieve the targeted 8 per cent growth in view of global and

domestic factors.

The Commission will take into account the key data on industrial production and exports

released by the government on Friday to arrive at a conclusion. In a clear signal that Indian

economy is not out of woods, the data revealed contraction in industrial production and

exports coupled with near double digit retail inflation.

While the Index of Industrial Production (IIP) contracted by 1.6 per cent in May, the lowest

factory output in 11 months, the trade figures suggest 4.6 per cent decline in exports in June.

The retail inflation inched up to 9.87 per cent in June mainly due to rise in vegetable and fruit

prices. As per the CSO's estimates, the Indian economy grew at decade low rate of 5 per cent

in the 2012-13, the first year of 12th Five year Plan. Besides, the government is expecting

economic growth of around 6.1 to 6.7 per cent this fiscal the second year of the five year

policy period.

According to experts, if the economy expands at around 6 per cent in the current fiscal then it

would have to grow by 9.66 per cent in the remaining three years of the 12th Plan which

seems unfeasible. They said that annual average economic growth rate target of 7 per cent in

the 12th Plan is likely as average growth of 8 per cent per annum in the remaining three years

of the policy period could be possible. The Commission has earlier also scaled down the

annual average growth rate of 9 per cent envisaged in the 11th Plan (2007-12) to 8.1 per cent

in view of the global economic meltdown that began in 2008.

According to official estimates, India achieved an economic growth rate of around 8 per cent

during the 11th Five Year Plan period. During the recent annual Plan discussions' with Chief

Ministers, Commission's Deputy Chairman Montek Singh Ahluwalia had sought inputs from

states for the mid-term review. The Commission is almost through with the annual Plan

outlay discussion with states. It has already approved outlays of 28 states for the current

fiscal. The Commission is likely to complete the process of approving state Plans with

finalisation of outlays of Uttar Pradesh and Chhattisgarh by this month.

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AGRICULTURAL POLICY

Minimum support price of kharif crops raised by CCEA (ET 28/6/2013)

As sowing picks up across the country, the Cabinet Committee on Economic Affairs (CCEA)

on Thursday approved increasing the minimum support prices (MSP) of kharif crops for

2013-14 crop year (July-June). The increase is expected to boost the sowing of paddy, cotton,

oilseeds like soybean, millets and pulses crop in the country. On the basis of

recommendations given by Commission for Agricultural Costs and Prices (CACP), the MSP

is increased. However, the agriculture ministry changed the proposal for bajra and tur/arhar.

"The agriculture minister's recommendation has been accepted by the CCEA," said a person

in the know after the CCEA meeting got over. The MSP of paddy, which constitutes more

than 60% of the kharif crop in the country, has seen a Rs 60 increase at Rs 1,310 a quintal for

common variety while for grade there has been a Rs 65 increase to Rs 1,345 per quintal.

Cotton prices for medium staple variety increased by Rs 100 to Rs 3,700 per quintal and Rs

4,000 per quintal for long staple.

Cotton sowing has been covered on 28.13 lakh hectares across the Northern and Western belt

of the country. Currently prices in the spot market were ruling at 4,100 a quintal. Till June 21,

kharif sowing picked up with the early onset of monsoon, crossing 109.07 lakh hectares, with

maximum area under sugarcane at 44.55 lakh hectares, followed by cotton at 28.13 lakh

hectares and paddy at 16.40 lakh hectares. The MSP of bajra as per agriculture ministry has

been kept at Rs 1,250 per quintal, an increase of Rs 75 per quintal from the 2012-13 seasons.

CACP had recommended no increase in the MSP for bajra this year.

Similarly, tur/arhar MSP price has been kept at 4,300, an increase of 450 from the original

recommendation of CACP of Rs 3,850 a quintal. This is expected to lead to an increase in

pulses acreage. Sources said that with imported pulses prices cheaper than the domestic price,

there could be a likely 10% import duty imposed on the pulses to help the domestic farmers.

Moong prices saw a rise of 100 to touch Rs 4,500 per quintal. Urad prices remain similar to

the previous year with the MSP at Rs 4,300 per quintal. The increase has come at a time

when annual rate of inflation based on wholesale price index fell to 43-month low at 4.7%.

The MSP of yellow soyabean has seen a hike of Rs 320 to Rs 2,560 a quintal and for

soyabean (black) to Rs 2,500 a quintal a rise of Rs 300.

The MSP of sesamum have been increased by Rs 300 per quintal over the last year's MSPs

and have been fixed at Rs 4,500 per quintal. However, MSP of sunflower seed and nigerseed

have been kept unchanged at Rs 3,700 per quintal and Rs 3,500 per quintal.

Higher MSP to fuel food inflation: Experts (ET 28/6/2013)

The hike in the minimum support price (MSP) of agricultural items likepaddy for 2013-14

crop year will boost farm output but is also expected to fuel food inflation, experts said.

Government today raised the MSP of nine farm items, including some pulses and oilseeds, in

the range of Rs 60-450 per quintal for the 2013-14 crop year (July-June), while the price for

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five crops like urad and ragi were kept unchanged.

Currently, farmers are sowing kharif crops. The announcement of MSP will help farmers

decide which crop to sow for better returns.

"Increasing the MSP could raise the crop area further. However this could also lead to turning

these items costlier - leading to higher Inflation," brokerage firm Religare Secritiessaid in a

statement.

The main purpose of a rise in MSP is to provide better remuneration to farmers. Apart from

that, it would also encourage farmers to produce more of these crops resulting in increased

sowing area, it said.

Rainfall activities, which have been very good so far in most parts of India, are going to help

the sowing activities of the Kharif crops. July and August months too remain critical as too

many excess or deficient rains could hamper the productivity of the sown crops, it added.

Another brokerage firm Angel Broking said that the substantial increase in the support price

of oilseeds and pulses will lead to shift in area to these crop from cotton this year.

"Cotton may lose acreage to more lucrative crops like oilseeds and Pulses," it said.

Inflation was 4.7 per cent in May, while in food articles category it was 8.25 per cent.

Food Bill: Govt takes ordinance route; Opposition cries foul (BL 03/7/2013)

The Government took the ordinance route to implement its ambitious Food Security Bill,

after efforts to have a debate in Parliament failed.

“The Food Security Ordinance was unanimously approved by the Cabinet. We are going to

the President today itself for his assent,” said Food Minister K. V. Thomas, after the Cabinet

meeting. The ordinance will be promulgated once the President signs it.

A pet project of Congress President Sonia Gandhi, the Food Security Bill aims to give legal

rights to 67 per cent of the population over a uniform quantity of 5 kg foodgrains a month at

Rs 1-3 a kg. Considered a vote-catcher, the Bill seeks to provide cheaper foodgrains to

around 80 crore people at an initial annual cost of around Rs 1.25-lakh crore.

Currently, the Government incurs a subsidy burden of about Rs 1-lakh crore in providing

subsidised foodgrains to the poor through the public distribution system. The implementation

of the Bill would also increase foodgrain requirement by around seven million tonnes to

about 61.23 million tonnes.

“We have enough foodgrains stocks and can start issuing them immediately,” a Food

Ministry official said. “We have asked the States to be prepared to implement the Bill. The

State Governments will have to take up the identification of the beneficiaries,” he added.

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The Government decided against convening a special session of Parliament after failing to

get any assurance from the Opposition and after its supporter, the Samajwadi Party, conveyed

to the Centre that it will not support the Bill.

After a series of discussions in the Congress core group, the leadership reached a consensus

to take the ordinance route. The party felt that the Opposition would not allow passage of the

Bill in Parliament, as it could become the Congress’ trump card in the general elections next

year.

Reacting to the Cabinet’s decision, the BJP said the Government was running away from

Parliament, while the CPI (M) said it would oppose the ordinance on the floor of the House.

Welcoming the Centre’s step, the Congress said Bill’s implementation would help the poor

The Centre will have to bring the ordinance in Parliament in the monsoon session, scheduled

to begin on July 22. But with the Opposition parties gearing up to raise a number of issues

against the Centre, a proper debate in the House during the session seems a far cry.

National Food Security Ordinance: Salient points (BS 6.7.13)

The ordinance provides for grievance redressal mechanism and penalty for non-compliance

by public servants

The National Food Security Ordinance, promulgated by President Pranab Mukherjee, aims to

give right to subsidised food grain to 67 percent of India's 1.2 billion people, and will ensure

food and nutritional security, said an official statement Friday.

The ordinance, with a special focus on the needs of the poorest of the poor, women and

children, provides for grievance redressal mechanism and penalty for non-compliance by

public servants or any authority, the statement said.

The salient points of the ordinance are:

Up to 75 percent of the rural population and up to 50 percent of the urban population will

have uniform entitlement of five kg food grain per month, at highly subsidised prices of Rs.3,

Rs.2, Re.1 per kg for rice, wheat and coarse grains, respectively.

The poorest of poor households would continue to receive 35 kg food grain per household per

month under the Antyodaya Anna Yojna at subsidised prices of Rs.3, Rs.2 and Re.1.

State-wise coverage will be determined by the central government.

The work of identification of eligible households has been left to the states/Union Territories,

which may frame their own criteria or use Social Economic and Caste Census data, if they so

desire.

There is a special focus on nutritional support to women and children. Pregnant women and

lactating mothers, besides being entitled to nutritious meals as per the prescribed nutritional

norms, will also receive maternity benefit of at least Rs.6,000 for six months. Children in the

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age group of six months to 14 years will be entitled to take home ration or hot cooked food,

as per prescribed nutritional norms.

The central government will provide funds to states/UTs, in case of short supply of food grain

from central pool.

In case of non-supply of food grain or meals to entitled persons, the concerned state/UT

governments will be required to provide such food security allowance to the beneficiaries as

may be prescribed by the central government.

The central government will provide assistance to the states towards cost of intra-state

transportation, handling of food grain and fair price shop (FPS) dealers' margin, for which

norms will be developed.

The ordinance also contains provisions for reforms in the Public Distribution System (PDS)

through doorstep delivery of food grain, application of information and communication

technology (ICT) including end-to-end computerisation, leveraging 'Aadhaar' for unique

identification of beneficiaries, diversification of commodities under the Targeted PDS

(TPDS) for effective implementation of the ordinance.

The eldest woman in the household, of 18 years of age or above, will be the head of the

household for the issue of the ration card. If the eldest woman is not available, the eldest male

member is to be the head of the household.

There will be state and district level redressal mechanism with designated officers. The states

will be allowed to use the existing machinery for District Grievance Redressal Officer

(DGRO), State Food Commission, if they so desire, to save expenditure on establishment of

new redressal set-up. Redressal mechanism may also include call centres, helpline etc.

Provisions have also been made for disclosure of records relating to PDS, social audits and

setting up of Vigilance Committees in order to ensure transparency and accountability.

The Bill provides for penalty to be imposed on public servants or authority, if found guilty of

failing to comply with the relief recommended by the District Grievance Redressal Officer

(DGRO).

Food Ministry in favour of 7.5 per cent import duty on pulses (ET 8.7.13)

The Food Ministry is in favour of a 7.5% import duty on pulses as against 10 per cent

suggested by the Commission for Agriculture Costs and Price.

The Food Ministry is in favour of a 7.5 per cent import duty on pulses as against 10 per cent

suggested by the Commission for Agriculture Costs and Prices (CACP) to boost domestic

production.

India, the largest producer of pulses, imports about three million tonne of lentils every year to

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fulfil its domestic demand. Pulses imports are being permitted at zero duty since 2006 to

ensure availability here.

"The Food Ministry has taken note of the CACP's recommendations on pulses. It is in favour

of raising import duty to 7.5 per cent," a senior government official told PTI.

The import duty hike is necessary at this point to protect domestic farmers because imported

pulses like tur have become cheaper as compared to the domestic, especially after the hike in

the minimum support price (MSP), he said.

The government has made some progress in increasing pulses production through higher

MSP in last few years and the Agriculture Ministry fears the pulses sowing could affect if

cheap imports flood the market and distort prices, he added.

According to industry data, traders are importing tur at Rs 3,300-3,500 per quintal from

Myanmar currently, while domestic prices are ruling at Rs 4,300 per quintal.

The official further observed that the other reason for proposed restriction in shipments is that

cheap imports are encouraging some traders to push the same for sale at an MSP rate to

government body NAFED's support price programme.

CACP, which recommends support price for agriculture commodities, had recommended 10

per cent import duty on pulses in its report on kharif 2013-14 crops to boost local output.

Apart from private traders, state-owned trading firms MMTCBSE -4.95 %, PEC, STC and

cooperative major Nafed import pulses. The major suppliers are Canada, Myanmar,

Australia, the US, Tanzania and Mozambique.

Pulses are grown in both the kharif (summer) and rabi (winter) season. Presently, farmers are

preparing for sowing of kharif pulses.

At Rs 1, 25,000 cr, Food Security Bill largest in world: Implementation a challenge, says

Morgan Stanley (ET 09/8/2013)

Full-scale implementation of theFood Security Bill would be a challenge this financial year,

foreign brokerage Morgan Stanley said today.

"A full-scale implementation of the new food scheme in FY2014 looks challenging. The

states need to identify the beneficiaries and set up the required infrastructure," a note from the

brokerage said and specifically pointed out the process will take time.

Given the limited window available for implementation, the government's target to cap

subsidies at 0.8 per cent of GDP will go up by up to 0.2 per cent of GDP this fiscal, it said,

adding that the subsidies outflow will increase in the subsequent years, once the scheme is

rolled out in full.

"We believe the government will need to create room for a rise in food subsidy burden by

cutting its expenditure (including subsidies) in other areas to ensure that fiscal

deficitmanagement is not compromised," it said.

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It may also lead to some impact on the farm sector as the Bill's focus on cereal and foodgrain

production "may distort the farm production structure by not providing the right incentives

for other crops such as pulses, oilseeds and cash crops," the note adds.

The Cabinet last week decided to take the ordinance route to implement the Food Security

Bill, which aims to give the nation's two-thirds population the right to 5 kg of foodgrain every

month at highly subsidised rates of Rs 1-3 per kg.

President Pranab Mukherjee last week signed the Ordinance that guarantees 5 kg of rice,

wheat and coarse cereals per month per person at a fixed price of Rs 3, 2, 1, respectively.

The country will join select league of countries in the world that guarantee majority of its

population foodgrain. At Rs 1,25,000 crore of government support, the food security

programme will be the largest in the world.

Govt notifies sugar import duty hike to 15% from 10% (ET 9.7.13)

The sugar imports have been putting pressure on domestic prices and have prevented millers

from clearing cane arrears to farmers.

The government today hiked import duty on sugar to 15 per cent from 10 per cent to help the

industry clear Rs 9,000 crore cane arrears to farmers-- a move that would make the sweetener

costlier for the common man.

In a notification issued by the Central Board of Excise and Customs (CBEC), the duty of both

raw and white (refined) sugar have been raised to 15 per cent.

The sugar imports have been putting pressure on domestic prices and have prevented millers

from clearing cane arrears to farmers.

Currently, millers in Uttar Pradesh are selling sugar to wholesalers at rates lower than even

the production cost, according to the industry experts.

The hike in duty is aimed at curbing import of sugar and improving the bearish sentiment in

domestic market. This would, however, lead to rise in sugar prices across the country.

Currently prices of sugar (loose) is ruling at Rs 40 per kg and packed sugar at Rs 50/kg in

Delhi.

Finance Minister P Chidambaram, Agriculture Minister Sharad Pawar and Food Minister K

V Thomas had a meeting on July 4 to review the import duty. After the meeting Thomas had

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said there was an agreement to increase the duty to 15 per cent to help industry in clearing

outstanding payments to sugarcane farmers, which have risen to Rs 9,000 crore from Rs

5,000 crore in the last one year.

Industry associations like ISMA and NFCSF have been demanding a hike in import duty to

30-40 per cent, saying the country is having surplus sugar production.

5 worries about food security law (ET 11/7/2013)

Overflowing godowns and widespread hunger can justify the Food Security Law. But there

are negatives as well. ET takes a look at the flip side.

CCEA may decide on extra 5 million ton grains for BPL families tomorrow (ET 11.7.13)

CCEA may decide on extra 5 million ton grains for BPL families tomorrow

The CCEA is likely to consider tomorrow a proposal to allocate an additional 5 million

tonnes of foodgrains to families below the poverty line (BPL), entailing a subsidy of about Rs

9,470 crore.

"The Cabinet Committee on Economic Affairs meeting is scheduled for tomorrow. The Food

Ministry's proposal on allocation of an additional 5 million tonnes of foodgrains to BPL

category for the 2013-14 fiscal is on the agenda," highly placed sources said.

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As per the Cabinet note, the additional foodgrains would be supplied at BPL rates and would

cost the government about Rs 9,470 crore, they said.

The ministry said in the note that the extra foodgrain allocation would be adjusted in states

where the new Food Security programme will be implemented, they added.

The Delhi government has started the groundwork for implementing the new programme

from next month.

The ministry proposed the extra allocation for 6.52 crore BPL families because the

government has excess stocks of foodgrains.

As of July 1, foodgrain stocks in government godowns more than doubled to 73.9 million

tonnes, compared with a requirement of 31.9 million tonnes.

For APL families, the government had in May allocated 6 million tonnes of extra foodgrains

for this fiscal. Last month, it had approved the sale of 10.5 million tonnes of foodgrains in the

open market to check rising prices.

The government supplies rice and wheat at subsidised rates of Rs 5.65 per kg and Rs 4.15 per

kg, respectively, to BPL families.

Arun Maira slams Food Security Ordinance as unsustainable (ET 17.7.13)

"Government should focus on creating more jobs and more employment as the way to

inclusion rather than hand-outs,” Arun Maira said.

Planning Commission member Arun Maira has lashed out at the government's Food Security

Bill, saying that such a form of inclusion is not sustainable as it will have a big effect on

fiscal deficit in coming years. "The government needs to change its orientation towards

inclusion if we want a more inclusive, more sustainable and faster growth. If inclusion is to

give hand-outs to those, who currently do not have enough, it is not sustainable because the

money to give that hand-out will come from the economy," Maira said on the sidelines of a

Ficci event on Empowering India. "This will result in a bad situation for the fiscal deficit in

the fifth year of the current plan period," he said.

According to Maira, there are people who do not want handouts. "They want good life and

good income. Hence government should focus on creating more jobs and more employment

as the way to inclusion rather than hand-outs. The idea should be to continue putting inputs

into people in terms of doing much more for health and education and also create

opportunities for them to earn and live a dignified life," he added.

Credit rating agency had recently estimated that the fiscal deficit for the year could rise to 5.1

per cent from the previously estimated 4.8 per cent, largely on account of this ambitious

scheme of the government. Centre had recently brought in an ordinance for Food Security

Bill, which has drawn lot of criticism from the opposition who feels the haste on the

government's part is in its preparations for the general elections in 2014.

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The programme gives the nation's two-thirds population the right to highly subsidised rates of

Rs 1-3 per kg. The government would require 62 million tonnes of food grain to implement

this programme, costing the exchequer Rs 1,25,000 crore annually.

President asks ICAR to bring clarity on safety concerns of GM crops (ET 17.7.13)

He also suggested that safety concerns attached to GM crops should be addressed by

following global norms.

President Pranab Mukherjee today said introduction of genetically modified (GM) crops

would revolutionise agriculture sector and asked agri-research body ICAR to bring clarity on

safety concerns of these crops.

He also suggested that safety concerns attached to GM crops should be addressed by

following global norms.

"Development and introduction of GM crops has the potential to revolutionise agriculture.

The concerns over their perceived risks should be addressed by following internationally

accepted procedures for assessing safety parameters," Mukherjee said at the 85th ICAR

Foundation Day.

He said that the Indian Council of Agricultural Research (ICAR), which is involved in

developing useful products and technologies in this field, "must contribute to the public

discourse and provide clarity on this sensitive issue".

The government has allowed commercial cultivation of Bt cotton, while moratorium has been

put on Bt brinjal. Permission has been given to private companies to conduct field trials of

GM crops such as cotton, corn and maize in Punjab, Haryana, Andhra Pradesh and Gujarat.

India has transformed from being a food-deficient to food -surplus country, Mukherjee said,

but cautioned that climate change poses a major challenge to agriculture and the country must

chalk out a climate resilient development strategy.

To achieve 4 per cent farm growth per annum during the 12th Five Year Plan (2012-17),

Mukherjee suggested that the focus must be on productivity-driving measures such as

diversification of crops, adoption of high yielding hybrid seeds, and improvement in water

management practices.

The farm growth in the 11th Five Year Plan period was driven by improved farm prices.

However, during the 12th Plan period the growth in demand for major crops is projected to

slow down. "We have to achieve higher productivity levels to attain the agri-growth target for

this Plan," he added.

Noting that Indian agriculture has become more resilient, Mukherjee said: "Despite our

country facing two severe droughts during the last decade, our agricultural production

remained well above the 200 million tonne mark of grain production... Yet, there are

challenges that lie ahead."

16

He observed that small land holdings of less than 2 hectares restrict full potential of

production. Hence, it was necessary to spur productivity through development of low- cost,

light-weight, multi-purpose farm equipment.

Mukherjee emphasised on mechanisation of small farms to mitigate labour shortage and

asked research institutions to develop energy efficient farm equipments with use of renewable

energy models like solar power. He also asked the research institutions to focus on

developing suitable post-harvest technologies to reduce farm wastage and contribute for

development of agro-processing.

Noting that farm sector growth is crucial for the economy, the President said, "...Some studies

have indicated that a one percentage growth in agriculture is 2-3 times more effective in

reducing poverty than a one percentage growth in non-farm sectors." The average growth rate

in agriculture and allied sectors was 3.6 per cent during the 11th Five Year Plan, he added.

Mukherjee also launched the Kisaan SMS portal that will provide information on weather

forecast and advisories on disease outbreak to farmers.

Farmers will need to register for this service by calling Kisaan Call Centre on the toll free

number 1800-180-1551 or through the web portal. They can also access the website directly.

On SMS portal, Agriculture Minister Sharad Pawar said this initiative will enable farmers

across the country to receive farm related information and advisories as per their needs and

location in their own language. It is a unique initiative and the biggest ever SMS portal

created in the government sector, he added.

On the occasion, the ICAR awards for 2012 were also given to outstanding institutions,

scientists and journalists.

WTO to discuss India’s proposal to hike food subsidy limits (BL 18/7/2013)

A relaxation in farm subsidy limits at the WTO is important for India because once the Food

Security Act is implemented across States shortly it may lead to a breach of existing subsidy

limits and attract penalties at the multilateral forum. India is hoping that a decision on the

matter will be taken at the forthcoming WTO Ministerial meet in Bali in December.

“We have made it clear to the developed members of the WTO that we will have to give out

increased subsidies to our poor now that we are implementing our Food Security Act. WTO

rules should not stop us from doing our duty towards the poor,” a Commerce Department

official told Business Line.

The Agreement on Agriculture allows so-called ‘market distorting subsidies’ up to a limit of

10 per cent of total production. While such subsidies were negligible in India during the

Uruguay Round in the late eighties and early nineties when these rules were being framed, it

is now hovering close to the limits set and could be breached soon.

The proposal, which is being pushed at the WTO by the G-33 group of developing countries

of which India is an active member, calls for an amendment in the WTO’s Agreement on

17

Agriculture to loosen disciplines on

domestic support, including public

stockholding and food aid, in order to

enhance food security by supporting poor

farmers and consumers.

The G-33 is trying to build consensus

around its proposal before the Bali

Ministerial, so that the entire membership

can endorse the amendment in the

Agriculture Agreement.

Consensus is slowly building on the

proposal with developed members

including the EU, Norway and Australia

agreeable to support it provided the G-33

makes some amendments in its proposal

to ensure that the flexibilities are not

misused by any country.

While the dead-locked Doha Round of

the WTO does not seem anywhere close

to being re-started, members are trying to

get an agreement on some key issues at

Bali including food subsidies and trade

facilitation.

Edible oil refineries cry for protection

(BS 19.7.13)

Say price of crude palm oil import higher

than refined product, leading to raising

inflows

Refined palm oil import is available for

$13.4 a tonne less than crude palm oil (CPO). The vegetable refining industry has called for

government intervention to reverse this.

The spread between the import prices of CPO and refined, bleached and deodorised (RBD)

oil was the other way round only a while before — as much as $92.6 a tonne costlier for the

latter at Indian ports, complains the refining industry.

They say the main exporting nations of Malaysia and Indon-esia have ensured a higher export

duty on crude and a lower one on refined oil. Meanwhile, the Indian government has kept the

import levy unchanged at 7.5 per cent on RBD. As a result, complains the industry, the share

of refined oil in the overall edible oil import basket has jumped to 40 per cent since April. It

was about 15 per cent some months earlier.

18

“The share of RBD will climb to 60-70 per cent by the end of the current oil year (October)

and to 80 per cent by December if the Government of India does not raise import duty,” said

Dorab Mistry, director of Godrej International.

Refineries in India have invested around Rs 10,000 crore for creating 15 million tonnes of

annual refining capacity and employ hundreds of thousands directly and indirectly, urges the

segment.

It says we should note the way the two major producers protect their refining industry.

Malaysia allows CPO export only under a quota. As for Indonesia, since October 2011, its

export tax on CPO is much higher than on refined oil. The export duty rates are changed each

month, in line with market prices — if palm oil prices increase, the export duty will go up.

Thus, the differential duty works out to be higher on export of CPO than on RBD.

“While Malaysia and Indonesia, the two biggest exporters of palm oil, have subsidised their

refiners, the Indian government has moved in the opposite direction. In January this year, it

imposed a duty of 2.5 per cent on CPO, thereby lowering the duty differential between

imported and refined oil to five per cent from the earlier 7.5 per cent. This despite the fact

that a committee headed by former chief economic advisor Ashok Lahiri had recommended

in 2006 that the duty differential be maintained at 13.5 per cent,” said Dinesh Shahra,

managing director of Ruchi Soya Industries.

India imports 55 per cent of its 16.5 million tonnes of annual edible oil consumption. Since

domestic oilseed output has been almost unchanged for several years, import reliance has

risen with a sustained increase in domestic consumption.

The government should raise import duty on both refined and crude palm oil to keep the

difference at a minimum of 20-25 per cent, according to B V Mehta, executive director of the

Solvent Extractors’ Association

Maharashtra mulls new sugarcane Act (BS 19.7.13)

A separate panel comprising members of cane growers, factories to fix cane price

The Maharashtra government has proposed to bring in a new law for the purchase and supply

of sugarcane in the state.

The proposed Act would be on the lines of the Karnataka Sugarcane (Regulation of Purchase

and Supply) Act, 2013. The decision in this regard was taken on Wednesday at a meeting

between the state government and representatives of cooperative sugar factories.

The Karnataka government has proposed the establishment of a Sugarcane Control Board

comprising ministers, bureaucrats, sugarcane growers and factory owners.

Maharashtra, however, has suggested such a board should be headed by a retired judge and

representatives of cane growers and factories and should not have ministers, as it might lead

to conflict of interest.

According to the new law, it would be binding on the sugar factory to pay cane price within

14 days to the growers and the payment would be made on the basis of the recorded weight of

the cane at the factory. The Karnataka Act envisages rigorous imprisonment for one year or a

fine if any person contravenes any provision. Similar provisions can be made in the proposed

19

Maharashtra's legislation.

A senior minister, who did not want to be identified, told Business Standard, “So far, two of

the total 10 recommendations made by the Rangarajan Panel on sugar decontrol have been

accepted. These include the removal of the sugar levy obligation and 70 per cent of the

revenue earned by the individual sugar factory (producing only sugar) being distributed

among sugarcane growers. Besides, 75 per cent of revenue would be shared by the individual

factory producing both, sugar and by products, with cane growers. The Karnataka Act

envisages regulation of the purchase and supply of sugarcane required for use in sugar

factories in Karnataka. On similar lines, a new legislation would be tabled in the legislature.”

The minister said currently, sugarcane price in Maharashtra is decided by the ministers’

committee, which has no legal or statutory base. The minister said the government asks sugar

factories to pay as per the fair and remunerative price fixed by the Centre.

"Until Centre came out with the fair and remunerative price formula, cooperative factories

were paying statutory minimum price fixed by the state. However, in view of agitation

launched by various farmers organizations sugar factories started providing higher than the

statutory minimum price and now fair and remunerative price. This has turned balance sheet

of a large number of cooperative factories red and their net worth became negative," the

minister added.

According to the minister, if the factory pays more than fair and remunerative price it attracts

income tax.

Former cooperation minister Shankarrao Kolhe said the new legislation is a need of the hour

to avoid confrontation between the various organizations of cane growers and sugar factories.

With the new act, the representatives of cane growers will be party to the decision on price

for the procurement and supply. Factories want the state government to table the legislation

in the ongoing monsoon session of the state legislature. This will come quite handy to avoid

agitation ahead of next curshing season begins on November 1," he noted.

Government likely to ban onion exports to check prices (ET 21.7.13)

"We are keeping a close watch on onion prices. We are thinking (of) various options

including ban on onion export to control prices," a senior government official said.

Wary of steep rise in onion prices that could further push up food inflation, government may

ban export of the commodity to improve domestic supply and keep rates under check.

"We are keeping a close watch on onion prices. We are thinking (of) various options

including ban on onion export to control prices," a senior government official said.

20

Both wholesale and retail prices of onion, a politically sensitive commodity, have risen

sharply in the past few weeks in most markets due to supply constraints following heavy

rains in producer states like Maharashtra.

The retail price of onion has touched Rs 30-40 per kg in Delhi, while the wholesale price has

increased to Rs 25 per kg at Lasalgoan in Maharashtra, Asia's biggest onion market.

According to official data, India has exported 5,11,616 tonnes of onion amounting Rs 776.47

crore in first quarter of the fiscal against 5,17,274 tonnes in year-ago period.

Experts said there is a possibility of ban on onion exports as the government is left with no

option to control shipments at present. Earlier, it used to tweak the minimum export price

(MEP) of onion in the event of price rise. But the MEP has been scrapped since last year.

They, however, said it would be a tough call for the government to ban shipments at a time

when it is pushing for exports to reduce current account deficit.

India exports 10 per cent of its total onion output. Much of it is shipped to Bangladesh,

Malaysia and Singapore.

Fresh supply of northern variety of onion has been exhausted and demand is being met

through old stocks.

"Onion prices are expected to be under pressure till next month because new crop from

Maharashtra, Andhra Pradesh Karnataka and Rajasthan is expected to hit market from

October onwards," an official from Nasik-based National Horticultural Research and

Development Foundation ( NHRDF) said.

Although production is expected to be normal at around 15-16 million tonnes this year, lower

crop in states like Tamil Nadu has put pressure on Maharasthra.

Government may release food grains stock to tame inflation: KV Thomas (ET 22.7.13)

The government is likely to release food grains from its stocks in order to bring down soaring

food prices, Union Minister of State for Consumer Affairs and Food and Public Distribution

K V Thomas said here today.

"In the last few years the minimum support price has doubled. The consumption pattern has

also changed along with rise in price of petroleum and petroleum products.

"So to bring down the price of food, the EGoM will analyse the situation and take action that

will help ease the situation. We may even release food grains from the government stocks to

control the food inflation," Thomas said here at a function.

21

He said the government was contemplating launching a system that will regulate the export

and import duty of onion and potato, whose prices are fluctuating.

"A practical system has to be worked out to control the prices of onion and potato, whose

prices are volatile. We will look into regulating it through export and import duty," the

minister said.

"We have been in discussion with various state governments (on) how to reduce the wastage

of horticultural produce as they rot during the peak season. For this, Nafed can store the

produce during the peak season, which can later be distributed," he said.

To a query on whether the Food Security Bill once passed, will affect the rice and wheat

exports, Thomas said," the government needs 62-64 million tonne for the food security per

year. When we calculated we found that this is only 35 per cent of what we produce. So,

there will be enough food grains available for food security and other domestic consumption

and for exports."

The implementation of food security bill is fraught with bringing additional fiscal pressure

and widening fiscal deficit to five per cent of GDP in the current financial year.

Earlier this month, the government had promulgated an Ordinance to implement the Food

Security Bill.

Government's spending on the programme is estimated at Rs 1,25,000 crore annually for

supplying about 62 million tonnes of rice, wheat and coarse cereals to 67 per cent of the

population.

Elaborating on the issue, Thomas said many states had apprehensions on whether they will

get less than what they were getting. "And after discussions we found that all the states will

benefit from this."

"States like Maharashtra has apprehensions that whether they will get less than what they

were getting after the Food Security Bill is passed. After discussions we found that they will

be, in fact getting more than what it is getting now. So will all the states," he said.

The government will give 25 kgs food grains, including rice, wheat and millet, at Rs 3 a kg,

Rs 2 and Rs 1 respectively, a month depending on the need, which will be a legal right for

people under below the poverty line.

Put genetically-modified crop trials on hold for now: Supreme Court Panel (ET 23.7.13)

A technical committee appointed by the Supreme Court (SC) has recommended an indefinite

moratorium on open field trials of genetically-modified (GM) crops till the deficiencies in the

regulatory and safety systems are effectively addressed.

A technical committee appointed by the Supreme Court (SC) has recommended an indefinite

moratorium on open field trials of genetically-modified (GM) crops till the deficiencies in the

regulatory and safety systems are effectively addressed. The recommendations, if accepted by

22

the court, would have a serious impact on the commercialisation of GM crops. In its final

report, which was submitted to the court last week, the six-member committee reiterated the

recommendations made in its interim report last October.

"Based on the examination of the safety dossiers, the Technical Expert Committee has found

in unambiguous terms that at present, the regulatory system has major gaps and these will

require rethinking, investment and relearning to fix. These need to be addressed before issues

related to tests can be meaningfully considered. Till such time, it would not be advisable to

conduct more field trials. A deeper understanding of the process of risk assessment is needed

within the regulatory system for it to meet the needs of a proper bio-safety evaluation," the

final report states.

On Bt food crops intended for commercialisation, the committee has reiterated that there

should be a moratorium on field trials until there is a definitive number of studies on their

long-term study. The 10-year moratorium suggested in the interim report has been dropped.

Of the 91 applications for field trial before the GEAC, 44 are GM food crops.

The committee felt that the safety of Bt food crops particularly on the issue chronic toxicity

has not been established. "This needs to be done before it can be considered safe," it said. The

report stressed that the largest deployment of transgenics world-wide is in soybean, corn,

cotton, and canola, all of which are used primarily for oil or feed. "Nowhere are Bt-

transgenics being widely consumed in large amounts for any major food crop that is directly

used for human consumption. The TEC could not find any compelling reason for India to be

the first to do so," the committee's final report states.

The report makes the case that the quality of information in several of the applications is far

below what is required for rigorous evaluation by a regulatory body and is unlikely to meet

international regulatory guidelines. The committee has suggested setting up a secretariat

comprising dedicated scientists with area and bio-safety expertise. It has suggested

collaborating with the Norwegian government and the GM regulatory body as it "is one of the

few that are attuned to considering socio-economic issues that would be important in the

Indian context." It recommends that the new bio-technology regulatory be housed in the

environment and health ministry, identification of specific sites for conducting of field tests

and mandatory stakeholder participation as part of risk-management strategy. The Technical

Expert Committee suggested that trials should be only allowed on land owned by GM crop

applicant and not on leased land.

23

RICE

Gujarat does it again; ranks top in least paddy distortion (BS 29.6.13)

States with the worst market distortion procure over 60% of the crop

Gujarat, a marginal contributor to India’s overall annual rice production, tops the list of states

having the least distorted rice markets, according to the first ever

ranking of states on the basis of degree of market distortion for rice,

done by the Commission for Agricultural Costs and Prices (CACP).

Interestingly, top rice producing states such as Chhattisgarh,

Punjab, Haryana, Odisha, Andhra Pradesh, and Uttar Pradesh have

the most distorted market for the same.

Chhattisgarh, which has emerged as one of the biggest producers of

paddy in India, is ranked the lowest among the 18 states where rice

is mainly grown during the kharif season. In 2011-12, Chhattisgarh

produced almost six million tonnes of rice, out of the total annual

production of 104 million tonnes.

“Interestingly, the eight states with most distorted markets with

respect to paddy and rice procured about 62 per cent of total

marketed surplus of rice in 2011-12. Thus, the magnitude of

distortion in the rice and paddy markets is clearly evident,” said

CACP in its report.

The ranking was part of its kharif price policy recommendations made by the Commission for

2013-14. The Cabinet on Thursday accepted the Commission’s recommendations to increase

the minimum support price (MSP) of paddy by Rs 60 a quintal for 2013-14.

West Bengal, India’s biggest producer of rice, was placed in the middle and was ranked the

ninth in the overall list. In 2011-12, Gujarat produced around two million tonnes of paddy.

According to the Commission, the degree of market distortion for rice has been calculated on

the basis of taxes/levies on rice as a percentage of MSP, bonus on paddy announced by the

state governments, rice procurement as a percentage share in rice production, stock limits of

paddy and rice, levy rice (which is to be distributed through the public distribution system),

and market reforms undertaken by the state government.

The Commission in its recommendations advised the state governments to get their markets

right and bring back the focus on establishing a single barrier free market, with minimum

controls.

“State governments need to facilitate setting up adequate infrastructure such as storage

facilities by the private sector, milling capacities; they also need to be discouraged from

embarking on a high procurement mission, as it discourages private sector participation. State

should come only as a last resort where the markets fail, and not take over the functioning of

markets as a first step,” said the Commission.

24

Punjab area under 'direct paddy' to rise 2.5 times (BS 4.7.13)

Area under direct seeding for paddy in state may touch 50,000 hectares in the ongoing kharif

season

Having got wider acceptance from farmers across the state, the area under direct seeding for

paddy in Punjab is likely to touch 50,000 hectares in the ongoing kharif season, a two-and-

half-fold rise on the last year. Direct seeding was on 20,000 hectares last year.

Direct seeding of paddy can save 25-30 per cent of water in the fields. It involves direct

sowing of seeds in the field. As a result, the yield per hectare rises. Besides, it reduces

cultivation cost by Rs 5,000-6,000 a hectare.

Traditionally, paddy is grown by planting seeds in a small nursery and then the saplings are

transplanted after four weeks to the cultivation area. The saplings are allowed to grow and the

fields are kept under three to four inches of water, to reduce weed growth. This 'puddle

irrigation' needs a lot of water. Since paddy cultivation is water-intensive, this has resulted in

a decline of the water table in Punjab.

Direct seeding has the environmental benefit of reducing emission of greenhouse gases such

as methane. Also, it improves soil porosity that can raise productivity of the succeeding crop.

Mangal Singh Sidhu, director, agriculture department of Punjab, said the state had started a

campaign to make farmers aware about the benefits of direct paddy plantation. Apart from

that government was also providing financial benefits to farmers and National Food Security

Mission for direct paddy plantation.

In Punjab, acting on the recommendations of Ludhiana-based Punjab Agricultural University

not only the state government is making efforts to reach out to farmers for wider acceptance

of the technology but also corporates, NGOs and even farmers are actively promoting this

technology.

With combined efforts the state government is hopeful that the total area under this

methodology would may cross 50,000 hectares during this season. It is expected that in the

the current season 27.50 lakh hectare areas would be covered under paddy cultivation, against

28.18 lakh hectares during the last season.

It is worth mentioning that in order to popularise the technology, Pepsico India in 2006,

started the direct seeding methodolgy and carried out trial in the fields of 12 farmers,

covering about 20 acres and now it covers about over thousands of acres under this

technology. Also, Bayer Crop Science, India and Punjab State Co-operative Supply and

Marketing Federation (Markfed) signed a formal MoU in 2010 to collaborate to promote and

develop complete package of Direct Seeded Rice in the state to save depleted water.

Iraq keen on sourcing basmati from India (FE 4.7.13)

After Iran emerging as India's biggest export destination for basmati, Iraq has also shown

interest in increasing the quantum of aromatic long-grain rice import from the country.

This could result in a jump in aromatic rice exports in the next two years.

25

Official sources told FE when external affairs minister Salman Khurshid met Iraqi

counterpart Hoshyar Zebari in Baghdad recently, both leaders discussed ways to strengthen

economic engagement, which included trade in basmati.

According to officials in the ministry of external affairs, Iraq is keen on procuring more rice

from India and this is expected to be discussed at length at the 17th Joint Commission

Meeting scheduled to be held on July 8-9 in Baghdad.

According to All India Rice Exporters Association (AIREA) data, India's Basmati rice

exports to Iran was in excess of 1 million tonne during 2012-13, while shipment to Iraq was

only about two lakh tonne. “There is a huge scope of increasing rice exports to Iraq as

consumers their have preferred rice imported from India,” Vijay Setia, former president,

AIREA told FE.

Setia said exports to Iran constitute more than 40% of the total country's basmati rice exports.

If Iraq starts sourcing more basmati from India, it could push the country's rice exports

further.

An industry source said with more than 10% rise in exports to Iran anticipated in the current

fiscal, the cumulative basmati rice exports from the country is likely to touch 3.4 million

tonne (mt) during current fiscal from close to 3 mt of shipment during 2012-13.

From an exports of about 2 lakh tonne in 2008-9, the shipment to Iran crossed the million-

tonne mark last fiscal and exporters are banking on repeating the same for Iraq as well.

“Iranian consumers have been favouring Indian basmati over any other rice. Iran annually

imports about 3 mt of rice from India and this includes non-basmati rice shipment also,” a

commerce ministry official noted. Besides Iran, other key destinations for basmati rice during

last last few years are Saudi Arabia, United Arab Emirates, Kuwait and Iraq.

“We are expected to get around Rs 17,000 crore from basmati rice exports in the last fiscal,”

a commerce ministry official said. In 2011-12, the country shipped aromatic and long-grained

rice worth Rs 15,450 crore. India emerged as the world’s largest exporter of rice (both

basmati and non-basmati) during 2011-12 and 2012-13, with close to 10 mt of rice exports.

Thailand exported 6.9 mt of rice, falling behind India and Vietnam, which sold 7.8 mt in

2011-12.

Mauritius gives nod for India’s basmati certification mechanism (ET 05/7/2013)

The adulteration issues hampering basmati exports to Mauritius may soon be sorted out.

Mauritius has said that there was a broad agreement on the certification mechanism proposed

by India and that it will revert soon.

Commerce and Industry Minister Anand Sharma raised the issue of basmati exports in his

bilateral meeting in Port Louis on Friday evening with Sayyad Abd-Al-Cader Sayed Hossen,

Minister of Industry, Commerce and Consumer Protection, Mauritius.

Last April, Mauritius had conveyed that basmati rice from India and Pakistan was being

adulterated by local traders.

In May 2013, a draft agreement for recognition of export inspection and certification system

of Export Inspection Council of India for export of basmati rice to Mauritius was forwarded

26

to the Ministry of Industry, Commerce and Consumer Protection of Mauritius. But, since

then, there has been no movement on the issue.

Sharma said India will be happy to extend any assistance on the issue.

Basmati rice is a unique Geographical Indication (GI) product under the World Trade

Organization (WTO).

Standards in India are dynamic in nature and are currently being harmonised amongst all

relevant institutions for ensuring uniformity which will be notified when ready.

Paddy growers asked to take steps against leaf folder, stem borer (BL 05/7/2013)

Farmers in Tamil Nadu have been advised to take adequate measures to protect their crop

from pest and disease.

The Centre for Plant Protection Studies at the Farm Varsity here has made a forecast of the

incidence of pest and disease in some of the major agricultural and horticultural crops for the

month of July.

The forecast is based on the pest and disease surveillance reports from different districts of

Tamil Nadu.

“It is expected to be below the Economic Threshold Level,” say CPPS experts.

Citing reports, the experts said leaf folder and stem borer have been noticed in the paddy crop

in Tirunelveli, Dharmapuri, Dindigul, Pudukottai and Salem districts.

“Set up light trap to attract and kill the adult moth and if need be spray neem seed kernel

extract,” CPPS experts suggested.

For managing thrips in the nursery and in early transplanted rice, farmers have been

recommended to spray Phosphamidon 40 SL 50 ml for 20 cent nursery area.

Coastal area farmers have been advised to spray Kocide (Copper Hydroxide) for the

management of bacterial leaf blight in rice.

Groundnut farmers of Salem and Dharmapuri districts have been warned of Tikka leaf spot

and have been recommended to spray Carbendazim. Experts feel the incidence of sucking

pests such as jassids, thrips, whitefly and different species of mealybug, including papaya

mealybug, could be high in Erode, Thanjavur, Sivagangai and Tirupur districts.

Farmers have been asked to install yellow sticky traps and spray neem seed kernel extract if

needed to get rid of these pests.

Those raising vegetable crops such as tomato, bhendi, brinjal and cucurbits have been asked

to do summer ploughing and expose the main field to sunlight for 10-15 days to minimise the

incidence of nematodes.

Basmati seed at 100% premium over procurement price (BS 9.7.13)

27

Farmers rush to ensure seed amid fear of scarcity, acreage/output to increase 25% this year

on better exports realization last year

Encouraged by higher realization last year, farmers have rushed to ensure basmati paddy seed

to cover sowing in maximum possible area this kharif season. They fear scarcity may reduce

their potential of sowing area and thereby, chances of higher earnings.

To cash in on the farmers’ rush, stockists are selling basmati seeds at 100% premium over the

procurement price in major growing states including Punjab, Haryana and Uttar Pradesh.

According to trade sources, traditional basmati seed is selling between Rs 46 - 48 a kg

compared to Rs 22 - 23 a kg last year. Similarly, the sowing quality of Pusa basmati (PB 1)

and Pusa 1121 are quoted between Rs 38 - 39 a kg and Rs 41 - 43 a kg now as against Rs 19 -

20 a kg and Rs 20 - 21 a kg last year respectively.

Farmers’ excessive encouragement has not yet resulted into a shortage of seed, though.

Stockists are releasing seeds intermittently to derive a maximum benefit. Their enthusiasm is

set to result into additional acreage and automatically thereby, more output this year. Also,

exports especially of the Pusa 1121 variety would go up.

“We are estimating 20-25% higher acreage this season on farmers’ enhanced encouragement

over last year’s better realization. Also, early rainfalls this monsoon season have boosted

their sentiment positively,” said Vinod Ahuja, President of Basmati Rice Farmers and

Exporters Development Forum.

Data compiled by the Agricultural and Processed Food Products Export Development

Authority (APEDA) showed, exporters’ average realization shot up 16% at Rs 56.10 a kg in

2012-13 as compared to Rs 48.61 a kg in the previous year. In 2010-11, exporters’ average

realization was recorded at Rs 47.90 a kg. Similar increase was witnessed in realization from

domestic markets also.

The average cost price for growing basmati rice works out to Rs 16-17 a kg.

“Despite a significant increase in the minimum support price (MSP), cotton and sugarcane

disappointed farmers last year. With the increase in paddy MSP this year, a number of

farmers have evinced interest in shifting to basmati. Hence, the increase in area may

proportionately raise basmati rice output this year,” said Ahuja.

Interestingly, Punjab government has waived taxes on basmati rice which were as high as

12% across all varieties. “We can see at least 25% increase in acreage and therefore, a

proportionate jump in output of basmati rice,” said Gurnam Arora, Joint Managing Director,

Kohinoor Foods Ltd.

Total area under basmati paddy sowing was recorded at 2.25 million hectare (ha) with an

estimated output of 6 million tonnes. From this, however, around 4.8 million tonnes of

basmati rice can be obtained with an average recovery of 80%.

India exported 3.46 million tonnes of basmati rice realizing thereby, Rs 19,390 crore in 2012-

13 as compared to 3.18 million tonnes and Rs 15450 crore in the previous year.

28

Vijay Setia, former president of All India Rice Exporters’ Association, however is convinced

that the acreage would be much higher this season on assumption of higher demand from

countries like Iran, Saudi Arabia, UAE and other Arab nations in addition to the existing

developed countries would continue.

Weak rains cloud paddy outlook for eastern region (ET 23.7.13)

Paddy farmers in eastern India are a bit worried over erratic rainfall this year. The spread of

the rainfall has not been uniform across the region which has prompted states like West

Bengal, Bihar, Jharkhand and Odisha to prepare contingency plans if the trend continues for

long. The states are looking at options such as short-duration crops and direct seeding as

possible ways of growing paddy in the absence of good rains critical for preparing nurseries

and subsequent transplantation of the crop to the field.

The eastern region has witnessed deficit rainfall since the monsoon season kicked off this

year. According to data provided by India Meteorological Department (IMD), the region has

received 20%-59% less rainfall in the period beginning June 1.

Dr Trilochan Mohapatra, director, Central Rice Research Institute (CRRI) told ET: "The

situation is not yet alarming. There were rains in the beginning of the season which helped in

the preparation of seedbeds in some parts of the states. However, rains have since been erratic

and there has been no uniformity in this year's monsoon pattern. The states are ready with

contingency plans if rains are unusually delayed. We are keeping a close watch and advising

the states accordingly. Our scientists are constantly visiting the states and reviewing the

situation."

The worst affected is West Bengal, the leader in rice production from eastern India. The state

produces 15.4 million tonne of rice. State agriculture director Paritosh Bhattacharya said,

"The state is 35% deficient in rainfall vis-a-vis 28% in the same period previous year.

However, we had good rainfall in May and June and our reservoirs are in good shape. We

have already prepared a contingency plan and advised farmers to go in for community and

staggered seed beds. In case, the rainfall is delayed or there is less rainfall, we can use the

water from reservoirs for the transplantation of paddy seedlings."

For the farmers, the most preferred option is direct seeding that involves sowing seeds

directly in the fields. This is different from the more popular method in which seeds are first

germinated in a nursery for up to four weeks and then the saplings are transplanted.

"Jharkhand and Bihar have not received enough rainfall for preparing the nurseries. We have

advised farmers in these states to go in for direct seeding. Short-duration crop is another

option before them. We are hoping that the situation will change and the monsoon will come

with full force. IMD has not yet indicated any unnatural trend in monsoon this year," said Dr

Mukund Wariar, officer in charge, Central Rainfed Upland Rice Research Station.

Eastern states contribute 55 million tonne of rice to the country's total production of 104.32

million tonne and the bulk of it is produced during the kharif season. Production in the region

has increased by 30% in the last three years after the UPA government launched the

"Bringing Green Revolution to Eastern India" (BGREI) programme in the seven eastern

29

states. The seven eastern states are West Bengal, Bihar, Assam, Odisha, Jharkhand, eastern

Uttar Pradesh and Chhattisgarh. The seven states produced an average of 42.6 million tonne

of rice before the launch of BGREI but now they contribute 55 million tonne or over half the

rice produced in the country.

Rice is produced on nearly 25 million hectares in eastern India. Dr Mohapatra said a section

of the farmers in Orissa has used late variety paddy seeds. "In this case, the seedling can

remain in the nursery for a month and can be transplanted subsequently when rains lash the

coastal state."

Indian Council of Agricultural Research is too ready with contingency plans if the eastern

region does not receive sufficient rains to support the kharif paddy.

Drop in rainfall may hit Bengal rice transplantation (BL 23/7/2013)

A near 25-40 per cent drop in rainfall in the key rice growing districts of Gangetic West

Bengal so far during this year is likely to impact the paddy transplantation activity this kharif

season.

Transplantation is the process of transferring seedlings, which are grown in seed-beds, into

the field soaked with plenty of water. Typically, the process of transplantation begins by July

10.

According to a senior official in the State agriculture department, nearly 10-15 per cent of

paddy transplantation is usually achieved by this time of the year. However, this year,

transplantation has been lower in most paddy producing parts of the State.

“Only five per cent of the transplantation work has taken place at Burdwan while in Birbhum

and Nadia, it is still lower at just about 1-2 per cent,” the official told Business Line.

West Bengal produces about 14.5 million tonnes of paddy each year in three seasons — aus,

aman and boro.

The kharif paddy (aus and aman) output accounts for about 70 per cent of paddy production

in the state. Delayed transplantation could affect the productivity and quality of the crop.

LOWER RAINS

Burdwan – considered to be the rice bowl of the State received 25 per cent lower rains than

average this year. Rainfall has also been lower by 39 per cent in Birbhum, 31 per cent in

Nadia and 27 per cent in Hooghly, according to a data provided by Express Weather. These

four districts are considered to be high productivity areas in terms of paddy cultivation.

The districts of North 24-Parganas, Murshidabad, Bankura, Malda, East Midnapur, West

Midnapur, North Dinajpur, South Dinajpur and Howrah are considered to be medium

productivity areas. Except for Bankura, North 24 Parganas and North Dinajpur, rainfall is

lower by 20-40 per cent in the other districts falling under the medium productivity areas.

30

PRODUCTION

The State Government has targeted to sow paddy on close to 42 lakh hectare in 2013-14,

similar to last year’s level.

However, the State expects to produce two per cent higher crop at around 110 lakh tonne this

year as compared to 108 lakh tonne of aman paddy last year.

“If the rainfall improves then we expect a higher yield and better crop this year,” he said.

ANXIOUS FARMERS

Meanwhile, farmers in the State, who had suffered huge losses in 2012 due to crash in open

market price of paddy (below the minimum support price levels) and poor procurement by

rice mills at the support price, are keeping their fingers crossed to get better prices for their

produce this year.

The Centre has hiked the minimum support price for common grade paddy by Rs 60 a quintal

to Rs 1,310 for 2013-14 (July-June).

“Currently we are getting close to Rs 1,380 in the open market. We just hope that the rains

improve so that we can get a better crop and sell them at good prices this year,” said

Salauddin Mullah, a farmer of Boromuriya village in Burdwan district of West Bengal.

Rise in poppy seed prices likely as court extends stay on imports (BL 23/7/2013)

Supply squeeze following a Court stay on import of poppy seeds from a major supplying

country appears to be pushing up the prices in the domestic market as the demand is claimed

to have outstripped the supply.

Upcountry trade sources told Business Line that “there were no imports from April while

other origin crops would become available only from September”.

The indigenous production is claimed to be very small at a time when the country’s annual

demand is pegged at around 30,000 tonnes. As a result, they said, “huge shortages are likely

leading to an upsurge in the prices in the coming days raising the prices even to a level of Rs

600 a kg”, they claimed.

The trade said the stay by the Allahabad High Court on imports has been extended and,

hence, is still in force and that might lead to further squeeze in supply.

The High Court, by its order dated July 19, 2013, has directed that “the case be listed for the

appropriate Bench on August 8, 2013.

“Interim order earlier granted shall remain in operation till then”.

The Allahabad High Court had earlier issued an interim direction on May 16, 2013 to the

Union Government and three others on a PIL that “the respondents not to allow any import of

31

white poppy seeds from Country ‘X’ till the next date of listing, notwithstanding any licence

or registration of any import sale contract.

“The matter will be listed on July 1, 2013 for further orders”.

The court then observed that “there would be no legitimate domestic production of that

country available for import till July, 2013 i.e., the next harvest season”.

India produced an estimated 18,374 tonnes of poppy seeds in 2012 and against this it is

estimated to be around 4,400 tonnes in 2013 following reduction in area.

Availability, according to the trade, during the period from May 2012 to April 2013 was

estimated at 10,576 tonnes.

The Indian Narcotic Control Board (NCB), Gwalior, is said to have granted permits for

cultivating in 5,700 hectares (ha) only this year against 24,000 ha last year.

Indian exports of alkaloids are to the US, Europe and Japan.

During 2010-11, the country exported 1,500 tonnes to the US, whereas in 2012-13, the US

would purchase only 500 tonnes.

Japan also has reduced purchase from India from 1,200 tonnes to 400 tonnes, they said.

Given the “reduction in sales of opium alkaloids during 2012-2013 and 2013-2014, the NCB

has reduced cultivation ‘Patta by 80 per cent.’ While Pattas for cultivation of poppy in 2011-

2012 were for 24,000 hectares, it is now reduced to 5,700 ha in 2012-2013 and 2013-2014;

only 20 per cent of last year”, trade sources said. (This article was published on July 23,

2013)

32

33

WHEAT

FCI exports 4.19 mn tonnes wheat; to earn over Rs 7,000 crore (ET 27.6.13)

FCI has exported 4.19 million tonnes of wheat, valued at more than Rs 7,000 crore, in the

past one year.

State-run Food Corporation of India (FCI) has exported 4.19 million tonnes of wheat, valued

at more than Rs 7,000 crore, in the past one year.

Due to surplus wheat stock, the government had permitted FCI to export 4.5 million tonnes of

the grain in July last year. The deadline for export is June 30, this year.

"The export process has been completed. We have received bids for 4.19 million tonnes,

which will fetch more than Rs 7,000 crore at an average price of about USD 310 per tonne" a

senior FCI official said.

Out of 4.19 million tonnes, a major quantity has already been shipped to South Korea,

Ethiopia, Bangladesh, Yemen, Thailand and Indonesia, he said.

Maximum wheat has been exported to South Korea at one million tonnes. Small quantities of

wheat were also shipped to Vietnam, Malaysia, Philippines and the Middle East.

The official said that no profits were made from exports but indirect saving on carrying and

storage cost of wheat to the tune of about Rs 1,000 crore was made.

The last wheat export tender was floated during third week of June for about 2,90,000 tonnes

but received bids for only 70,000 tonnes, he added.

The FCI official said good price for Indian wheat was received in line with Australian soft

wheat, considered as the best in the world. "There is greater acceptability of our wheat in the

global market now," he added.

The official, however, observed that the FCI could have secured higher price if handling

process was fully mechanised.

The FCI is currently handling 77 million tonnes of foodgrains, of which 4.43 million tonnes

is wheat.

Food Corp secures good price for wheat exports (BS 27.6.13)

The reserve price for the export of two lots of wheat - 2 and 2.5 million tonnes - was fixed at

$228 a tonne and $300 a tonne, respectively

The Food Corporation of India (FCI) has exported wheat from state warehouses at an average

price of $311.69 a tonne, higher than the reserve price fixed by the government, primarily due

to good quality and competitive pricing. The reserve price for the export of two lots of wheat-

34

--two million tonnes (mt) and 2.5 mt---was fixed at $228 a tonne and $300 a tonne,

respectively.

The Centre’s previous wheat export tender had fetched about $50 a tonne more than the rate

prevailing in the international market.

According to a statement issued by FCI today, so far, India had exported four mt of wheat.

Last year, the government started selling wheat from its state inventories, the first time since

2002-03. Successive years of bumper harvests and

procurement had resulted in its granaries being full.

Officials said enthused by the good response to the first

two tranches of exports, the government is planning to

export another two mt. Of the exports through the first

two rounds, 4.03 mt has already been despatched,

primarily to South Korea, Ethiopia, Bangladesh,

Thailand and Yemen.

According to data, as on June 1, wheat stocks in state-

run warehouses stood at 77.69 mt, against a requirement

of 20.1 mt.

An FCI official said this year's exports had proved the

corporation’s wheat had high acceptability in the international market. “We got a very good

response for our wheat, despite a drop in global demand,” he said, adding, “There is huge

demand for our wheat now…The prices we get are as good as those for Australian soft wheat,

one of the best in the world.”

“We have a multi-layer quality check to ensure Indian wheat gets a credible brand,” the

official said. “The samples were first sent for tests to the Directorate of Wheat Research at

Karnal (Haryana), for chemical parameters. Besides tests by buyer-representatives, FCI also

ensured tests to prevent rejection of shipments. We exported the wheat only after the buyers

were satisfied about the product.”

He said FCI could secure better prices if the handling process was fully mechanised. “Non-

mechanisation of the handling process makes us uncompetitive in the international market.

Otherwise, we get highly encouraging feedback from buyers,” he said.

Mundra port in Gujarat handled the largest quantify of exports, followed by the Kandla port,

also in Gujarat.

35

Wheat procurement lower by one-third so far this market year (ET 27.6.13)

Food Corporation of India (FCI), the nodal agency for procurement and distribution of

foodgrains, and state agencies had procured 37.35 million tonnes in the year-ago period.

Wheat procurement has declined by 33 per cent to 25.08 million tonnes so far in the 2013-14

marketing year starting April mainly due to lower arrival of wheat in the mandies with

aggressive buying by private traders.

Food Corporation of India (FCI), the nodal agency for procurement and distribution of

foodgrains, and state agencies had procured 37.35 million tonnes in the year-ago period.

Although wheat marketing year runs from April to March, the entire procurement exercise

generally gets over by June.

The lower procurement than targeted could, however, address the storage problems being

faced by the government.

According to the FCI data, the arrival of wheat in mandies have dropped by 28.23 per cent so

far in 2013-14 at 29.16 million tonnes as compared to 40.63 million tonnes in the year-ago

period.

An FCI official attributed the lower arrival of wheat to the aggressive buying by private

traders at a higher price than the government's minimum support price (MSP) of Rs 1,350 per

quintal.

The farmers are getting better rates from traders in the range of Rs 1,500-1,600 per tonne, the

official said.

"The procurement process is almost complete and it is unlikely that the total figure would

cross 26 million tonnes in 2013-14 marketing year," he added.

FCI and state agencies had procured a record 38.14 million tonnes in the entire 2012-13

marketing year.

According to the third advance estimate of Agriculture Ministry, wheat production is

projected to decline to 93.62 million tonnes in 2012-13 crop year as against record 94.88

million tonnes in the previous year.

36

At the beginning of the marketing year, the food ministry had set a procurement target of 44

million tonnes, which was later scaled down to 33 million tonnes, with now even that looking

difficult to achieve.

As per the data, the maximum fall in the procurement this season has been registered in Uttar

Pradesh, where so far government has procured 6,82,433 tonnes of wheat against 4.8 million

tonnes in the corresponding period of previous year.

Punjab and Haryana, the major wheat growing and procuring states, have also witnessed dip

in procurement.

So far, 10.88 million tonnes of wheat has been procured in Punjab and 5.87 million tonnes in

Haryana as against 12.82 million tonnes and 8.66 million tonnes, respectively, during the last

season.

Sturdy variety shores up India’s wheat output (FE 9.7.13)

The decline in wheat production due to the unusually high temperatures and rains during

March and April this year could have been much sharper if it was not for large-scale adoption

of a temperature-tolerant variety by farmers in the key growing areas of Punjab, Haryana and

western Uttar Pradesh.

Although the ministry of agriculture has not revised wheat production estimates for 2012-13

from 93.62 million tonne (mt), agricultural scientists agree that there is a 10-15% decline in

output because of rains in March and unusually high temperatures in April, which affected

flowering.

However, large-scale cultivation of the temperature-resistant HD 2967 variety, developed by

Indian Agricultural Research Institute (IARI), minimised the fall in wheat output.

“Since 2011, when we introduced the variety, the adoption by farmers has been

encouraging,” KV Prabhu, head, division of genetics, IARI, a premier institute under the

agriculture ministry, told FE. According to Prabhu, the adoption rate of the HD 2967 variety

has been around 50% this year in northern states.

The HD-2967 variety has given yield up to 21.4 quintal per acre against 20 quintal/acre for

other varieties.

“Next year, we expect 70% farmers to adopt the variety as fluctuations in temperature during

the flowering season become a regular trend in key growing areas,” he said. The variety not

only deals with higher temperatures prior to harvesting, but also takes care of the yellow rust

disease.

Indu Sharma, director of Karnal-based Directorate of Wheat Research (DWR), said that

thanks to some heat-resistant varieties, such as PB 343, PB 550 and HD 2967, developed by

IARI, DWR and Punjab Agricultural University (PAU), farmers have been able to sustain

production despite the fluctuations in temperature witnessed during the last few years.

Meanwhile, the US Department of Agriculture (USDA) recently pegged India's wheat

production at 87 mt this year, which is 7% lower than the government's latest estimate of

93.62 mt. “The rains and high humidity also led to a higher incidence of rust in north India

and lodging in the early harvested wheat varieties," the USDA said.

37

IARI has been experimenting with various wheat varieties from an estimated 28,000 wheat

genes available with National Bureau of Plant Genetic Resources (NBPGR).

In a first-of-its-kind experiment to identify specific traits from the country's huge genetic

resources, NBPGR has characterised more than 5000 varieties of wheat germplasms for

development of better seed varieties that can withstand climate change.

Top agricultural scientists associated with the charasterisation drive say that the purpose was

to provide genetic variability, which helps in quality seed development.

FCI to sell 9.5mt wheat to bulk users in open market (ET 9.7.13)

The Food Corporation of India plans to sell over 9.5 million tonne wheat to bulk consumers

in the open market in an effort to bring down domestic prices.

The Food Corporation of India (FCI) plans to sell over 9.5 million tonne wheat to bulk

consumers in the open market in an effort to bring down domestic prices. It will sell wheat

under the open market sale scheme (OMSS) through tendering with a base price of Rs 1,500

a quintal.

Meanwhile, Planning Commission deputy chairman Montek Singh Ahluwalia will meet food

minister KV Thomas and senior FCI officials on Tuesday to discuss plans to set up two

million tonne of silo storage through public-private partnership spread over 42 locations

across 10 states.

Of the total supplies of 29.2 million tonne of wheat this season (2013-14), government

agencies and the FCI have procured 25.08 million tonne till July 8.

In the 2012-13 season, the FCI and state procurement agencies procured 38.1 million tonne

compared to 28.1 million tonne in 2011-12. In a normal year, wheat procurement for the

central pool would be 25-30 millions tonne, say analysts.

As on July 1, total grain in the central pool stood at 77.7 million tonne. Of this, 44.4 million

tonne was wheat and 33.3 million tonne was rice. According to strategic buffer stock norms -

-which is the minimum stock requirement for PDS and welfare norms -- the minimum

amount of wheat in the central pool should be at 20.1 million tonne and 11.8 million tonne

rice by July 1.

Over 7.5 million tonne of wheat was sold under OMSS in the previous year. "This year, 8.5

million tonne will be released for bulk consumers and 1 million tonne for small private

players," said FCI chairman and managing director C Vishwanath.

The tenders will be floated in a week with the initial quantity yet to be assessed, said

officials. The government targets to release over 3.5 million tonne from the 2011-12 harvest.

"We will be first liquidating the old crop of 2011-12 from Punjab and Haryana godowns,"

said Vishwanath.

The tenders are coming after a moratorium of three months. "Wheat prices were looking to

become firm as the procurement season got over. This move will ensure steady supply in the

market and keep a check on prices," he said.

38

On the National Commodity and Derivatives Exchange (NCDEX), spot price for Delhi

delivery was being quoted at Rs 1,561.65 per quintal. The August contract on the NCDEX

was firm by 0.32% at Rs 1,586 a quintal with an open interest of 12,830 lots.

Against the target of exporting 4.5 million tonne wheat, central public sector undertakings

such as MMTC, State Trading Corporation and PEC are expected to clock a figure of 4.3

millions tonne till date. FCI officials said they were awaiting the government's clearance for

an export of 2 million tonne in the coming months. "We have established ourselves in the

international market. There is demand for Indian wheat and we are geared to sell quality

grain," said Vishwanath.

Wheat stocks down 4.5 pct m/m, yet higher than target (ET 10.7.13)

India, the world's second biggest grower of wheat and rice, needs to maintain wheat stocks of

17.1 million tonnes on July 1, when the new crop year starts

Wheat stocks at government warehouses as on July 1 fell 4.5 per cent from June to 42.4

million tonnes, government data showed on Wednesday, but still reflected overflowing grain

silos.

India, the world's second biggest grower of wheat and rice, needs to maintain wheat stocks of

17.1 million tonnes on July 1, when the new crop year starts, for its programmes to provide

cheap grains to the poor.

India's monthly rice stocks on July 1 also fell 5.4 per cent to 31.5 million tonnes as harvest

deliveries ended, but the stocks were still more than three times higher than the minimum

target of 9.8 million tonnes.

The Indian government last week launched a $22 billion welfare scheme to give cheap food

to millions of people, a centrepiece of the ruling Congress party's plan to win a third term in

polls due by May 2014.

India grows only one wheat crop a year, with harvests from March bumping up stocks. The

new season rice harvest begins in October, which is then drawn on for distribution in

government welfare schemes.

Indian wheat loses to cheaper Black Sea produce (BL 16/7/2013)

Wheat exports have slowed in recent weeks as buyers, mainly from the Far-East, have

switched over to Black Sea Origin grains, which are cheaper by about 15-20 per cent over the

Indian produce.

While there are no new contracts, exporters including the public sector entities such as PEC,

STC and MMTC are servicing the deals struck earlier. Exports in the current fiscal are

estimated at around two million tonnes (mt). In the last financial year, wheat exports by the

private trade stood at over 2.6 mt, while the public entities were estimated to have shipped

out around three mt.

39

Wheat harvesting has picked up in the Black Sea countries such as Ukraine and Russia and

prices for the grain range $240-250 a tonne f.o.b, whereas the Indian produce is still priced at

$300.

The Government had fixed a floor price of $300 for exports mainly for stocks held by Food

Corporation of India in its warehouses. The prices have not been revised despite a drop in the

market. The drop even led to cancellations of some tenders by the PSU entities as the offer

they had received were lower than the floor price.

“If India wants to continue exports, then it has to be at international prices and not at above

market prices. By not revising the price for exports, India has been helping shipments from

the Black Sea,” said Tejinder Narang, trade analyst adding that the country has lost about two

mt in exports.

Indian wheat was largely imported by Far-Eastern countries for feed purpose.

Earlier during harvest, the Government had offered about five mt for exports through private

players, to make storage space for the new crop.

However, there was no response from the trade as the price fixed by the Government was

higher than global prices.

As on July 1, wheat stocks with Government stood at 42.3 mt, of which more than a fourth

was stored in temporary sheds that could result in the grains getting spoiled due to rain.

The Government has procured about 25 mt this year, lower than last year. This is because

production this year is estimated to be 80-84 mt. The Government is yet to come out with its

final estimate for wheat output. vishwanath.kulkarni@thehindu.co.in (This article was

published on July 16, 2013)

Govt scales down 2012-13 wheat output estimate by 2.55% (BS 23.7.13)

According to the latest advanced estimate, production of pulses is estimated to be at an all-

time high of 18.45 mt in 2012-13 (July- June)

The government on Monday scaled

down the 2012-13 annual wheat

production estimate by 2.55 per cent

to 92.46 million tonnes (mt) because

of bad weather during the crop

growing stage in major growing

states of Madhya Pradesh and

Haryana.

The government’s third advanced

estimate, released in May, had

pegged the wheat output at 93.62

mt. According to the latest advanced estimate, production of pulses is estimated to be at an

40

all-time high of 18.45 mt in 2012-13 (July- June).

Pulses production according to the third advanced estimate was 18 mt, while last year, the

country produced 17.09 mt of pulses. Officials in the know said a record production of pulses

will help in curbing imports and cooling down food inflation.

Overall production of foodgrains, which includes rice apart from wheat and pulses, has

dropped by 1.5 per cent to 255.36 mt due to drought in some states last year. Production of

oilseeds in 2012-13 is estimated to be 31 mt, almost four per cent more than 2011-12. In the

third advanced estimate, oilseeds output was estimated at 30.7 mt.

The foodgrains output is same as it was in the third estimate, but it is lower than the record

259.29 mt achieved in the 2011-12 crop year.

In the foodgrains category, rice production has been revised upward to 104.4 mt from 104.22

mt in the third estimates. However, rice output is lower at 105.3 mt, compared with 2011-12.

Coarse cereals production estimates have also been revised upward to 40.06 mt in 2012-13

from 39.52 mt in the third estimate, but it is still lower than the previous year’s 42.01 mt.

Foodgrains output in 2012-13 is lower than the previous year due to a poor monsoon in

Maharasthra, Karnataka and Rajasthan. However, the production is expected to rebound this

year as the country is currently receiving good monsoon and sowing area has exceeded last

year’s level so far.

Wheat production pegged lower at 92.46 mt (BL 23/7/2013)

Prices continue to rule high despite Govt’s latest estimate of a large crop

The wheat trade is sceptical about the latest Government projections on crop size for 2012-

13, estimated at 92.46 million tonnes.

Though the Government’s fourth advanced estimates released on Monday pegged the crop a

tad lower than its earlier estimate of 93.62 mt, the trade believes that the crop could be much

lower than last year – based on the procurement and the pricing trends.

The country had produced record 94.88 mt of wheat last year.

Wheat procurement by Government agencies this year was down by a third at 25.08 mt

against last year’s 38 mt. Prices continue to rule high despite the Government’s latest

estimate of a large crop.

41

In Uttar Pradesh, the country’s largest wheat producing State, market prices during the

procurement season crossed the minimum support price (MSP) levels for the first time in five

years.

The higher-than-MSP was attributed to the poor market arrivals as farmers held back their

produce in anticipation of better prices.

Citing the trade in Punjab and Haryana, Adi Narayan Gupta, President of Roller Flour Millers

Federation of India, estimates the crop to be lower by 10-15 per cent over the Government’s

estimates.

The extended cold wave conditions and erratic rains in the key growing regions of Haryana,

Punjab, Uttar Pradesh and Madhya Pradesh during February and March did affect the yields

and the crop this year.

Also the emergence of diseases such as yellow rust and higher than normal temperatures and

humidity levels during February-March did impact the crop.

Even the United States Department of Agriculture (USDA) had recently projected a lower

Indian wheat crop at 87 mt from its earlier estimates of 92 mt.

The USDA had based its projection on the preliminary harvest reports from Punjab, Haryana

and Uttar Pradesh, which indicated a 8-10 per cent lower yields compared to last year due to

smaller kernel size and increase in shrunken kernels compared to last year.

The USDA had traditionally revised its estimates after the Indian Government releases its

fourth advance estimates.

But whether, the USDA will revise upwards its estimate to the latest one of the Indian

Government is to be seen.

“If one goes by the lower procurement by Food Corporation of India and other State agencies

and market prices of around Rs 1,550 a quintal, the latest estimate of 92.46 mt doesn’t appear

to be justified.

Any downward revision of the crop size may stoke inflationary pressures and that could be

the concern of the Government,” said Tejinder Narang, grains trade analyst.

42

43

Maize/ Coarse Grains

Punjab government announces 75% subsidy on maize seeds (ET 5.7.13)

Punjab government today said it will give 75 per cent subsidy on maize seeds in 10 districts

of the state to encourage farmers to shift to the crop.

Initially, the subsidy will be provided to farmers in 10 districts, including Barnala, Fathegarh

Sahib, Jalandhar, Kapurthla and Ludhiana, and would be further extended to remaining

districts in the second phase, Chief Parliamentary Secretary, Agriculture, Gurbachan Singh

Babbehali said.

Moga, Patiala, Ropar, Sangrur and Mohali are the other diostricts where the scheme has been

launched.

He said the subsidy will be provided on hybrid seeds of maize P 3396 and TX 369.

He said that state government has made elaborate arrangements for marketing the crop.

Punjab government will install maize driers at Saila Khurd in Hoshiarpur district and at

Nawan Shahr and these driers would become operational soon.

Maize prices up despite higher sowing (BS 10.7.13)

Sowing and crop are expected to go up by 3-5% this kharif season

Maize prices are reigning high in the open market due to lower availability of the crop. The

damage to the rabi crop due to early monsoon and deterioration in the quality of maize

because of open storage have created a supply crunch. Sowing during this kharif season,

however, is expected to go up by three-five per cent.

The maize price registered an unprecedented increase of Rs 200 a quintal in the last one

month. Depending upon the moisture content, maize prices are between Rs 1,600 and Rs

1,650 a quintal. While weakening of the rupee might have helped starch exporters, those

using maize as a primary input are unable to cash in on this opportunity as there is a dearth of

raw material.

The industry is operating at 70 per cent capacity due to supply bottlenecks. The starch export

market is lucrative these days but the paucity of maize has hindered companies from gains in

currency fluctuation, Vishal Majithia, president of the Starch Manufacturers’ Association,

told Business Standard.

The sowing this year is higher by three to five per cent in different parts of India for kharif

maize, says Raju Choksi, vice-president, agri commodities, at Anil Nutrients Ltd. Choksi

attributes the higher acreage to better monsoon. The dry spell last year refrained the farmers

in some areas from growing maize, he added.

The results of the kharif crop would be visible in October when the arrivals start. If the rain

God remains kind, the crop size would be higher than last year. But there’s time to go and

nobody can predict the climate, Choksi said.

Maize is used in manufacturing 200 products and despite a thrust by the government to grow

44

maize, farmers have not shown keen interest in the past few years.

A grant of Rs 200 crore has been sanctioned to set up a Directorate of Maize Research at

Laddowal, near Ludhiana, Punjab. The institute, with 45 scientists, would be relocated from

the existing campus in New Delhi and run by the Indian Council of Agricultureal Research.

Despite huge demand from the industry, farmers have shown tepid interest in diversifying to

maize.

Paviterpal Singh Pangli, a farmer from Punjab, said the assured price of maize was a must to

mobilise farmers to grow the crop. The Union agriculture ministry raised the minumum

support price of maize to Rs 1,310 per quintal this year from last year’s 1,175 per quintal.

So, the demand for the industry has to be channelised. Maize has a tremendous scope in the

food processing industry and value addition to maize may generate good exports potential.

Maize remains stable at Rs 13,171 per tonne: US Grains Council (BL 15/7/2017)

Maize prices in India continued to remain stable in the past week to average at Rs 13,171 per

tonne on account of increased sowing following better rainfall, according to US Grains

Council.

“Corn prices were at Rs 13,171 per tonne on pan India basis last week. Prices were higher

than last year by 13 per cent. The overall sowing of coarse cereals is much higher at 9.65

million hectares from 3.98 million hectares in 2012—13,” USGC India Representative Amit

Sachdev said here.

The overall rainfall is higher than the average by 20 per cent resulting in farmers planting

more this year, he said.

“The overall good sowing has kept the prices stable in the markets across the country,” he

added.

In Andhra Pradesh, maize prices were down 2.28 per cent at Rs 13,000 per tonne, Gujarat

2.59 per cent at Rs 14,093 per tonne, Madhya Pradesh by 0.16 per cent at Rs 13,316 per

tonne and Maharashtra by 2.37 per cent at Rs 14,233 per tonne.

In Rajasthan, prices fell by 1 per cent to Rs 14,048 per tonne and in Uttar Pradesh they were

down by 2.51 per cent at Rs 13,454 per tonne.

However, prices in Karnataka firmed up by 1.71 per cent at Rs 13,760 per tonne.

The prices were also down in all key delivery centres of NCDEX.

Pearl Millet prices declined by 6.8 per cent to Rs 13,293 per tonne, higher than last year by

20.9 per cent.

In the north though prices are lower and the grain is being used in layer rations in Rajasthan,

Haryana and parts of Punjab.

Sorghum prices were up by a mere 0.3 per cent at Rs 16,052 per tonne, down 3.6 per cent

from last year.

Barley was more or less stable at Rs 11,773 per tonne, down by 1 per cent against last year.

45

PULSES

CACP aims at boosting domestic pulses output by imposing 10% import duty (ET

3.7.13)

Importers and traders say that with domestic prices crashing, the government should allow

exports to ensure remunerative prices to farmers.

The Commission for Agricultural Costs and Prices (CACP), which advises the government

on price policy for major agricultural commodities, has recommended an import tariff of 10%

on pulses to promote local production.

Currently, pulses like moong and tur have an import parity price that is below the minimum

support price (MSP). Importers and traders say that with domestic prices crashing, the

government should allow exports to ensure remunerative prices to farmers.

India is the largest consumer (18.5-20 million tonne), producer (15-18 million tonne) and

importer (2.5-3 million tonne) of pulses, an important constituent of protein for most

vegetarians in the country. "Especially in tur dal, we have noticed that pulses imported from

Myanmar are cheaper than the domestic production. Hence, we have recommended to the

Ministry of Agriculture to impose a 10% import duty," said Ashok Gulati, chairman, CACP.

Pulses imports are permitted at zero duty since 2006 to ensure availability at reasonable

prices. Pulses exports from India, however, are prohibited since 2006 except for kabuli chana

and over 10,000 tonne of organic pulses and lentils per annum.

Pulses importers said the revision of the import duty was a call to be taken by the revenue

ministry in consultation with the consumer affairs ministry. "Rather than increasing the

import duty, the government should allow exports of pulses to ensure that farmers get a good

price," said Pravin Dongre, chairman, India Pulses and Grains Association. He said domestic

prices were extremely low with chana selling below the MSP of Rs 3,000 a quintal. The

harvesting of new chana crops in Rajasthan and Madhya Pradesh have further crashed

domestic prices, said traders at the Delhi's Naya Bazaar mandi.

46

Consistent efforts by the government have led to a 2.9% increase in pulses production in

2012-13 at 17.6 million tonne from the past year. However, production of kharif pulses is

estimated to decline by 9.6% to 5.5 million tonne, with a 3.8% increase in tur, a fall in urad

by 1.7% and in moong by a steep 22.1%. According to Gulati, the two important trade

policies (MSP and import) were inconsistent and had to be dovetailed to protect and push

farmers to grow more pulses. "Imported tur from Myanmar is beingquoted at Rs 3,200 a

quintal and we are giving an MSP of Rs 4,300 a quintal to our farmer. What will prevent

traders to import at cheaper rates and sell at high prices in the market?" he said.

According to traders and brokers, raw tur was currently being imported from Myanmar and

futures contracts were being signed with Malawi, Mozambique, Tanzania, Kenya for August-

September delivery. "Market prices are stable and can see a further correction," said Vasad-

based Mitesh Patel who processes and sells tur dal under the Lakshmi Toor dal brand.

Compared to wheat and rice, the production of which has clocked an all-time high, pulses are

a major challenge for India in terms of meeting its domestic demand.

Pulses trade against duty on imports (BL 03/7/2013)

The Indian Pulses and Grains Association (IPGA) on Wednesday said it was not in favour of

any import duty on pulses.

At present, importers can bring in pulses duty free till March 31 next year. However, the

Commission for Agriculture Costs and Prices (CACP) in its recent recommendations has

suggested that the Government impose a 10 per cent duty on imports to boost domestic

production.

Pravin Dongre, President, IPGA, clarified that his association was not in favour of any import

duty but wanted the Government to consider opening up exports. “We believe in free trade

and are against any kind of impediments” he said.

Further, opening up exports could help stabilise prices, which are at present ruling below the

minimum support price levels in some markets.

The recent 10 per cent decline in rupee against the dollar has made pulses imports costlier

and reduced the price differential between the domestic and imported varieties. “The impact

of the rupee decline is like a duty too,” he said.

India’s pulses imports stood at around 3 million tonnes in 2012-13 and in value term they

were estimated at over $1.5 billion. (ends)(This article was published on July 3, 2013)

No plans to levy import duty on pulses now, says Pawar (BL 16/7/2013)

The Government has no immediate plans to impose any import duty on pulses, Agriculture

Minister Sharad Pawar said on Tuesday. He was speaking to reporters on the sidelines of the

85{+t}{+h} Foundation Day of the Indian Council of Agricultural Research.

The confusion among pulses traders was triggered following reports that the Food Ministry

was in favour of imposing a 7.5 per cent import duty.

47

The Commission for Agriculture Costs and Prices (CACP), in its recommendations, had

suggested imposition of a 10 per cent on duty on imports to boost domestic production.

Currently, there is no duty and importers can bring in pulses duty free till March 31,

according to a Finance Ministry notification issued in March.

The pulses trade has opposed any move to impose import duty.

However, the trade wants the Government to open up exports to help stabilise prices that are

currently bearish and below levels of the minimum support price.

The recent 10 per cent decline in rupee against the dollar has made pulses imports costlier

and has reduced the price differential between domestic and imported varieties.

'PRICEY VEGGIES WORRISOME’

India’s pulses imports stood at around three million tonnes in 2012-13. In value terms, they

were estimated at over $1.5 billion. Pawar said the current trend of vegetable price rise was

worrisome, but expects it to ease with improving supplies in the weeks ahead.

Prices of almost vegetables including tomato, potato and onion have shot up in recent weeks

across the country on excess rains affecting crop in key-growing regions and disruption in

supplies, mainly from Himachal Pradesh and Uttarakhand.

“This is a temporary situation about vegetable prices. It is definitely worrisome,” he said.

Pawar said that the supply situation was expected to improve in the coming weeks.

The Minister said that onion supply was expected to improve after three weeks with the

arrival of the new crop from Maharashtra, Gujarat and Rajasthan.

The recent rising trend in vegetable and food prices had fuelled food inflation, which rose to

9.74 per cent for June from 8.25 per cent in May.

Further, Pawar said the monsoon so far, has been favourable this year and the current trend in

sowing of kharif crops could help the country break the last two year’s records in food

production.

This is provided the monsoon continues to be good as projected by the Indian Meteorological

Department, he said.

Replying to a query on whether the Government would keep open the exports of rice and

wheat in view of implementation of food security scheme, Pawar said that the stock position

as of now was extremely good.

“Unless we export, there will be problem and there will be damage,” Pawar said, adding that

foodgrains required for food security had been kept safely.

48

Moong may head south on kharif output prospects (BL 19/7/2013)

Pulse seeds and pulses ruled flat in Indore mandis on subdued buying support. Weak demand

and buying support dragged masur in local mandis by Rs 50 with masur (bold) at Rs 4,350 a

quintal, while masur (medium) ruled at Rs 4,000-4,100.

However, with large stock of imported masur at ports, masur is ruling lower, said a trader

adding that with depletion of imported stocks, masur may see a bullish trend on higher

import.

Decline in spot masur also dragged its dal by Rs 50 in the past one week with masur dal

(average) in local mandis on Friday ruling at Rs 4,950-75, masur dal (medium) at Rs 5,025-

50, while masur dal (bold) ruled at Rs 5,125-50.

Moong and urad ruled stable with moong (bold) being quoted at Rs 4,900-5,100, while

moong (medium) ruled at Rs 4,500-4,800.

Given favourable crop report, traders have ruled out long rally in moong. Moong dal

(medium) was being quoted at Rs 6,000-6,100, moong dal (bold) at Rs 6,600-6,700, while

moong mongar ruled at Rs 7,000-7,100.

Urad and its dal, on ther other hand, ruled stable on subdued demand with urad (bold) being

quoted at Rs 3,400-50, while urad (medium) ruled at Rs 3,000-3,200.

Urad dal (average) was at Rs 4,000-4,100, urad dal (bold) at Rs 4,500-4,600, while urad

mongar ruled at Rs 5,500-5,800 a quintal respectively. (This article was published on July

19, 2013)

India produces record pulses in 2012-13; foodgrains output down (BS 23.7.13)

Pulses output has been revised upward to record 18.45 MT in 2012-13 as compared with 18

MT in the third estimates released in May. Pulses output stood at 17.09 MT in 2011-12

The country has achieved a record pulses production of 18.45 million tonnes (MT) in the

2012-13 crop year ended June, while foodgrain output fell by 1.5% to 255.36 MT due to

drought in some states last year.

The Agriculture Ministry today released the fourth advance estimates of foodgrain production

for 2012-13.

Pulses output has been revised upward to record 18.45 MT in 2012-13 as compared with 18

MT in the third estimates released in May. Pulses output stood at 17.09 MT in 2011-12.

The record pulses production augurs well for the country which is depended on imports to

meet the shortfall of around 3-4 MT. Higher supply will reduce imports and also prices.

Higher support price prompted farmers to grow pulses.

'As per the latest estimates, India has produced 255.36 MT of foodgrains during the 2012-13,'

an official statement said.

49

The foodgrains output is same as it was in the third estimate, but it is lower than the record

259.29 MT achieved in the 2011-12 crop year (July-June).

In foodgrains category, rice production has been revised upward to 104.4 MT from 104.22

MT in the third estimates. However, rice output is lower at 105.3 MT compared with 2011-

12.

Coarse cereals production estimates has also been revised upward at 40.06 MT in 2012-13

from 39.52 MT in the third estimate, but it is still lower than the previous year's 42.01 MT.

However, wheat output has been revised downward to 92.46 MT from 93.62 MT in the third

estimate. Production stood at record 94.88 MT in 2011-12.

Foodgrains output in 2012-13 is lower than previous year due to poor monsoon in

Maharasthra, Karnataka and Rajasthan.

However, the production is expected to rebound this year as the country is currently receiving

good monsoon and sowing area has exceeded last year's level so far.

50

51

EDIBLE OILS & OILSEEDS

Groundnut oil recovers modestly on renewed demand (ET 28/6/2013)

Groundnut oil prices recovered modestly in an otherwise sluggish oils and oilseeds Vashi

Wholesale market here today on renewed month-end demand from stockist and retailers.

Refined palmolein slipped further following lower retail offtake.

In the non-edible segment, castorseeds bold and castor oil commercial declined owing the

lack of demand from shippers and soap manufacturers.

Linseeds oil held steady in the absence of any worthwhile buying.

In futures market, castorseeds for September contract fell further on speculative sell-off in the

absence of export enquiries.

In the edible segment, Groundnut oil moved up by Rs 5 per 10kg to Rs 935 from Thursday's

closing level of Rs 930. However, refined palmolein eased by Rs 2 per 10kg to Rs 528 from

overnight closing level of Rs 530.

Moving to non-edible section, castorseeds bold fell by Rs 15 per 100 kg to Rs 3,485 from Rs

3,500 and castoroil commercial slipped by Rs 3 per 10kg to Rs 727 from Rs 730. Linseeds oil

closed unchanged at Rs 735 per 10kg.

Turning to futures, Castorseeds September contract resumed lower at Rs 3,720 and dipped

further to end at Rs 3,663 from Rs 3,734 previously, showing fall of Rs 71 per tonne.

Weak rupee won't make edible oil more expensive (ET 2/7/2013)

A weak rupee has not hit Indianedible oil consumers hard because global prices of soyabean

and palm oil have softened in the last 10 days when the rupee fell sharply against the dollar.

Prices of imported soybean oil declined to $960 per tonne from $1,045 per tonne during the

period. Similarly, crude palm oil has dropped by $30 per tonne in the same period to $810 per

tonne.

Interestingly, Indian consumers were paying more for edible oil this time last year although

the rupee was much stronger because international prices were at a high. Traders say the

softening in international prices will continue till the festival season for reasons such as better

crop prospects in India, an increase in soyabean acreage in the US and a high palm oil

production in Malaysia and Indonesia.

In July last year, soybean oil price was hovering around $1,190 per tonne and crude palm oil

price was at around $965 per tonne. The dollar-rupee exchange rate in July 2012 was at

around 55- 55.50. "Consumers were paying more last year for edible oil as the international

prices were higher. In the Indian market too, prices shot up as the monsoon was late. But now

the situation is completely different. Prospects of edible oil are much better this year and we

52

do not see a hike in prices till the festival season," said Sandeep Bajoria, CEO of oil

consultancy firm, Sunvin Group.

Leading edible oil players like Adani Wilmar that markets oil under the brand name Fortune

have passed the benefit of low prices to consumers. Angshu Mallick, chief operating officer,

Adani Wilmar, said: "Edible oil prices have come down by at least Rs 6 per kg but a weak

rupee made imports costlier by Rs 4.50 per kg in the past few weeks. There is still a cushion

of Rs 1.50 per kg. And from today the rupee has just dropped below the 60 level. Therefore,

we do not see edible oil prices to shoot up in the near future. We reduced prices by Rs 1.50

per kg a fortnight ago." Soyabean sowing is almost complete in Madhya Pradesh, the largest

producer. Sowing has also picked up in Maharashtra and Rajasthan. Soyabean prices in the

Indian market are now hovering around Rs 3,600 -Rs 3,650 per quintal.

"Now that the prospect for the crop looks good, it is expected that traders will offload their

stock in the market which will further push down prices," said BV Mehta, executive director,

Solvent Extractors Association of India (SEA). Soybean farmers in the US, the world's

biggest producers, are seen planting a record-high soybean crop, the US Department of

Agriculture said. It is expected that the US will have soybean crop acreage of around 77.728

million acres.

"Harvesting has also begun in South America which will impact the prices. And Indonesia

and Malaysia are all geared up to increase palm oil production," added Bajoria. India imports

nearly 10 million tonne of edible oil, which is about 60% of the domestic demand. At present,

the import duty on crude edible oil is 2.5% and 7.5% on refined edible oil. Domestic demand

is increasing at a rate of 4%-5% annually. "In the current oil year (November 2012 - October

2013), we are expecting imports to go up to 10.8 -11 million tonne," said Mehta.

Soymeal exports up 18% in June 2013, says SOPA (BS 5.7.13)

Export during June 2013 was 0.22 mn tonne against 0.19 mn tonne in June 2012

India soymeal export in June 2013 were up 18% compared with the corresponding month last

year, according to a statement by Soybean Processors Association of India (SOPA).

The export during June 2013 was 0.22 million tonne against 0.19 million tonne in June 2012.

"Looking at it country wise, demand has gone up in Iran," said Rajesh Agrawal, coordinator

and spokesman, SOPA.

Around 112,500 tonne was exported to Iran in June 2013 compared to 83,239.59 tonne in

May 2013, according to SOPA data.

On a financial year basis, the exports during April 2013 to June 2013 stood at 0.42 million

tonne compared with 0.66 million tonne in the same period last year- a decline of around 37

per cent.

On oil year basis, (October 2012 - September 2013), total exports during October 2012 to

June, 2013 stood at 3.1 million tonne against 3.45 million tonne in the corresponding period

last year down by 12.6 per cent. "If arrivals do not increase in the coming days, soymeal

exports in the current oil year may show some shortfall compared with the previous year,"

said Agrawal of SOPA.

53

"We estimate around 0.2 million tonne shortfall in soymeal exports from India in oil year

2012-2013, added Agrawal. India exported around 3.62 million tonne soymeal in oil year

2011-2012, according to SOPA data.

Groundnut sowing touches 1.41 mn hectares in Gujarat (BS 5.7.13)

Sowing may increase with strengthening of the monsoon in the state

Gujarat, one of the leading groundnut growing states in the country, is set for higher

groundnut acreage this kharif season.

In the wake of the early onset of the monsoon, groundnut acreage in the state has already

touched 1.41 million hectares as on July 1. This assumes importance as the average

groundnut sowing (for the last three years) is estimated at around 1.44 million hectares in

Gujarat.

Sowing of groundnut has been done in 1.41 million hectares till July 1 against 0.22 million

hectares in the corresponding period last year, according to the data released by the state

agriculture department. This accounts for 97.6 per cent of the average sowing area for

groundnut in the state. The sowing is expected to increase with the strengthening of the

monsoon in the state.

However, groundnut prices have declined 25 per cent in June this year, on lower export

demand and higher availability. According to traders, the prices have also gone down because

groundnut from Maharashtra, Rajasthan and Uttar Pradesh have arrived in the Gujarat market

for sale.

Normally, the summer groundnut crop is used for export. But, following new regulations,

exports have dipped after February. Traders said while Saurashtra's summer groundnut

production has declined, the overall crop was normal across the country.

The price of groundnut during June had declined by Rs 275 to Rs 700- Rs 840 per 20 kg from

Rs 1,090- Rs 1,100 per 20 kg.

Around 45,000-50,000 bags are arriving in the state every day. Out of these, around 60

percent is coming from other states like Rajasthan, Maharashtra and Uttar Pradesh.

A Rajkot-based groundnut trader, on condition of anonymity, said: "Saurashtra's summer

groundnut production was nominal due to water shortage in this area but other parts of

Gujarat like Bardoli, Panchmahal, Banaskantha and Sabarkantha have had good production

this year."

"On the other hand, demand for groundnut export has decreased, which has pulled down the

price," the trader said.

He further said this year, summer groundnut production in Gujarat was about 100,000 tonnes

while in India, it is expected to be around 500,000 tonnes.

"Summer groundnut cannot be used for crushing as the oil content is lower. A majority of the

54

produce is exported. But this year, export has declined due to new rules for groundnut export.

Shelling units also sold their stock in the open market this time", said Mukund Shah,

president of Gujarat Oilseeds Processors Association.

Throughout the country Area coverage during Kharif 2013 is higher by 16.75 lakh ha

compared to corresponding period of Kharif 2012, result of higher area coverage in the state

Gujarat due to good rainfall. Normal area under groundnut in the country is 4.9 million

hectares.

Refined palm oil imports drop 21% in June (ET 15.7.13)

But imports were still double that of last year and continue to hit oilseed growers and

refiners, with plants operating well below capacity.

Refined palm oil imports fell 20.7 percent in June from the previous month's record, a leading

trade body said, as weakness in the rupee currency made overseas purchases more expensive.

But imports were still double that of last year and continue to hit oilseed growers and

refiners, with plants operating well below capacity.

The world's leading buyer of vegetable oils imported 296,230 tonnes of refined palm oil in

June, the Solvent Extractors' Association (SEA) said in a statement on Monday.

Imports of refined palm oil hit a record in May, jumping 47.5 percent to 373,837 tonnes over

the April figure and continuing a trend triggered by Indonesia's changes to export duties to

make its refined product more attractive.

Higher costs also cut total palm oil imports by 13 percent to 670,762 tonnes from the

previous month, the monthly data released by the Mumbai-based trade body showed.

A Reuters survey had forecast average palm oil imports at 669,285 tonnes in June, including

295,714 tonnes of the refined variant.

Vegetable oil imports up 21% in June (BS 15.7.13)

Edible vegetable oils imports stood at 9,11,091 tonnes while non-edible oils stood at 36,500

tonnes

In the month of June, vegetable oil (edible and non-edible oil) import stood at 9,47,591 tonne

compared to 7,83,315 tonne in the corresponding period last year, up by 21% due to stagnant

55

domestic output and increase in demand has caused imports to move up.

Edible vegetable oils imports stood at 9,11,091 tonnes while non-edible oils stood at 36,500

tonnes.

Over all vegetable oil imports from November to June stood at 7.1 million tonnes compared

to 6.4 tonnes in the same period last year, up by 11.7%.

56

57

MILK

Govt should nurture milk producers, says Nirmala Kurien (BS 30/6/2013)

The Government must take more steps to nurture and protect milk producers, said Nirmala

Kurien, daughter of the legendary Verghese Kurien, the Father of White Revolution.

Inaugurating the Dr V. Kurien Academic Centre at Mehsana, she said milk contributes the

most to agricultural gross domestic product in the country and “therefore the government

does everything in its power to help, nurture and protect milk producers”.

The Dr V Kurien Academic Centre is part of Mansinhbhai Institute of Dairy and Food

Technology at Mehsana that offers BTech course in dairy.

Going down the memory lane, an emotional Kurien said, “My father was in the business of

developing people and milk was only a tool. He worked, lived and died in Anand for 63 years

as an extremely contented and happy man.”

Verghese Kurien, who passed away last year, could establish a profitable milk cooperative

business in Gujarat as he could sell the products at a competitive rate.

Tracing the growth of Amul, which started with a meagre collection of 250 litres milk a day,

Kurien said “At that time there existed Nestle, Cadbury, Polsuns, Unilever, Horlicks but

today Amul is synonymous with milk and it is the largest producer of milk and milk products

and it is owned by farmers”.

“My father believed in empowering the farmers and he never doubted your ability to work

hard and produce more and more if there was a market,” Kurien told hundreds of farmers

gathered at the event.

Stating that the Milk Man of India believed the cooperative model was the only answer to

bridge the gap between the haves and have-nots in the country, Kurien said: “He had no

doubt in his mind that India would be one of the most powerful nations in the world but

worried that 70 per cent of our people who are mostly farmers should also be given an

opportunity to earn more”.

Recalling the contributions of Verghese Kurien, Gujarat Co-operative Milk Marketing

Federation and Dudhsagar Dairy Chairman, Vipul Chaudhury, demanded that the Milk Man

of India should be honoured with Bharat Ratna for the development of dairy sector.

R.S.Sodhi, Managing Director, GCMMF – which owns Amul Brand, said the rising income

levels is driving the growth of milk consumption in India. “The coming three decades will

prove to be golden era for milk producers in India as supplies turn stagnant elsewhere

globally, while the demand grows.”

58

Milk prices up on rising input cost (BS 1.7.13)

Amul takes lead in west; others to follow, blames expenses across categories

Milk prices rose by Rs 2 a litre in the western region from Monday, led by Gujarat

Cooperative

Milk

Marketing

Federation

(GCMMF), the

leader in the

organised

sector.

The reason

given is a rise

in raw material

costs (prices to

farmers) by almost 10 per cent over last year, power rates and petroleum prices, among

others.

GCMMF, which sells packaged milk under the Amul brand, raised its prices by Rs 2 a litre

across all categories in Gujarat, following a similar move a month earlier by Delhi-based

Mother Dairy.

Following the move, many in the unorganised sector raised milk prices by Rs 2 to sell at Rs

54 a litre from Monday.

The price of Amul Gold has gone up to Rs 42 a litre. For Amul Shakti and Amul Taza,

consumers would have to pay Rs 31 and Rs 29 a litre, respectively.

Effective May 27, Mother Dairy had raised milk prices by Rs 3 a litre across varieties.

R S Sodhi, managing director of GCMMF, said: “We had raised milk prices everywhere but

in Gujarat, three months ago. We’ve now taken the price hike to Gujarat as farmers have

raised milk prices in the state...we had to pass on the rise of input costs to consumers.

However, there is no further room for a price hike in the near future.”

“Both input and employee costs have risen sharply in the past one year. Even at this price,

milk is non-remunerative. Hence, another round of hike cannot be ruled out in the near

future,” said Ballibhai Tirji Maradia, president of the Bombay Milk Producers Association.

A log (quintal) of green grass, quoted at Rs 600 three months earlier, has gone up to Rs 800.

Experts say rain have disrupted its supply. The price of kapas khalli (cotton oilseed cake) has

moved up by Rs 200 a quintal in the past three months, from Rs 1,600 a quintal to Rs 1,800 a

quintal. In addition, all grains used as animal feed have become costlier.

The price of milk generally moves along with that of diesel, albeit in lower proportion. In the

past five months, diesel prices have risen seven per cent to around Rs 56 a litre from Rs 52 in

Maharashtra. Transportation is a major component of overall cost.

59

GCMMF had raised milk prices by Rs 2 a litre in north India three months earlier but had not

done so in Gujarat. Delhi-based Mother Dairy raised its prices three months earlier in and

around the national capital but did not do so in western India. According to an official, the

price rise effected three months ago was automatically spread across the country.

Another popular local brand, Mahananda, which generally follows Amul and Mother Dairy,

is awaiting a decision from its board. “We have not taken a final decision. But we cannot rule

out a rise, as animal feed has become costlier,” said a company official.

With the rise, the Baroda District Co-operative Milk Producers’ Union has decided to pay an

additional Rs 10 a kg of fat, to Rs 465, to its 200,000 milk producers.

Mehsana milk body taking Amul model beyond Gujarat (BL 10/7/2013)

The Mehsana District Co-operative Milk Producers’ Union has upstaged the Khera District

Co-operative Milk Producers Union to become the new face of India’s dairy industry.

Mehsana Union handles about half -a-million litres more than Khera Union, which

introduced and made Amul a nationally-known brand. Moreover, the Mehsana Union has set

a trend by setting up its own milk processing facilities outside Gujarat. In June, traditionally a

leaner season, the average milk procured by Mehsana Union was 22.76 lakh litres a day,

while Khera Union handled about 16.08 litres. The Banaskantha Milk Union, which had

emerged as the largest last year, procured about 25 lakh litres during June. The Banas Union

processes about 18 litres in Gujarat and another over 1 lakh litres at its dairy in Virar,

Mumbai, while the remaining 6 lakh litres was sent to Mother Dairy, Gandhi Nagar.

Mehsana, which has been operating a 10 lakh litre processing capacity at Dudhmansagar

Dairy in Manesar, has set up a new facility at Dharuhera in Haryana, at an investment of Rs

400 crore.

The Dudhmotisagar Dairy at Dharuhera, commissioned in October, currently handles about 4

lakh litres a day, but has a processing capacity of 15 lakh litres. Dudhmotisagar will

eventually have a processing capacity of 30 lakh litres a day by August 2015. This apart, the

milk union processes about 10 lakh litres at its flagship dairy - Dudhsagar Dairy in Mehsana.

Among the 16 member unions of Gujarat Milk Marketing Co-oeprative Federation Ltd, the

Mehsana Union leads others in terms of having processing facilities outside the State and

closer to the consumers – mainly Delhi-NCR, the fastest growing market for milk and milk

products.

Interestingly, all the three unions — Mehsana, Banaskantha and Sabarkantha — together sell

about 24 lakh litres of milk under the Amul brand in Delhi, with Mehsana accounting for half

of it.

PROCUREMENT GROWTH

As the growth in milk procurement stagnates in Mehsana on account of growing

industrialisation and rising prosperity, the Union has slowly expanded its catchment area

beyond Gujarat, extending the co-operative procurement model to Rajasthan, Haryana and

Uttar Pradesh in the past three years.

60

The average milk procured by Mehsana Union outside Gujarat stood at 9 lakh litres per day

in June, with over 8 lakh litres coming in from Rajasthan and another 60,000 litres from

Haryana and Uttar Pradesh each.

“We have enrolled about three lakh farmers in about 4,100-odd village-level societies in

Rajasthan. But, the State is yet to allow us to register these societies. We have written to them

in this regard,” said Vipul Chaudhary, Chairman of Dudhsagar Dairy and GCMMF.

However, taking note of the co-operative’s expanding footprint, the Rajasthan Government

recently responded by declaring a subsidy of Rs 2 per litre for milk producers in the State,

Chaudhary said.

Nishith J Baxi, Managing Director of Mehasana Union, said input services offered by the co-

operative, such as the veterinary services, insurance to farmer members and their animals and

supply of cattle feed on a cost basis, had helped them expand rapidly in Rajasthan. The union

intends to replicate and extend its procurement model in Haryana and Uttar Pradesh.

Indian dairy firms eye Southeast Asia (BS 11.7.13)

Skimmed milk powder export to the region could rise to 10,000 tonnes from the present 5,000

tonnes

The dairy sector expects a surge in its export to Southeast Asia, where local entities seem

unable to satisfy a growing demand for milk. Insiders say skimmed milk powder (SMP)

export to the region could rise to 10,000 tonnes from the present 5,000 tonnes.

"Across Asia, India is the only country with surplus milk. Above all, we have the location

advantage to cater to the Southeast Asian market. Also, price competitiveness is there," said

R S Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation (GCMMF),

which sells products under the Amul brand.

Milk consumption in the area is mainly driven by high birth rates, rising incomes, improving

diets, growth in modern retailing, urbanisation and countrywide school milk programmes.

Competition is rising among international dairy companies, with six countries in the

Association of South East Asian Nations bloc - Indonesia, Malaysia, the Philippines,

Singapore, Thailand and Vietnam - increasingly depending on imports. A Rabobank report

said dairy trade flows into the region surpassed 1.6 million tonnes in 2012, equating to a $5.5

billion export opportunity. The region is one of the few remaining dairy battlegrounds and the

boom in demand has triggered intense competition among producers.

"We expect dairy consumption across the Asean-6 to grow 2.4 per cent per year through to

2020. This creates a requirement for an extra three billion litres of milk, which local players

are ill-equipped to deliver," said Rabobank analyst Michael Harvey.

"We see 7,000-8,000 tonnes of SMP exports every month. Farmers benefit from this, as we

get a good price from the international market," said Sodhi. Amul alone exported around Rs

100 crore worth of SMP in April-June. It eyes Rs 300 crore of export this financial year.

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According to sector insiders, Indian SMP costs around $3,450 a tonne. Competing nations

such as Australia and New Zealand charge $3,550-3,650 a tonne. A stronger dollar against

the rupee further benefits exporters. "Prices are getting lucrative. When the dollar was Rs 56,

the price was worked out at Rs 193; now it is over Rs 207 a kg," said Viney Mahajan,

associated with a private dairy in North India.

Rabobank analysts say outcompeting rival companies will not be enough to secure victory in

this market. Exporters must also conquer a number of structural challenges, such as food

price inflation, protectionist policies and supply chain inefficiencies.

"Southeast Asia is a major market. Milk powder export is a commodity business; hence, our

advantage is our quality and price. However, despite having surplus milk production, we are

still a marginal exporter. We export hardly one per cent of our total production," said R G

Chandramogan, chairman, Hatsun Agro Products. The company exports SMP to some

countries in the region, he said. India's total milk powder exports are likely to touch 100,000

tonnes this year.

Milk union calls for supply of milk powder to schools (BL 15/7/2017)

The Dakshina Kannada District Cooperative Milk Union Ltd has suggested that the

government supply milk powder to schools. This follows a decision by the Karnataka

Government to supply milk to school students in the State.

Speaking on the sidelines of the inauguration of a high-speed milk packing machine at the

Mangalore dairy of the union here on Monday, Raviraj Hegde, president of the union, said

that around 4.67 lakh students come under the jurisdiction of the union. They will require

around 72,000 litres of milk. (Dakshina Kannada and Udupi districts come under the

jurisdiction of the union).

However, the union brings milk from other districts to meet the requirements of customers

under its jurisdiction. The total production in these districts is around 2.8 lakh litres a day,

and the demand is around 3.5 lakh litres a day.

In such a situation, the Government can think of supplying milk powder from other districts

to schools in Dakshina Kannada and Udupi districts, he said.

There are reports that some districts in the state have surplus milk production. They can

supply milk powders to other districts where there is a deficit in milk production, he said.

Many of the cooperative societies under the jurisdiction of Dakshina Kannada District

Cooperative Milk Union Ltd want to know who will bear the cost of milk under the

Government’s scheme for school students, and when they would get the money, he said. (The

union has around 650 primary milk producers’ cooperative societies under its jurisdiction).

In such a situation, the government should take steps to release money to the milk unions in

advance. Any delay in payment to milk unions will affect the interests of farmers, he said.

At present, the Mangalore dairy has the capacity to pack around 70 packs of milk in a minute.

With the new high-speed machine, around 140 packs can be packed in a minute. This

machine has the capacity to pack around 8000 to 10000 packs in an hour. The machine has

62

been set up at a cost of Rs 12 lakh. vinayak.aj@thehindu.co.in (This article was published on

July 15, 2013)

Organised sector share in milk biz should rise to 50%: Pawar (BS 24.7.13)

At present, about 30% of milk is marketed by the organised sector

To ensure sufficient supply of milk at affordable rates, Agriculture Minister Sharad Pawar

today said there is a need to increase the share of organised sector in milk business to 50% by

the end of the current (12th) Five Year Plan in March, 2017.

Despite severe drought in some states like Maharashtra this year, milk production has not

reduced, thereby providing good supplementary income to farmers and sufficient supply of

milk in the market, he said.

"India, with 128 million tonnes of production, now ranks first among milk producing nations.

We need to target that by the end of this Five Year Plan period, at least 50% of milk in the

country is handled by organised sector," Pawar said addressing a CII event here on dairy

sector.

At present, about 30% of milk is marketed by the organised sector, he said.

Stating that sustainable development of India's dairy sector will be in true spirit of 'inclusive

growth', Pawar called upon both private and cooperative sectors to invest in especially in

improved infrastructure for milk collection, testing, processing and product development and

establishing market for diversified products.

Dairy contributes close to a third of the gross income of rural households and in case of those

without land, nearly half of their gross income, he added.

While noting that the private sector has an important role in enhancing sustainability of dairy

sector, Pawar pointed out that the private companies in most cases adopts a strategy not

conducive to farmers.

During flush season, the private sector reduces procurement of milk and procurement prices,

sometimes to a level which is uneconomical to farmers, he said and suggested them to

maintain a consistent strategy that would benefit both farmers and consumers.

He also suggested the private sector to establish a strong backward linkage with farmers by

providing extension and marketing services to milk producers.

Besides ensuring remunerative price to farmers, the Minister said the dairy industry needs to

ensure both availability and affordability of milk and its products to consumers.

The government has launched the National Dairy Plan Phase-I with a total investment of

more than Rs 2,200 crore for 12th Five Year Plan (2012-2017) to meet the projected demand

of 150 million tonnes of milk.

63

On fodder supply to livestock, Pawar said the shortage in the country is estimated to be 36%

and the government has taken initiatives to improve the supply.

‘Private sector must ensure remunerative price to milk producers’ (BL 25/7/2013)

Agriculture Minister Sharad Pawar on Wednesday exhorted the private sector to adopt a

consistent strategy for sustainable development of the dairy sector.

Inaugurating the India Dairy Summit 2013, organised by the Confederation of Indian

Industry, Pawar said the private sector, which currently handles more than half of the

marketable surplus milk, had an important role in enhancing sustainability of the dairy sector.

However, he pointed out that in most cases, the private companies adopt a strategy that is not

conducive to farmers.

“During flush season, the private sector reduces procurement of milk and procurement prices,

sometimes to a level which is uneconomical to farmers” Pawar said, adding that such a

problem was acute in some States in 2012-13.

“Probably this has prompted some States to provide price incentives to farmers on milk

supplied to co-operatives to mitigate the increased cost of production,” Pawar said, stating

that such a trend was not desirable as it was the responsibility of dairy industry to provide

remunerative prices to farmers.

The Minister also urged the private sector to establish a strong backward linkage with farmers

by providing extension and marketing services to milk producers.

Amrita Patel, Chairperson, National Dairy Development Board, said that the private sector

needed to collect milk directly from the producers, as was being done by the co-operatives,

and not through contractors. Alternatively, like the private companies abroad, they could

source their requirement of milk from co-operatives, she added.

Patel said the private sector and co-operatives should work together to ensure that export of

milk powder takes place only after meeting the domestic demand of both.

“If there is a higher need to be paid to match export prices, then this should be paid, rather

than the country resorting to centralised bulk imports,” Patel said, adding that co-operatives

should seriously think of changing their policy of not purchasing milk powder from private

companies.

The NDDB Chairperson also felt that there was an urgent need to work on increasing bovine

productivity to meet the increasing demand for milk and milk products.

It is estimated that the country will need 150 million tonnes milk by 2016-17 from the current

132 million tonnes.

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65

VEGETABLES/ ONION-POTATO

Vegetable prices rise 50 per cent owing to bad weather (ET 26.6.13)

Vegetable prices have risen up to 50% in Delhi, Mumbai and other parts of the country as

farms near the Yamuna river in northern India are flooded, while dry weather in many parts

of western India have hit output.

Vegetable prices have risen up to 50% in Delhi, Mumbai and other parts of the country as

farms near the Yamuna river in northern India are flooded, while dry weather in many parts

of western India have hit output.

The deluge in parts of northern India has also wiped out muskmelon and watermelon apart

from hurting the mango crop. Traders said it would take two to four weeks for prices to

stabilise. In Delhi, prices of brinjal and tomato have doubled, both retailing at 50 a kg, while

in Mumbai, bottle gourd, bitter gourd, ridge gourd (tori), round gourd (tinda) and cucumber

have risen over 50%.

The surge in prices renews concerns over food inflation, which has been persistently high in

recent years, barring occasional dips. "Rains and flooding in the past few weeks across

Punjab, Haryana and western Uttar Pradesh have damaged the standing and flowering crop. It

will take a fortnight for supplies to pick up," said Pradipta Sahoo, head of horticulture at

Mother Diary, a co-operative retailer. Of the daily procurement of 250-300 tonne of fresh

vegetables for Safal stores, 30% of supplies come from the Yamuna belt, he said.

The Yamuna belt spans across Uttar Pradesh, Delhi to Haryana covering major vegetable

regions of Karnal, Panipat, Sonepat, Delhi, Faridabad, Kosi, Mathura, Agra, Kanpur and

Allahabad. Apart from vegetables, muskmelon and watermelon grown on river beds have

been wiped out, said traders. Similarly, black spots have developed on mango crop in areas

where incessant rain arrived ahead of harvesting.

The Centre has asked states to assess the losses due to heavy rains and floods, said Sanjeev

Chopra, joint secretary and mission director, National Horticulture Mission & National

Mission on Micro Irrigation, Ministry of Agriculture.

"There has been a huge damage to the crop, crippling supplies to most parts of north Indian

states. Looking at the rising onion price (wholesale price at 18 a kg in Delhi and 15 a kg in

Mumbai) we are offering states the option of stocking onion through the National

Agricultural Cooperative Marketing Federation of India (Nafed)," he said. Retail onion prices

are at 30- 40 a kg.

66

Traders pointed out that supplies of arbi and red chillies from Uttar Pradesh to southern states

have slowed down. "We are not getting vegetables like red chillies and arbi from the north

and prices have firmed by 30% to 35 a kg in a week," said Prakash Thakkar, secretary of the

Vashi mandi in Mumbai.

According to him, vegetable prices remained high this year because farmers didn't go for

vegetable sowing due to the lack of water. "Major supplies from Madhya Pradesh, Gujarat

and Maharashtra are low. With a good spell of rains, we expect things to improve in a

month," he said.

Heavy crop damage in hilly states lifts onion, potato prices (BS 3.7.13)

Stockists hold on to onion expecting further price rise as new crop will hit the market only in

October

Onion and potato prices shot up sharply across the country, except north India, on supportive

fundamentals. While the damage of potato crop in the hilly areas, especially in Uttarakhand

and Himachal Pradesh, lifted traders’ sentiments, stockists held onion in anticipation of

further price rise until the new season crop hits the market in October.

Data compiled by the Nashik-based National Horticulture Research & Development

Foundation (NHRDF) showed that onion prices rose by up to 41 per cent in the last two

weeks on reduced supply from stockists. Guwahati was the worst hit in price rise with 41 per

cent, followed by Mumbai at 31.48 per cent.

Potato followed suit with prices swelling by up to 42 per cent in Hubli (Karnataka). In

Kanpur, one of India’s largest producing centres, potato prices jumped a marginal 7.14 per

cent in the last fortnight.

“Stockists have started releasing stocks intermittently in anticipation of lower quantity of

goods in warehouses. Since stocks at 2.7

million tonnes are 5-10 per cent lower

across the country, compared to the last

year, stockists are making profits to the

maximum extent possible,” said R P

Gupta, director, NHRDF.

According to Tariq Anwar, minister of

state for agriculture, onion production is

estimated to remain lower by 4 per cent at

16.82 million tonnes during FY13.

This year, however, early monsoon

rainfall has benefited onion sowing.

Thus, overall area during the kharif

sowing season is estimated to remain 15-20 per cent higher from the level of around 200,000

hectare (ha) in the previous year. Early and late kharif seasons constitute around 20 per cent

each, while the remaining 60 per cent of around 1 million ha acreage is covered in rabi

67

season.

Apparently, onion arrivals have declined steadily during the past two weeks. Plying of truck

was hampered due to heavy rainfalls across the country. For potato, however, June-July is a

harvesting season when crop matures in hilly areas. Because of the recent flood in

Uttarakhand and Himachal Pradesh, a major portion of crop has been damaged.

“While the assessment of crop damage is yet to be done, we believe a major portion of

around 20,000 ha of sowing area in Uttarakhand has been washed away due to the

devastating flood,” said a senior official with a potato research firm.

Meanwhile, exports to Bangladesh have opened through the land rout. Additionally,

excessive demand from north India is keeping pressure on existing stocks. Since the new crop

is set to hit the market only in October, the prices of these sensitive commodities are set to

remain firm.

A Mumbai-based trader does not rule out onion and potato price to hit Rs 30 a kg and Rs 20 a

kg in nearby APMC mandi.

Vegetables, fruit burn a hole in the pocket as prices go through the roof (BS 6.7.13)

A majority of people shifts to pre-cooked and ready-to-eat food to keep their food budget

intact

The skyrocketing prices of vegetables and fruit have forced changes in the lifestyles of a

majority of the middle and low-income group people in India.

Over 56 per cent middle and low-income group people in

India have shifted to pre-cooked and ready-to-eat food items

to protect the kitchen budget from sharp increases due to

costlier food and vegetables, said a study by the Associated

Chambers of Commerce and Industry of India.

The fear of a bad monsoon has suddenly hiked the

vegetables and fruit prices by 300 per cent from the farm to

your dining table, reveals the Assocham survey on "Rising prices of fruit and vegetables", in

which at least 5,000 people took part.

Over 88 per cent of the middle income group (MIG) and lower income group (LIG) find it

difficult to manage the household budget.

During the last three years, the salary of an average common man has gone up by 10-15 per

cent, but on the other side, prices of vegetables have also gone up by 250-300 per cent.

The survey was conducted in cities such as Delhi-national capital region, Mumbai, Kolkata,

Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Dehradun and Bengalore. The

maximum impact was felt in cities like Delhi, Mumbai, Ahmedabad, Kolkata, Chennai,

Hyderabad and Pune. Around 82 per cent of lower middle class families have been forced to

skip or squeezed their budgets for vegetables because of skyrocketing prices.

The prices of most of the widely consumed vegetables have shot up during the last two weeks

68

in most parts of the country with the early onset of monsoon rains. The sudden increases of

vegetables prices have seriously hit the common man mainly in the metro cities, says D S

Rawat, secretary general of Assocham.

The relatively affordable tomatoes, cabbage cauliflower, lady finger and potatoes basic

ingredients in most Indian meals are moving away from the middle class family reach as

prices continue to soar, says the survey.

Fruit have also become a luxury for the lower middle class. One spends less on buying a litre

of fruit juice than a kilo of fresh fruit. Packed fruit juices appeared to be a better option for

them.

Rising prices of fruit and vegetables have upset the budgets of middle and lower class

families, particularly affecting those below the poverty line. The fact that prices of some of

the essential commodities have increased further has created great dissatisfaction.

The rise in vegetable price has come as a double-shocker for the denizens. Tomatoes are

selling at Rs 60 a kilo, with ladyfinger at Rs 50 a kg and brinjal at Rs 40 a kg. Apart from

these vegetables, capsicum is being sold at Rs 80 a kg, bitter gourd at Rs 80 a kg and gourd

bottle at Rs 20 per piece. Though cauliflower and cabbage too are available in the market,

vendors are extracting anything between Rs 55 and Rs 60 for a small piece.

Fresh arrivals in mandis may lower tomato prices, keep onion in check (FE 9.7.13)

Consumers feeling the pinch of skyrocketing vegetable prices, particularly those of tomato,

are likely to get relief in the next two weeks.

An official with Agricultural Produce Market Committee (APMC) of Azadpur, the country’s

biggest fruit and vegetables market, said that against a daily arrival of 25 trucks (each having

15-tonne capacity) at the mandi, there were only 5-7 trucks arrivals since June 16, when

cloudbursts destroyed crops and damaged roads in Uttarakhand and HP.

Supply constraints have resulted in tomato’s retail price jumping to R80 per kg in many

places in Delhi and northern India, from R20 a kg in early June. “The number of truck

arrivals has increased during the last few days and prices are expected to decline during the

next two weeks,” Rajinder Sharma, chairman, APMC, Azadpur, told FE.

Besides, the early arrival of monsoon and excess rainfall in northern India also disrupted

tomato-picking operations. Similarly, onion prices have increased during the last few weeks

on fears of a decline in kharif production. However traders from Nasik said that wholesale

onion prices have been in the range of R1,500-1,600 per quintal for the last one month.

“There is enough stock to meet demand for the next two months, after which the kharif crop

is set to enter the market (by September),” CB Holkar, board member, Nafed and a farm

leader from Nasik said.

69

Onion tops Rs 2,000/quintal on supply shortfall (BL 12/7/2013)

Onion prices have run past Rs 2,000 a quintal this week in markets around growing centres of

most States following supply shortfall.

Views on the reason for the supply shortage are divided. Officials and traders are also divided

on how onion will behave the next couple of weeks.

“Some people are keeping stocks intact with them. They seem to believe in releasing the

stocks slowly to reap benefits of higher price,” said R.P. Gupta, Director of Nashik-based

National Horticultural Research and Development Foundation.

“Supply is lower because we have had a 30 per cent lower crop last season (July-June) in

view of drought, especially in Maharashtra,” said C.B. Holkar, Vice-Chairman of National

Agricultural Cooperative Marketing Federation. On Friday, the modal price or the rate at

which most trades took place was Rs 1,940 a quintal.

Quality produce commanded prices over Rs 2,000.

On Wednesday, the modal price had run up to Rs 2,025. Prices had surged to such levels

early in January before the late kharif crop cooled markets.

“Farmers and traders have ample stocks with them. Since they have facility to store kharif

onion, they are releasing in tranches,” said Gupta.

“Stocks are limited because of lower crop. Most of the farmers had cashed in on the crop

when prices touched Rs 900,” said Holkar.

With monsoon affecting onion crop in Uttar Pradesh, demand for Maharashtra produce is

now coming from Delhi and Kolkata, said Holkar, adding that this was also aiding the price

rise.

“Prices may not rule higher than Rs 2,000 from now on,” said Gupta.

But Holkar differed saying prices are likely to surge further.

“The drop in prices in the last two days is due to fears of ban on exports. But it is not

coming,” he said.

Export demand is good, with shipments gaining in value this fiscal.

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During April-June 5.11 lakh tonnes of onion were exported at a value of Rs 776 crore against

5.18 lakh tonnes valued at Rs 506 crore.

Onion prices more than double to Rs 36-40/kg in metros (ET 23/7/2013)

Onion prices have more than doubled to Rs 36-40 per kg in retail markets of metro cities in

last one year, adding to the woes of consumers already burdened with overall price rise.

Currently, onion is being sold at Rs 36 per kg in retail markets of the national capital and Rs

32 per kg each in Mumbai, Kolkata and Chennai, according to the Consumer Affairs

Ministry that monitors prices of 22 essential food items.

In some markets, onion is being sold at more than Rs 40 per kg depending on localities and

quality, traders said.

Retail price of onion had stood in the range of Rs 14-15 per kg a year ago in these cities, the

Ministry data showed.

The hike in onion rate has disturbed kitchen budget of most consumers, who are already

facing the brunt of high prices of tomato, pulses and cereals.

"Normally, vegetables are costlier during monsoon. But this year, there has been exceptional

rise in prices of onion as supply is affected due to heavy rains in growing states,"

anAgriculture Ministry official said.

New crop from main growing states like Maharashtra is expected to hit consuming markets

from October onwards and till then onion prices would be under pressure, he said.

Amid spiralling onion prices bringing tears to consumers, easing of tomato prices has brought

some relief to retail consumers in metros.

Prices have come down to Rs 40-50 per kg from the high of Rs 80 per kg in Delhi. A similar

trend is seen in other cities as well, traders at Azadpur mandi said.

However, potato prices remained stable from the year-ago period. It is currently available in

the range of Rs 11-24 per kg in retail markets of metros, the ministry data said.

As far as pulses and foodgrains were concerned, the analysis of data revealed that retail prices

rose by 15-16 per cent in last one year.

In metros, wheat has risen by 20 per cent to Rs 18-26 per kg and rice by 16 per cent to Rs 28-

30 per kg during the period under review.

Barring gram dal, prices of tur, urad, moong dal and masoor dal showed an increase of upto

16 per cent in last one year. However, vegetable oil prices have come down marginally in the

same period.

71

To check onion price rise, Govt may look at ban on exports (BL 24/7/2013)

With onion prices continuing to rise across the country, the Government may be compelled to

consider placing a temporary ban on exports among other policy intervention.

An inter-Ministerial team of senior officials from the Ministries of Commerce, Agriculture

and Consumer Affairs will meet soon to take stock of the onion situation in the country to see

if market intervention was required, a Commerce Department official told Business Line.

A representative from NAFED, the Government’s agriculture procurement and marketing

agency, will also attend the meeting. The possibility of selling subsidised onions through

NAFED mobile vans is also likely to be considered, the official added.

NAFED has in the past come to the rescue of the Government by providing partial relief to

consumers by selling onions at low prices when retail prices shoot up. Although Agriculture

Minister Sharad Pawar has openly voiced his views against banning onion exports, the

Commerce and Consumer Affairs Ministries are yet to take a view.

“The committee of Joint Secretaries will examine all factors, including the movement of

domestic prices, the reason for rising prices, existing international prices and the onion stock

in the country before taking a view on the matter,” the official said.

Onion prices have risen to over Rs 40 a kg in the retail market, especially after heavy rains hit

transportation.

The average retail price rise in the country over last month has been Rs 10-20 with the

steepest hike in Delhi, Siliguri, Indore and Dehradun, according to Government estimates.

Onion prices have risen mainly because of heavy rains in producer States, including

Maharashtra disrupting production and transportation to mandis.

Prices are likely to ease only in October when the new onion crop comes into the maket.

The country exports 10 per cent of the total onion production.

It exported 5,11,616 tonnes worth Rs 776.47 crore in the first quarter of the fiscal against

5,17,274 tonnes in the year-ago period.

Agriculture Minister Sharad Pawar not in favour of onion export ban (ET 24/7/2013)

Amid rising onion prices hurting consumers, Agriculture MinisterSharad Pawar today said he

was not in favour of a ban on onion exports, saying such a move will hit India's image as a

global supplier of farm produce.

The Minister said the rise in onion prices is a "temporary situation" as heavy rains in major

producing states like Maharashtra have affected supplies.

"It is not fair to ban export of any agricultural commodities. ...India has now established its

position as a major supplier of agricultural items in the global market. If we ban exports, this

72

image will be affected. So, we are against export ban on onion," Pawar told reporters on the

sidelines of a CII event on dairy sector.

The country's agricultural exports have increased to Rs 2.33 lakh crore during the 2012-13

fiscal, as against Rs 1.86 lakh crore in the previous year, he said.

According to sources, both Consumer Affairs and Commerce ministries are mulling over

banning onion exports for short term to bring down its domestic prices and give relief to

consumers, who are already burdened with overall price rise.

Asked when onion prices are expected to cool down, Pawar said, "It is a temporary situation.

Heavy rains in key producing states has affected supplies. Rains has affected crops as well as

transport and logistics."

The retail price of onion has risen to Rs 35-40 per kg in Delhi and most parts of the country,

while the wholesale price has increased to Rs 25 per kg at Lasalgoan in Maharashtra, Asia's

biggest onion market.

Onion prices are likely to be under pressure till October when the new crop is expected to hit

the market.

According to official data, India has exported 5,11,616 tonnes of onion amounting Rs 776.47

crore in first quarter of this fiscal against 5,17,274 tonnes in the year-ago period.

Although production is expected to be normal at around 15-16 million tonnes this year, lower

crop in states like Tamil Nadu has put pressure on Maharashtra.

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SUGARCANE/ SUGAR

Tripura to continue supplying sugar through PDS: Manik Sarkar (BS 26.6.13)

The CM says one kg of sugar will be provided to each ration card holder at subsidised price

of Rs 13.50 per kg

The Tripura government will continue supplying sugar at subsidised rate through ration shops

despite the central government's decision to stop giving sugar as a Public Distribution System

(PDS) commodity, Chief Minister Manik Sarkar said Wednesday.

"The recent decision of the central government to discontinue supply of sugar through the

PDS from this month is a part of the government's plan to abolish the system. This is an

unprecedented attack on the common people," Sarkar told reporters here.

The chief minister said that to provide some relief to the PDS consumers in rural as well as

urban areas, one kg of sugar would be provided to each ration card holder at the subsidised

price of Rs.13.50 per kg against the market price of Rs.43 per kg.

"The additional financial burden will be borne by the state government," he added.

"The Left Front government has already communicated to the central government its

concerns over the discontinuation of sugar supply through the PDS. We have demanded that

northeastern states be kept out from this decision. But the centre has remained unheeded,"

Sarkar said.

"The central government told the states that it wanted to give financial support of Rs.18.50

per kg to the consumers. But compared to the market price of sugar, this support is very less,"

he added.

"After decontrolling the prices of petroleum products, the UPA (United Progressive Alliance)

government is trying to abolish the PDS for the benefit of big businessmen, sugar mill owners

and industrialists," said Sarkar, who is a politburo member of the Communist Party of India-

Marxist (CPI-M).

The central government recently decided to remove the levy obligation on sugar mills, under

which every sugar mill had to surrender 10 percent of its production to the central

government at a pre-determined price, enabling the government to get access to low-cost

sugar stocks for distribution through the PDS.

The removal of the levy obligation was a long pending demand of the sugar mill owners.

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India signs 75,000 tonnes sugar export deals for July : Dealers (ET 1.7.13)

The deals were signed between $500 to $510 per tonne FOB basis with most set to be

exported from Jawaharlal Nehru Port Trust in Mumbai, dealers said.

Traders have signed deals to export 75,000 tonnes of white sugar in July, reversing an import

trend after the rupee's depreciation and with strong demand in Gulf and African states due to

the Islamic fasting month of Ramadan.

The deals were signed between $500 to $510 per tonne free on board ( FOB) basis with most

set to be exported from Jawaharlal Nehru Port Trust in Mumbai, four dealers told Reuters.

"Due to Ramadan there was demand for white sugar from Sri Lanka, Gulf and African

countries, but they needed prompt shipments," said Kamal Jain, managing director of sugar

brokerage Kamal Jain Trading Services.

The holy month of Ramadan starting July 9, when Muslims fast from dawn to sunset,

routinely sees a rise in demand for sugar.

India, the world's biggest consumer of sugar, became an importer of the sweetener in 2012-13

after exporting sugar for two straight years. Changing weather conditions can make India an

exporter one year and importer the next.

But raw sugar imports have dropped dramatically as a fall in the rupee to a record low

squeezed margins for refiners amid a drop in local prices.

"Exports were not viable, but depreciation in rupee gave traders an opportunity (to export),"

said Jain.

Sugar mills sold the sweetener to merchant exporters at around 28,000 ($470) to Rs 28,500

per tonne at factory gate, said an official with a Maharashtra based co-operative sugar factory

that sold sugar to a Mumbai-based merchant exporter.

"Domestic demand is weak and mills needed money to make cane payments to farmers. So

mills reduced ex-factory prices to exporters," the official said.

Indian sugar futures were trading near their lowest level in a month on weak demand from

bulk buyers like ice-cream and cold drink makers due to an early arrival of monsoon rains.

"No one is importing right now. There is no parity. There is also uncertainty over import

duty. If government doubles duty, then suddenly refiners calculations will go wrong," said

another dealer based in Mumbai.

India's farm minister has sought to increase the import tax on sugar, although the proposal

was opposed by the country's food minister.

India is likely to produce 24.6 million tonnes of sugar in 2012/13, an industry body has said,

against an annual demand of about 23 million tonnes.

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Indian sugar gains brief window for exports (ET 3.7.13)

A lack of Pakistani sugar available for export and strong demand before the Muslim festival

of Ramadan have created opportunities for Indian sales to nearby markets, but the window

for foreign sales risks closing soon.

Ramadan starts on July 9 and is followed by three days of celebration after it ends on Aug. 7.

As it passes, the associated demand for sugar will dwindle and India's domestic consumption

for festivals will rise, driving Indian prices up above levels that would be competitive abroad.

Reversing a trend for imports, traders this week reported Indian white sugar export deals

totalling 75,000 tonnes in July, stoked by a weak rupee and strong demand in the Gulf and

Africa linked to Ramadan.

Indian mills have chances to sell to markets such as Sri Lanka partly due to dwindling

supplies of Pakistani sugar.

"Mills in Pakistan have very little quantity to offer," said Muhammad Najib Balagamwala,

chairman of Karachi-based SeaTrade group.

He said nearly three-quarters of an allowed 1.2 million tonnes had been exported from

Pakistan.

"For the remaining quantity, deals have been signed and registered with the state Bank of

Pakistan," he said. "If some deals get cancelled, then other exporters will get permission to

export that much."

Pakistan was expected to return as an important exporter next season as the outlook for next

year's crop looks favourable, dealers said.

TIGHTROPE

"Indian exporters are walking a tightrope," said Kamal Jain, managing director of brokerage

Kamal Jain Trading Services. "Going ahead it would be very difficult to sign new deals."

A senior London-based analyst with a trade house said he was surprised to hear of recent

Indian export business.

"The domestic market is paying more than the world market could or should be paying," the

analyst said.

An exporter based in Mumbai, who sold a few cargoes to Sri Lanka for July shipment, saw

limited scope for Indian exports in coming months.

"The maximum, I think, India can sell would be 50,000 tonnes more in the next two months.

From August onwards local prices will start rising. We have festivals," he said.

"Then it would be difficult to convince mills to sell sugar at lower prices to exporters."

"In the last week of June, the weak rupee, falling local prices and strong demand due to

Ramadan allowed sugar mills to strike a few deals," the exporter said.

"Pakistan's absence from the market also gave a boost. Pakistan was selling sugar at very low

prices. It sold even at $470 per tonne. India can't do that. Local prices in India are higher than

that."

Some Indian millers are not prepared to sell below $480 per tonne, trade sources said.

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Sugar output may drop 5.2% in 2013-14 on dry spells, says Isma (FE 10.7.13)

India’s sugar output will likely drop 5.2% in the next marketing year starting October 1 due

to dry spells in parts of Maharashtra and Tamil Nadu, but production will still exceed

consumption, a top industry body said on Tuesday.

Sugar output in the world's second-largest producer may touch 23.70 million tonne in 2013-

14 compared with 25 million tonne a year before, the Indian Sugar Mills Association (ISMA)

has forecast. The country usually consumes 21-23 million tonne of sugar a year.

The country is also expected to pile up surplus stocks of eight million tonne in the beginning

of the next marketing year, which will keep supplies steady and prevent any irrational spiral

in prices, according to industry executives. Wholesale prices of sugar have dropped by

roughly 10% in the past 6-7 months due to ample stocks.

ISMA has also predicted a 1.5% drop in areas under the cane crop in 2013-14 at 5.15 million

hectare. The cane planting forecast, however, is 8% higher than the agriculture ministry's

estimate until June 26.

"The difference might be due to the fact that the ministry of agriculture's reported figures are

based on a still-ongoing field survey in a couple of states like Uttar Pradesh, Bihar and other

sub-tropical zones, where the crushing season last year (2012-13) started late than usual and,

therefore, the survey is still not complete," ISMA said in a statement.

ISMA has predicted that Uttar Pradesh will have record sugarcane acreage in this season —

about 3.1% higher than last year — despite the mills having piled up huge cane arrears of

about R4,000 crore in July. This is because sugarcane fetched much higher returns than

competing crops such as wheat and paddy, thanks to a 17% hike in the benchmark price fixed

by Uttar Pradesh for 2012-13. Other sub-tropical states, like Haryana, Bihar and Madhya

Pradesh, are also showing an increase in sugarcane acreage over the last year.

"However, due to drought in Maharashtra last year, there has been lower cane sowing there,

and it is estimated that there would be a 12.5% drop in sugarcane crop acreage over the last

year," ISMA said. The impact of last year's lower rainfall in the state on the 15-18 month

duration crop has hurt overall acreage in 2013-14 as well, it added. Similarly, cane area is

expected to drop by around 8% in Karnataka. However, planting in Tamil Nadu may be

affected the worst, with a 15-16% fall in area in 2013-14, thanks to lower rainfall during the

south-west monsoon season (June- September) and the north-east monsoon season (October-

December) in 2012-13.

ISMA will review the country's production estimate before the commencement of cane-

crushing around Diwali.

‘Sugar import duty hike inadequate’

The hike in the import duty on both raw and refined sugar to 15% from 10%, notified late

Monday, is “too little and too late”, ISMA said. While imports are still viable due to falling

prices abroad, the government needs to checks purchases from overseas to trim its current

account deficit, which is also stoking the depreciation of the rupee, it said.

"Even though the rupee has depreciated against the dollar, the Brazilian real has also

depreciated similarly. Therefore, the weaker rupee has not made raw sugar imports coming

from Brazil unviable due to this small increase in the duty. There is so much sugar within the

country that duty needs to be raised to a level of around 30-40% to totally check imports," the

association said.

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Significantly, while the rupee has weakened by 12.3% against the dollar since May, the

Brazilian real has depreciated 13% against the greeback. Moreover, the customs duty on

sugar is among the lowest among farm and food items, compared with 100% on tea, 70% on

husked rice and 50% on maize.

Even if global raw sugar prices rise to 17 cents a kg, each tonne of sugar processed from the

imported raw sweetener would cost roughly R33,000 in the domestic market for domestic

refiners closer to the port, factoring in the costs of purchase, revised duty, handling,

transportation and refining, said an industry executive. This means raw sugar imports are still

viable as the cost of white sugar production from local cane in Uttar Pradesh is R35,000 per

tonne. Raw sugar prices on the ICE were ruling at 16.37 cents per lb on Tuesday.

As much as 6,75,000 tonne of raw and white sugar has landed in the country. A subdued

trend in sugar prices on international futures markets suggests that imports may rise in the

coming days while another round of hike in cane prices in 2013-14 by states like Uttar

Pradesh will make it even harder for mills to cope with the soaring cost of production,

industry executives said last week.

Maharashtra drought to hit sugarcane production (BS 10.7.13)

Output would be 23.7 mn tonnes as compared to 25 mn tonnes in 2012-13

Drought in Maharashtra, the country's biggest sugar producing state, is likely to pull down

India's overall production in the 2013-14 crop season (it starts from October) by five per cent.

Output would be 23.7 million tonnes as compared to 25 mt in 2012-13, shows a preliminary

estimate of the Indian Sugar Mills Association (Isma).

It says sugarcane sowing in the 2013-14 season is expected to be 5.15 mn hectares for the

country, 1.5 per cent less than last year, mainly due to drought in Maharashtra. In Uttar

Pradesh, despite huge cane payment arrears, Isma says farmers will still be interested in

sowing because of high prices in comparison to wheat and paddy. Cane acreage in UP is

expected to 3.1 per cent higher than last year. UP and Maharashtra together contribute a little

over 80 per cent of total sugar production in the country.

In Maharashtra, sugarcane acreage is expected to fall by 12.5 per cent in 2013-14, with the

drought in the main growing areas. Sowing is also down by almost eight per cent in

Karnataka due to low rainfall. Isma says the the opening sugar balance for the 2013-14

season will be around eight mt, around two mt more than the usual figure.

A weak rupee and Ramzan-triggered higher demand boast sugar exports (ET 17.7.13)

Thanks to a good demand from West Asian countries due to the ongoing month of Ramzan,

Indian traders are offering sugar in the international market in the range of $500 per tonne.

A weak rupee and Ramzan demand have boosted sugar exports at a time when the freeing up

of state controls have led to a rise in supplies and a fall in prices. Mills have committed

around 1.5 lakh tonne of sugar for export to neighbouring countries. Thanks to a good

demand from West Asian countries due to the ongoing month of Ramzan, Indian traders are

offering sugar in the international market in the range of $500 per tonne. Last month, around

69,000 tonne of sugar was exported by India.

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With the rupee depreciating to around 60 against the dollar, traders have committed huge

amounts of sugar for exports, said a trader. Exports in the 2012-13 sugar season have touched

7 lakh tonne till now. Around 34 lakh tonne sugar was exported in 2011-12. During 2010-11,

exports were around 26 lakh tonne.

Analysts however are calling it a fleeting trend because Brazil is exporting huge amounts the

world over. Global prices have crashed due to over-supply from the world's largest sugar

producer. Similar to the devaluation of the Indian rupee, Brazilian currency real has also

crashed. "The Indian exchange rate is similar to the Brazil rate currently. Huge amounts of

sugar coming from Brazil have pushed down US futures prices from 17 cents/lb last month to

16.38/lb currently," said the trader.

Another expert said that although the price offered by the sellers is around $500 per tonne,

there are few buyers at this price. "The final selling price of raw sugar is around $475-$450

per tonne and this means a $25 per tonne loss for traders. Similarly, refined sugar's sale price

is around $465 per tonne," said a market expert. "At an ex-mill price of Rs 28 per kg, the

export price works out to be Rs 27 per kg. But no one will sell at a loss. When the rupee

depreciated, 1.5 lakh tonne of sugar was sold. But since then, there has been no export

parity," said the trader.

Sugar production this season (October 2012-September 2013) is expected to reach 24.5

million tonne, higher than the domestic demand of 22 million tonne. A similar trend is

anticipated next year, with acreage and production expected to increase with the advent of a

good monsoon.

Major sugar importers from India are the neighbouring countries, East African countries like

Sudan and Somalia and West Asian countries.

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INPUTS

MNCs going all out to push new-gen pesticides (BL 27/6/2013)

The new generation pesticides being marketed by multinationals in India have three broad

characteristics, captured in DuPont’s highly successful Rynaxypyr insect control molecule

sold as ‘Coragen’ suspension concentrate and ‘Ferterra’ granular formulation.

SPRAYING LESS

The first is that, being based on completely new chemistry and novel modes of action, they

require low levels of spraying.

Sugarcane farmers, for instance, need to use just 150 ml of Coragen formulation that is

diluted in 400 litres of water for every acre. For paddy, soyabean, tomato, arhar or chilli, the

requirement is even lower at 60 ml/acre.

Compared this with old generation pesticides such as chlorpyrifos, monocrotophos or

endosulfan, where farmers typically had to spray anywhere from 250 ml to one litre, leaving

behind higher traces of residues in the soil and up the food chain.

Reduced spraying, in turn, is the product of new research. Anthranilic diamides – the class of

insecticide molecules to which Rynaxypyr or Bayer’s Flubendiamide (‘Fame’) belong –

basically work on the ‘ryanodine receptors’ in insect pests that regulate the release of stored

calcium critical for their muscle function. By binding to these receptors, the diamide

compounds cause uncontrolled release and depletion of calcium, leading to muscle paralysis

and ultimately the death of the insects.

PATENT PROTECTED

That links up with the second characteristic of the new generation molecules, which are far

more efficient and, hence, require lower amount of application for controlling target pests:

They are mostly patented.

DuPont’s patent for Rynaxypyr was filed in August 2002, which confers it protection for at

least another nine years. This is unlike an earlier molecule, Indoxacarb, which DuPont had

launched in India in 2000 under the ‘Avaunt’ brand.

Since Indoxacarb was patented in 1992 and India did not recognise any product patents filed

before 1995, this insecticide (used to control cotton bollworm) could not get any protection

against ‘me-too’ players.

With the likes of Gharda Chemicals and Atul Ltd coming out with their generic versions at

price 30-40 per cent lower– not to speak of the strides made by Bt cotton, providing in-built

genetically engineered resistance to bollworm – ‘Avaunt’ sales are today half of what they

were in the peak year of 2004.

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There are no such problems in Rynaxypyr, introduced in India at the same time as in other

markets.

“Patent protection is a huge incentive for us to bring the latest products from our research

pipeline. The next major insecticide we are planning to launch is Cyazypyr, which would be

for kharif 2014,” said Ram K. Mudholkar, Business Director (South Asia) of DuPont’s Crop

Protection division.

Cyazypyr (or cyantraniliprole, as the molecule is called) is again from the same anthranilic

diamide class of chemicals and, of course, fully patent-protected.

PRICE TO BE PAID

That connects to the final characteristic. Since the new generation pesticides enjoy patent

protection, it endows extra pricing power to the companies selling them.

For a sugarcane farmer, the cost of a single 150 ml dose of ‘Coragen’ formulation works out

to Rs 1,600 an acre. This is about a fourth of what he would pay for a single spray of

pesticides based on the older chemistries.

But the difference – which is where the new chemistry comes into play – is that farmers were

earlier also having to spray four times.

“To control kansuan (early shoot borer) and choti vaidak (top borer), I used to apply ‘Caldan’

(cartap hydrochloride) twice and also ‘Thimet’ (phorate) two times. Each of these sprays cost

Rs 400 an acre. Practically speaking, I am ending up paying the same,” noted Tejpal Singh, a

30-acre farmer from Kalsoura village in Haryana’s Karnal district.

But the important thing, according to him, was that “previously I used to harvest 28-30

tonnes of cane an acre, whereas that has now gone up by 5-7 tonnes.” And this clearly had to

do with better control over kansuan and choti vaidak, courtesy ‘Coragen’.

“For now, Coragen is certainly working against these pests and has given us value for money.

What will happen tomorrow I cannot say,” said Mewa Singh, who grows sugarcane on 20 out

of his 50-acre holding in Chorpura, also in Karnal district.

P Chidambaram hints at subsidised gas rates for power, fertiliser units (ET 28/6/2013)

A day after deciding to nearly double natural gas prices to $8, Finance Minister P

Chidambaram today hinted that power and fertiliser units may get gas at subsidised rates to

keep electricity and urea costs down.

Stoutly defending the move to raise price from current $4.2 per million British thermal unit,

Chidambaram said investment in domestic oil and gas hunt had dramatically fallen in absence

of remunerative prices, resulting in sharp dip in production that was being made up through

costlier imports.

After deliberating on the proposal for over one-and-half hours, the Cabinet Committee on

Economic Affairs (CCEA) last evening approved pricing of all domestically produced natural

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gas at an average of the cost of imported liquid gas (LNG) on long-term contract and

international gas benchmarks.

The pricing according to the formula, which was suggested by a panel headed by Prime

Minister's economic advisor C Rangarajan, will be applicable to all domestic gas from April

1, 2014. Gas rates will change every quarter based on average imported cost and international

hub rates and this formula would be valid for five years.

The increase in gas price was opposed by user ministries of power and fertiliser as it would

lead to cost of generating electricity spiking to Rs 6.40 per unit from Rs 2.93 and nearly Rs

9,000 crore per annum rise in cost of urea output.

"At the moment we are fixing only output prices (rates payable to gas producers). This will

indeed have impact on the consumer, but those prices are not being fixed today," the Finance

Minister said adding that the price power and fertiliser companies will pay for gas are not

being fixed now.

"What is the price at which it should be supplied to a power plant, to a fertiliser plant in order

to make power affordable, fertiliser affordable... that can still be decided between now and

April 1," he said.

Stating that the government was conscious of keeping power and fertiliser prices low, he said,

"It could be tweaking prices or it could be bearing additional subsidy. There are various

methods but at the moment we are not addressing those issues."

FinMin to farmers’ rescue, asks banks to lend more against warehouse receipts (BL

30.6.13)

The Finance Ministry has directed banks to set internal targets for lending against Negotiable

Warehouse Receipts and increase servicing of such receipts, according to Dinesh Rai,

Chairman, Warehousing Development and Regulatory Authority.

The Food Ministry has recognised over 125 agricultural commodities, 26 horticultural

produces and registered over 374 warehouses that can issue such receipts which can be

transacted without physical transfer of stocks from the warehouse or used as collateral to

raise loans, he said.

Electronic receipt

A warehouse receipt is a document that provides proof of ownership of commodities that are

stored in a warehouse for safekeeping. Small and marginal farmers can raise loans at seven

per cent interest on these receipts as against 11 per cent for others.

Soon electronic receipts will be issued to speed up the process, Rai said.

The National Bank for Agriculture and Rural Development hopes to register over 10,000

warehouses under the cooperatives by the year-end.

The authority has sought food infrastructure status for agricultural and horticultural storage

and the Planning Commission was open to the idea. Also, once the Goods and Services Tax

regime is rolled out, investments in warehouses will come into the mainstream.

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For tax breaks

Now, warehouse owners set up the facilities for tax breaks in remote locations and these are

under exploited.

K.V. Thomas, Union Minister of State for Food and Consumer Protection, said the Ministry

hopes to encourage investments in storage spaces.

Over two million tonnes of modern silos are planned for food grain storage across the

country.

M.P. Nirmala, Food Secretary, Tamil Nadu, said the Primary Agricultural Cooperatives have

warehouse capacities.

The cash-strapped cooperatives have been rejuvenated but have huge accumulated losses.

This is a handicap when it comes to getting accreditation to issue negotiable receipts.

The conditions have to be relaxed, she said.

AP farmers can buy subsidised seeds online (BL 01/7/2013)

Forget about B2B, B2C and other such abbreviations that denote electronically deliverable

conversations and services between businesses to consumers and business to businesses.

Farmers in Andhra Pradesh are calling it G2F or Government-to-farmer services.

They need not stand in serpentine queues and wait for hours, and sometimes days, to get their

packet of seeds. They now can book their slot using Mee Seva, the Government-to-citizen

service offered through 7,000 centres. “Mee Seva system will be utilised for distribution of

subsidy seeds under various programmes. The seed supplying agencies will ensure the

availability of seeds as per the bookings made these centres. Issues related to crop subsidy too

could be handled using this service,” Ponnala Lakshmaiah, Andhra Pradesh Minister for IT,

said. The Government organised a meeting on Monday to commemorate completion of two

crore transactions under Mee Seva service. “Of the two crore, 70 lakh applications have been

cleared in 15 minutes.” Chief Minister N. Kiran Kumar Reddy and Digvijay Singh, who is in-

charge of AP’s Congress affairs, took part in the meeting.

Mee Seva would also take care of certain services such as reconnaissance permit, mining

lease and granite quarry lease (in Mining Department); renewal of establishment and issuance

of duplicate certificates (Labour Dept); and age certificate, duplicate memo, re-counting of

marks and migration certificate (Education Certificate), the Minister said after the event.

Gujrat organic farmers to develop seed banks to take on GM seeds (ET 01/7/2013)

About 500-odd organic farmers in Gujarat are trying to develop individual seed banks in a

bid to resist the onslaught of genetically modified seeds.

"The farmers are now developing seed bank as a measure against the invasion of genetically

modified (GM) seeds," Organic Farming Association of India (OFAI) president Sarvdaman

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Patel said.

The biggest advantage of developing seed banks is reduced cost. A bank of organic seeds will

not only ensure reduced cost, but also assure good yield and above all good health to people,

said Patel, who owns an organic farm in central Gujarat's Anand district.

"10 grams tomato seed, for example, costs Rs 400 in the market. But every few months, a

new company emerges in the market with a new, costly hybrid seed, which may guarantee

better yield but not in the longer run," he said.

As and when the farmers succeed in developing the seed bank, they will be taught to store

and preserve it in bottles, shelf or any dark place.

"Once they develop seed banks, we (OFAI) have assured them of educating them how to

store and utilise these seeds through workshops and seminars across the country," he said.

However, developing seed banks will take time as it involves several selection trials to

identify a good quality seed.

"Sometimes it takes two to three years in selection trials, and once the selection trials are

over, only then can a quality seed be developed," Patel said.

As of now, some farmers in the state have developed individual seed banks of wheat, rice and

some vegetables.

Patel also regretted that the present day farmers were unaware of the old practices and

techniques of preserving seeds.

"Today, farmers don't plan which seed they will sow this year. Earlier, farmers used to sow

different seeds every year to know which will benefit them the most," he said.

The input cost of organic seeds is just 2 per cent of the production while that of hybrid seeds

is 15 per cent, Patel said, while adding that some north-eastern states,

Chhattisgarh andUttarakhand are into organic farming in an elaborate manner.

By default, close to 50 per cent of farmers in the country are into organic farming as they are

unable to afford pesticides and chemical fertilisers, he claimed.

Congress in Karnataka announces 0% interest on short-term farm loans (ET 12/7/2013)

The Congress government inKarnataka on Friday announced loans tofarmers at zero per cent

up to Rs two lakh and enhancement of creamy layer limit of backward classes by Rs one

lakh, as it sought to implement key election promises less than two months into office.

84

Presenting the "revised" 2013-14 budgets in the Legislative Assembly -- the BJP government

had unveiled the first in February before being voted out, Chief Minister Siddaramaiah said it

would be at the interest rate of one per cent for Rs two lakh to Rs three lakh from cooperative

institutions.

Earlier, short term loan up to Rs one lakh was provided at zero per cent interest and at one per

cent interest from Rs one lakh to Rs three lakh.

Siddaramaiah, who has the distinction of presenting seven budgets in the past and kept

thefinance portfolio himself this time, announced that the creamy layer limit of Backward

Classes would be enhanced from the existing Rs 3.5 lakh to Rs 4.5 lakh.

"Caste wise, social and education survey of all castes will be undertaken through Permanent

Backward Classes Commission", he said.

The Chief Minister announced reduction of sales tax on diesel from 16.75 per cent to 15.65

per cent. "With this tax reduction at current prices, the price of diesel would come down by

51 paise per litre at Bangalore", Siddaramaiah said.

The government proposed to increase the rate of additional excise duty by 16 per cent to 40

per cent across all the 17 slabs.

He said relief and measures for additional resource mobilisation along with effective

compliance and enforcement measures are expected to fetch additional Rs 1452 crore.

VAT rates which had been increased from five per cent to 5.5 per cent, and from 14 per cent

to 14.5 per cent for a period of one year from August 2012 was proposed to be continued

beyond July 31 this year, Siddaramaiah said.

The budget had something to cheer for schoolgirls, women and transgenders.

To encourage enrolment and attendance of girls in first standard in government schools, Rs

two would be given to girls for each day's attendance.

The Government intends to provide scholarship and free education to students, whose parents

are affected with HIV/Leprosy, for higher education, according to the budget, which also said

free ten sanitary napkin pads would be provided to 32.50 lakh females.

A new scheme called "Manaswini" would be introduced to provide monthly pension of Rs

500 to the unmarried women below poverty line who have crossed the age of 40 years and for

divorced women below the poverty line.

A new scheme "Mythri" would be launched for providing monthly pension of Rs 500 to

transgenders.

Siddaramaiah said the total receipts are estimated to be Rs 1,20,717 crore during 2013-14,

while the total expenditure is estimated to be Rs 1,21,611 crore consisting of revenue

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expenditure of Rs 97,391 crore and capital expenditure of Rs 18,380 crore and debt

repayment of Rs 5,840 crore. "Revenue surplus is expected to be Rs 596 crore", he added.

Imported urea cost come down by around 20% in Q1 of 2013-14 (BS 25.7.13)

The government has lowered the fertiliser subsidy marginally to Rs 65,971.50 cr for the

current fiscal

India has imported urea at around 20% cheaper price in the first quarter of this fiscal as

compared with the average cost for last financial year.

The cheaper urea imports could lead to lower subsidy burden on the government if domestic

demand of urea remains constant.

Urea is being currently sold to farmers at maximum retail price (MRP) of Rs 5,360 per

tonne. The difference between the MRP and production/imported cost is paid by the

government to producers.

The government has lowered the fertiliser subsidy marginally to Rs 65,971.50 cr for the

current fiscal.

India has imported about 11.09 lakh tonnes in the April-June quarter of this fiscal, up by

nearly 50% from the year-ago period.

"The average cost of imported urea in the first quarter of current fiscal was at around $340

per tonne while the average cost for the entire 2012-13 was $417 per tonne," a Fertiliser

Ministry official said.

The imported cost of urea had reached as high as $535-540 per tonne during last fiscal, the

official said, adding that the average cost does not include imports of urea from OMIFCO in

Oman which costs around $170-$175 per tonne.

India's domestic production of urea is about 220 lakh tonnes. The country imported 80.44

lakh tonnes in the entire 2012-13 fiscal. Urea is imported mainly by the three canalising

agencies - Indian Potash Ltd (IPL), MMTC and STC.

"Looking at the trend in the global market at present, it seems unlikely that cost of imported

urea will cross or touch last year's average price of $417 per tonne," he said.

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OTHER AGRI COMMODITIES/ NEWS

Jairam Ramesh warns against use of genetically modified food crops (ET 01/07/2013)

Rural development ministerJairam Ramesh has warned against opting for genetically

modified (GM) food crops in the name of providing better nutrition.

Sounding a cautionary note, Ramesh who presided over the launch of 'Lancet Series on

Maternal and Child Nutrition', said, "Another issue, which bothers me, particularly from the

presentation on agriculture, I want to strike a word of caution here. The step from recognising

the importance of agriculture in nutrition to making a case for genetically engineered GM

crops is a very small step."

Ramesh, who as environment minister oversaw a massive public consultation on genetically

modified or Bt Brinjal, stressed "It is a step that is that can be taken... I think one has to be

careful here. Because it is very mesmerising and very seductive to have rice which is fortified

with vitamin A, a wheat which is fortified with iron and all the wonderful things that have

come out with through transgenetic techniques."

These comments come in the wake of a recent decision of the Genetic Engineering Appraisal

Committee (GEAC), the statutory body on genetically modified crops, to allow field trials for

four food crops-- genetically modified rice, wheat, maize and castor. The environment

ministry, which has the final say put the decision on hold keeping the ongoing case in

the Supreme Court on GM crops in mind.

"We have been through a debate in the country On Bt Brinjal and You have a sense of deja

vu on this. You went through it for almost two years and all the arguments ...the nutrition

argument that was given in the context of Bt brinjal. But there are many other issues are

equally important. Safety, toxicity, testing and most importantly the control of seed supply,"

the minister said.

Ramesh isn't the only one voicing these concerns. Last year, a six-member committee of

technical experts set up by the Supreme Court recommended a ten-year moratorium on field

trials of all genetically modified or Bt food crops. The panel came to this conclusion on the

basis of the current overall status of food safety evaluation of Bt transgenics, including a

review of the data on Bt cotton and Bt brinjal.

In its unanimous report, the panel called for moratorium till specific sites for conducting field

trials have been designated and certified, and sufficient mechanisms for monitoring the trials

put in place.

Sharad Pawar asks Maharashtra govt to implement vegetable farming scheme (ET

01/7/2013)

Union Agriculture Minister Sharad Pawar today asked Maharashtra governmentto implement

the Central scheme of encouraging vegetable farming within the 50 km radius of cities and

towns with 10 lakh populations.

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"Last year, a budgetary provision of Rs 300 crore was made for the purpose of encouraging

vegetable farming within 50 km radius of cities and towns with 10 lakh population. The state

government needs to take up the scheme and implement it in the state. This will help farming

as well as citizens will get vegetables at affordable rates," Pawar said.

He was speaking at a agriculture awards function organised to mark the birth centenary of

late chief minister Vasantrao Naik.

Pawar said that the export of agriculture produce had helped to increase the country'sforeign

exchange reserves.

He also expressed concern over agriculture research taking a backseat due to several reasons

like the issue of genetically-modified seeds being sub-judice and objections from different

quarters. "Due to this, there are no good sentiments among agriculture researchers," he said.

Earlier, Chief Minister Prithviraj Chavan in his speech voiced concern over the rising

vegetable prices in Mumbai.

"I had discussed the issue with Pawar and felt that the price rise was due to prevailing

drought situation and decrease of sowing area of vegetable crops," Chavan said.

He said there was a ongoing debate on whether genetically modified (gm) seeds are secure or

not. "Central government has prepared a bio safety protocol. The state government has set up

a committee headed by Anil Kakodkar to take decision regarding permitting trials," he

added.

Paying rich tributes to Naik, the state's longest serving chief minister, Pawar said the late

leader was a firm believer in democratic values. "He believed that even a fiercest opponent

needs to be treated with respect. It was under Naik government that decision to accord

Cabinet rank status to a leader of opposition was taken," Pawar said.

Monsoon: The best June in 12 years (BL 02/07/2013)

This June has turned out to be the best ever for the

Indian monsoon in the past 12 years.

According to the India Meteorological Department

(IMD), the country has received an area-weighted

rainfall of 216.3 mm, which was 32.3 per cent higher

than the ‘normal’ or historical long-period average

(LPA) for the month.

The last time it rained so much in June was in 2001,

with the all-India average of 219 mm. In all, there have

been only eight years since the start of the 20th century,

which have received more rains in June than the month

that just went by: 1980 (219.8 mm), 1978 (218.1 mm),

1971 (240.6 mm), 1938 (277.2 mm), 1936 (252.1 mm),

1917 (218.1) and 1916 (233.8 mm).

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A good June need not, however, translate into a good monsoon season as such. The year 2002

saw June receive 9.4 per cent surplus rainfall (vis-à-vis the LPA). But, 2002 witnessed a bad

drought, with the monsoon season (from June to September) ending with a deficit of 19.2 per

cent.

The same thing happened in 2004, when there was only a marginal shortfall of 0.8 per cent in

June, but the season ended with a 13.8 per cent deficit.

The last drought year in 2009 witnessed the worst ever June with a 47.2 per cent rainfall

deficit. The worst case scenario this year could be if a repeat of 2002 happens. That year

witnessed surplus rains in June but a severe deficit of 54.2 per cent in July, making it the

worst ever in the country’s meteorological history for that month. Good rains in June usually

spur large-scale early sowing by farmers. But if the July rains falter, the crop that has been

sown early may experience moisture stress, affecting its vegetative growth.

That happened in 2002, and the hope now is that it will not repeat itself this month.

The IMD has predicted normal rains for July and August this year. Rainfall is expected to be

101 per cent of LPA for July and 96 per cent of LPA for August.

Agri-varsity courses for farmers without age, qualification bar (BL 02/7/2013)

The country’s first and only private open agriculture university, which began functioning

here in January this year, has opened its doors for farmers offering them courses without any

age bar and qualification restriction.

“Our syllabus and curriculm are entirely different than other universities and are innovative.

We are conducting classes on out-demonstration farms near here in Katol and the response is

good,” Chancellor of Arvind Agricultural (Open and Virtual) University, Dr Mukund

Gaikwad said.

The Arvind Agriculture Open and Virtual University will use high-technology involving

experts of various agro-produce in the world for sharing their experiences and teaching

farmers directly here in virtual classrooms, he told PTI.

The widely travelled Chancellor said it will tie-up with leading agriculture universities for

knowledge transfer and field visits.

He said that marketing, one of the basic bottlenecks in agriculture, is being addressed by the

university.

“This summer we have started with exporting 700 tonnes of mango from Western

Maharashtra. Now, plans are afoot to help Vidarbha farmers by exporting vegetables from

this region. As a pilot project we have been growing vegetables at our demonstration field at

Wadvihira in Katol (Nagpur rural). We plan to export 500 tonnes of vegetables,” he said.

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“Farmers of Vidarbha need to take up innovative measures like diversifying to vegetables and

pulses besides cash crops like cotton and soyabean to increase their income. Only if they do

this, the economic distress that has led to the suicide crisis can be resolved,” Gaikwad said.

Arvind University aims at a paradigm shift in farm education by offering tailor-made courses

and thats why we have chalked out 50 courses that would range from a daylong workshop to

four-year Ratna without any bar for age or qualification, he added.

“One of the basic objectives behind starting the first open agriculture university in the

suicide-crisis-hit Vidarbha region, is to root out despondency among young farmers about ills

of agriculture.If technology and best practices are adopted, farming can be a boon and not a

bane,” the senior academician asserted.

After three decades of teaching in conventional farm colleges, he took voluntary retirement to

tour world as a visiting professor.

Now, he has accepted the assignment to build the Open University promoted by

Maharashtra’s former Agriculture Minister and also former Pradesh Congress Committee

chief, Ranjeet Deshmukh.

Gaikwad says in last four decades, traditional agricultural universities have failed miserably.

“They are white elephants and have hardly done any path-breaking research that could be

implemented by farmers. These farm colleges have become factories churning out degree

holders,” he lamented.

Most of the development in agriculture sector is through private enterprise and not through

the government-aided farm universities’ agriculture department, he pointed out.

Record rains in June aids power, agricultural output (ET 2/7/2013)

Agriculture output is poised to accelerate and power deficits will narrow as the monsoon has

begun bountifully in its first month, irrigating fields and filling up reservoirs with the heaviest

June rainfall in more than a decade.

Rainfall has been 32% above normal in June, injecting moisture into fields and preparing

them for early sowing of kharif crops and reducing the farmer's need for electricity or diesel

to pump water into fields.

A heavy rainfall in the Himalayan region has helped key reservoirs such as Bhakra and Tehri

accumulate huge reserves of water, much higher than normal. This will help generate more

electricity and irrigate fields. Of the 85 main reservoirs across the country, 60 now have 80%

of normal storage, which is expected to help rabi crop sowing later in the year. Crop planting

has already jumped, according to official data. By June 28, total sown area had jumped to

250.99 lakh hectare from 135.87 hectare at this time last year.

"There has been an unprecedented sowing this year with a good spread of rainfall. If the dry

spell is not for a longer duration, we should be looking at a bumper harvest," said AK Sikka,

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deputy director general (Natural Resource Management), Indian Council of Agricultural

Research. Deficient and erratic rains in 2012-13 reduced grain output to 252.36 mt from

259.32 mt in 2011-12.

The four-month-long rainy season began on June 1, recording 216.3-mm rainfall till June 30,

which was 32% above normal. According to the MD, it was after 12 years that the country

received such heavy rains in June. In 2001, the country received 35.6% normal rainfall at 219

mm in June and it saw a 37.7% above normal rainfall at 219.8 mm way back in 1980.

Monsoon was weak in 2002, 2004, 2009 and 2012, which impacted sowing pattern, yield and

production. Apart from increasing acreage, no major change in crop pattern and good

production, the rains will also help farmers who mainly grow long-duration crops like cotton,

sugarcane and those in rainfed regions to save on labour, diesel and electricity cost to run

tube wells.

"Initial signs are good. If the trend continues, it will be beneficial not only for farmers and

consumers but for the economy. Our growth rate has slowed down in the last two years.

Agriculture can provide the much-needed push. It will also help in keeping a check

oninflation and macro economic stability," said Ramesh Chand, director, National Centre for

Agricultural Economics and Policy Research, New Delhi. July and August are of extreme

importance as the maximum spell of rainfall is received during these months which helps

moisten the earth for sowing and to mature planted crops. A good monsoon is of particular

importance for paddy (42% of area is rainfed), which constitutes more than 60% of the kharif

crop. "Farmers in Punjab and Haryana exploit water resources and ensure that the crop is

good even in a drought year. However, this is not the case in other parts of the country.But

we see rains helping farmers immensely in Uttar Pradesh, Bihar and Chhattisgarh," said

Sikka.

Rich harvest for agri-biz grads (BL 03/7/2013)

Top multinationals such as DuPont, Bayer Crop Science to Cadbury and Indian biggies such

as ITC Agri, Mahindra, Shriram Bioseed, YES Bank and Bharat Insecticide have lapped up

management graduates in agri-biz.

The handsome salaries offered to the batch of 2013 at MANAGE here show that the demand

continues to be high in the sector, despite the general slowdown in hiring in corporate sector

in the country.

The Post-Graduate programme offered here has been a big draw.

With 100 per cent placement to show, the average, annual cost to company (CTC), for

students is Rs 7 lakhs.

A girl student got the highest CTC of Rs 18 lakhs.

The post-graduate diploma in management programme (agri-business management), offered

by the National Institute of Agricultural Extension Management (MANAGE) had a total of

58 students in the batch of 2013, that graduated recently.

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About 30 companies participated in the campus placement this year said B. Srinivas,

Director-General of the premier Institute. MANAGE started this course 17 years ago to

prepare skilled agri-business managers for the growing domestic agriculture sector.

It has been having a good run as far as placements are concerned, he said.

Interestingly, the average CTC for the earlier batch of 2012 was around Rs 6.9 lakhs and the

highest offer was Rs 13.5 lakhs.

The IIM, Ahmedabad offers a post-graduate programme in agri-biz, said K. Anand Reddy,

Director (HR) at MANAGE.

In the last few years, the institute has helped NAARM, Hyderabad, and the Choudhury

Charan Singh, National Institute of Agriculture Marketing, Jaipur, to start similar

programmes to prepare more professional managers, he said.

Among the corporates who participated in the campus placement were Advanta, Connect

Agri, Dhanuka, FINO, IFFCO Kisan Sanchar, ITC Foods, KEMIN, Magma, MTR, Nabcons,

NCDEX, NETAFIM, NSEL, Rasi Seeds, Sathguru, Sresta, Super Agri, etc.

The two-year programme at MANAGE is meeting the demand for professional managers

capable of handling a whole gamut of operations from farming to procurement, supply chain

and retailing.

It is also providing impetus and encouraging students to entrepreneurship and create techno-

managers to serve public, private and farming sectors.

Gujarat eyes bumper crop as monsoon revives (ET 5/7/2013)

As monsoon rains returned after a two-week recess in the last three days, Gujarat is expecting

a bumper crop this year.

The State has already received nearly 32 per cent of its average annual rainfall of 800 mm.

Sowing has been completed in half of the normal area under kharif cultivation.

In particular, over 90 per cent of the area under cotton and groundnut has been covered in the

Saurashtra region, which received a bountiful first spell of rains in early June.

Besides similar progress has been made in area under other crops.

Overall, sowing has been completed on 33 lakh hectare (ha) out of 37 lakh ha. If the current

trend of widespread rains, followed by sunny days continues, Gujarat expects to reap bumper

crops and even increase its total area under kharif cultivation to 90 lakh ha. Across Gujarat,

out of 88 lakh ha of the three-year-average area under kharif crops, sowing has been

completed in 45 lakh ha until now, Agriculture Department sources told Business Line on

Friday.

This includes cotton sowing in 20 lakh ha and groundnut in 14 lakh ha, besides guar,

soybean, bajra, jowar, maize and vegetables.

Last year, cotton was sown in 27 lakh ha and groundnut in 14.5 lakh ha.

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The north, central and eastern Gujarat districts have also received widespread rains,

prompting farmers to sow castor and other crops in large swathes of areas.

The current year’s monsoon has been so bountiful that kharif crops’ sowing, so far, has been

five times in 45 lakh ha, compared to just 9.50 lakh ha last year.

In Central and South Gujarat, paddy has so far been sown in nearly 30,000 ha, against an

average 7.30 lakh ha.

Kharif sowing soars on timely, widespread rain (BL 05/7/2013)

The pace gathered in kharif planting on timely and widespread rains in June sustained

momentum during last week, with total acreage crossing more than a third of the normal area

for the season so far.

The rapidly expanding acreage is primarily on account of higher area covered under oilseeds,

coarse cereals, pulses, cotton and rice.

So far, the total acreage is higher by about 86 per cent over the corresponding last year, aided

by the best ever June rains across the country in the past 12 years.

Oilseeds acreage has seen the biggest leap this year and the area covered so far has

quadrupled to about 110.27 lakh ha over the corresponding last year.

The increase is primarily on account of higher acreage in Madhya Pradesh, where farmers

have completed planting of soyabean in about 49.29 lakh ha, almost 90 per cent of the normal

area of 53.45 lakh ha in the State.

Last year, soyabean acreage for the corresponding week stood at a mere 4.15 lakh ha.

Similarly, in Maharashtra, soyabean acreage has almost doubled to about 23.12 lakh ha

against corresponding last year’s 12.55 lakh ha.

Planting of groundnut in the key state of Gujarat has progressed swiftly and the sowing is

complete in almost 83 per cent of the normal area.

Groundnut has been planted in 14.09 lakh ha in Gujarat against last year’s 2.19 lakh ha. Total

area under groundnut stood at 22.59 lakh ha against last year’s 5.84 lakh ha.

Rice acreage is higher by about 22 per cent over the corresponding last year with States such

as Punjab, Chhattisgarh and Haryana reporting higher areas.

Except for the central and eastern India, the intensity of monsoons weakened during the week

with half of the 36 sub-divisions reporting deficient and scanty rains.

The total rainfall across the country was higher by about four per cent at 59.1 mm during the

week against corresponding last year’s 57.1 mm.

The acreage under pulses has also quadrupled with higher areas reported in states such as

Karnataka and Uttar Pradesh.

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Total acreage of tur (arhar) is up at 6.58 lakh ha against last year’s 1.50 lakh ha, while the

area under uradbean is up higher at 5.72 lakh ha (0.72 lakh ha). Moongbean acreage has seen

an increase to 4.37 lakh ha (1.01 lakh ha).

The area under coarse grains has almost trebled with farmers planting more of maize, bajra,

jowar and ragi.

Area under maize has more than doubled to 36.54 lakh ha against last year’s 15.23 lakh ha

with states such as Karnataka, Maharashtra, Rajasthan and Uttar Pradesh reporting higher

acreages.

Among cash crops, the area under cotton stood at 81.73 lakh ha, about 75 per cent more than

corresponding last year’s 46.61 lakh ha.

While acreages have doubled in States such as Maharashtra, Andhra Pradesh and Karnataka,

it has more than trebled in Gujarat and Mahya Pradesh so far.

In Gujarat, the acreage stood at 19.91 lakh ha against last year’s 5.38 lakh ha, while in

Andhra it was 10.90 lakh ha (9.04 lakh ha), Madhya Pradesh 6.09 lakh ha (1.71 lakh ha) and

Maharashtra 28.19 lakh ha (14.97 lakh ha)

Escorts to provide farm equipment on rental to small farmers (ET 05/7/2013)

Escorts India is setting up a nation-wide dealers network to provide expensive farm

machinery at affordable rates to small and marginal farmers on rental basis, a top company

official said today.

The company would appoint dealers across the country, who in turn would train students or

skilled labourers to work in the field of farmers by giving machinery on rent, Rajan

Aggarwal, Head, Crop Solutions, Escorts Agri Machinery, told reporters here.

The machinery like Rotopuddler, wet leveler, automatic tray seeding machine, weeder, and a

unique harvester, are costly at about Rs 40 lakh and are out of reach of poor farmers, he said.

Stating that labour shortage, coupled with disinterest among the new generation to continue

in agriculture and migrating to urban areas, had resulted in decline in production, Aggarwal

said that Escorts wanted to bring advanced technologies in the field, so that the farmers

sustain their income, through custom hiring, since they were not in a position to buy

machinery on individual capacity.

The company has already appointed 10 dealers in Andhra Pradesh, where four already started

operations, and three in Tamil Nadu, who would become operational by the end of this month

or middle of next month, he said.

Aggarwal, here to demonstrate the machinery in Tamil Nadu Agricultural University, said the

fourwheeled Rotopuddler would the job of seven days within three and half hour in a two

acres, while the power weeder will remove weeds among the rice crop in an acre in three

hours time, without damage to paddy.

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The response in Nellore, Kakinada and Vijayawada in Andhra Pradesh where this concept

become operational was tremendous and similar encouraging response was expected in entire

South India, he said.

Depending on the success, the company would extend the service in other crops like wheat,

sugarcane and maize, Aggarwal said.

Uttar Pradesh receives moderate to heavy rains, monsoon normal in west (ET

07/7/2013)

With the southwest monsoon remaining normal in the state, moderate to rather heavy rain or

thundershowers occurred at isolated places in Uttar Pradesh in the past 24 hours.

Met office sources said that chief amount of rainfall recorded in cms- Bansi 11, Thakurdwara

10, Moradabad 8, Sahabad 5, Bansi, Basti, Bareilly and Rampur 4 each, Bisauli 3 and Kanpur

2.

The sources said the southwest monsoon has been normal in western UP and weak over the

eastern parts of the state.

It informed that rain and thundershowers would occur at many places over west UP and at a

few places over east.

Met officials forecast heavy rain would occur at one or two places over the state during the

next 48 hours.

Meanwhile, Sharda river was flowing above danger mark at Paliankalan in Lakhimpur and

Ghaghra was above red mark at Elgin Bridge in Barabanki.

Kharif crop to gain as Met sees good rains in July too (ET 8/7/2013)

After receiving a 32% above-average rainfall in June, the country is likely to get good rainfall

in July too. According to IMD officials, the Madden-Julian Oscillations (MJO) has become

favourable for themonsoon and will result in good rainfall from mid-July. This will benefit

kharif crops, which have been sown early due to timely monsoon.

D Shivanand Pai, head of IMD's long-range forecasting division, said, "The Madden-Julian

Oscillation has become favourable for Indian monsoon. This will provide good rainfall by

mid-July, especially over central India and the west coast." MJO is the convection zone

moving from west to east and is currently entering the Indian Ocean. Last year, MJO was not

favourable when India received deficient rainfall in June.

Due to timely monsoon, kharif sowing till July 5 this year was almost double the area at

401.69 lakh hectare compared to 215.07 lakh hectares during the comparable period in the

previous year.

According to agriculture experts, though sowing has been timely, yield will depend upon the

July rainfall. As the crops have been sown early, they will be harvested early. Thus, even if

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the rainfall in the second half of the season does not remain favourable, it may not affect the

yield much. For the country as a whole, cumulative rainfall during this year's monsoon has

been 27% above the long period average (LPA) up to July 3. The cumulative seasonal rainfall

activity continued to be in excess over all the four homogeneous regions except east and

northeast India, where it was 37% below LPA.

However, during the week from June 27 to July 3, rainfall activity was near normal or excess

over the country as a whole except south peninsula, where rainfall was 22% below LPA. The

south peninsula, where the main kharif crops include sugar cane, soyabean, cotton, pulses and

paddy, is still coming out of the last year's drought.

"The south peninsula did not receive good rainfall in the week from June 27 to July 3 because

the monsoon trough was to the north of its normal position giving good rainfall in central and

north India. Also, there has to be some system over Bay of Bengal off the coast of Odisha or

north Andhra Pradesh for getting good rainfall over south India, which was absent during this

period," said Medha Khole, IMD's deputy director general for weather forecasting.

Monsoon started casting dark shadow on northern West Bengal (ET 10/7/2013)

Northern West Bengal, despite les than long term average volume of rainfall, has gone under

large scale flooding and inundation. Large scale reduction in water retaining capacity of

rivers due to heavy siltation is the main cause- feel the experts.

Though statistically it is still deficient against long term average, the monsoon rainfall has

already put vast areas under inundation or flood in Sub Himalayan West Bengal, one of the

worst flood victim areas of the country putting agro based economy of the region under

threat. But beside area specific short term initiatives, there is no concrete long term

management plan to negotiate this.

Many of the important glacier fed rivers flowing down from Eastern Himalayan regions via

this region have already been put under red alert. Over 3 lakh people have become water

logged in inundated areas. To add to this worry, fresh and heavy downpour has been

predicted for next 48 hours by meteorological department.

As a whole, "Situation is serious," said Mr. G. De, Chairman North Bengal flood Control

Commission.

Interestingly, "Rainfall of this monsoon in Sub-Himalayan West Bengal and Sikkim is still

less than its normal figure. Against long term average of 616mm for the period of 1st June to

3rd July, it has been recorded as 575mm, 7% less than the average, during this period this

year. Even including heavy downpour of last couple of days, it is well within the normal

range," said Dr. G. N. Raha, Senior Meteorologist of Indian Meteorological Department.

"The most important cause of this flooding and inundation in this region is not heavy rainfall

but significantly hampered water retaining capacity of the rivers due to heavy siltation. At

many places, level of river beds is rising for as high as 25cm per year in these foothills

region. This is alarming," said veteran Geologist from North Bengal University Dr. S Sarkar.

"It needs a long term planning and judicious implementation of that," he added.

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While hosting large portion of West Bengal's 37,000 sq km flood prone area, north Bengal

contributes high in the national loss due to flood. West Bengal had estimated flood loss of

around Rs 15,000 Crore along with loss of more than 8,700 human lives and over 6 lakh

livestock during last 50 years.

As a matter of fact, none of the major water taming projects in West Bengal like Teesta

(Estimated project cost of around Rs 3000 crore), Kangsabati (Over Rs 300 crore),

Subarnarekha (Near Rs 4050 crore), Damodar irrigation project, or Ganga Action Plan could

minimize flood loss of the state so far.

GLobal cereal output to reach all time high in 2013: UNFAO (BL 11/10/2013)

World cereal production is set to increase by 7 per cent this year, to a record 2.479 million

tonnes, the United Nations Food and Agriculture Organisation (FAO) estimated Thursday,

predicting it would help stabilise prices in 2013-14.

Food markets are closely monitored by the Rome-based agency, as price spikes can aggravate

the global hunger crisis.

Some 868 million people in the world did not have enough to eat in the 2010-12 period, it

reported.

The FAO said that food insecurity was on the rise in conflict-stricken countries like Syria,

Egypt, Central African Republic, the Democratic Republic of Congo, Sudan, South Sudan

and Somalia, as well as in Madagascar, due to crop damage by locusts and a cyclone.

The situation was said to be critical, but improving, in most parts of the Sahel region, thanks

to a good cereal harvest last year, while in North Korea food insecurity is “chronic,” the FAO

indicated.

World cereal output to set new record this year: FAO (BS 12.7.13)

The FAO puts world wheat output in 2013 at 704 mt, an increase of 6.8%

World cereal production is set to hit a new high this year because of favourable climatic

conditions in major growing countries, including India.

Data compiled by the Food and Agricultural Organisation (FAO) of the United Nations

showed world cereal production would hit 2,479 million tonnes (mt) this year, an estimated

increase of 7.2 per cent.

The FAO puts world wheat output in 2013 at 704 mt, an increase of 6.8 per cent, which more

than recoups the previous year's reduction and represents the highest level in history.

By far, the bulk of the increase in wheat production this year is expected to originate in

Europe, as overall prospects remain favourable in the European Union and outputs in the

major producing Commonwealth of Independent States are forecast to rebound sharply from

drought-reduced levels in 2012. The outlook is also positive in Canada, Australia and

Argentina - other major exporters - and in most other key wheat producing and consuming

countries. The main exception is the US, where wheat crop growth has been hindered by

adverse weather conditions - drought in particular - this season.

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World rice production in 2013 is forecast to expand by 1.9 percent to 500 mt (milled

equivalent) with strong gains in all regions except Europe and North America. However,

prospects are still very provisional, as July and August are critical for the development of the

northern hemisphere main paddy crops.

World production of coarse grains in 2013 is forecast at about 1,275 mt, an increase of 9.7

percent from 2012. Latest estimates confirm increased harvests in Argentina and Brazil, the

two major producing countries in the southern hemisphere, while a smaller crop has been

harvested in South Africa.

Production growth this season could be dampened by expectations of falling prices and recent

policy changes that may encourage farmers to shift to other crops.

India tops list of Dubai's food import partners (ET 15/7/2013)

India has been ranked the first among Dubai's food import partners with a share of 14 per

cent, amounting to over Rs 95 billion, according to the customs here.

Dubai's food foreign trade increased over the past two years from Rs 782.7 billion in 2010 to

Rs 929.4 billion in 2011.

Brazil had an 11 percent share of Dubai's food imports, representing a value of Rs 71.4

billion (4.38 billion dirhams), while the United States had 9 percent at a value of Rs 63.5

billion (3.9 billion dirhams).

At the food re-export level, Oman's share was 11 percent at a value of 868 million dirhams

and Saudi Arabia with a share of 6 percent and a value of 498 million dirhams.

Foodstuff sector is one of the most essential commercial sectors which Dubai Customs

keenly targets to expedite its imports to satisfy consumption needs at reasonable prices.

The Dubai customs has announced that India has topped among Dubai's food import partners

with a share of 14 per cent, equivalent to Rs 95.2 billion (5.84 billion dirhams).

Rice topped the list of Dubai re-exports with a share of 12 percent representing (963 million

dirhams), followed by nuts with a share of 11 percent accounting for 867 million dirhams

then sugar with a share of 6 percent equivalent to 527 million.

At the exports level, sugar ranked the first with a share of 18 percent worth Rs 24.4 billion

followed by chocolate and cocoa products with a share of 15 percent and milk and

unsweetened cream with a share of 9 percent representing a value of 740 million dirhams.

Sugar topped Dubai's food imports in 2012 with a share of 10 percent equivalent to 4.3

billion dirhams, followed by rice with a share of 6 percent representing a value of 2.67 billion

dirhams then tea with a share of 5 percent equivalent to 2.02 billion dirhams.

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Kharif sowing completed in half the area; experts predict bumper harvest this year (BS

15.7.13)

Officials say 107 million hectares to be covered 15-20 days earlier than schedule

As sowing of kharif crops reaches its halfway mark, most analysts and experts have predicted

a bumper harvest this year, mainly of oilseeds and pulses, if the weather remains benign in

the next few weeks.

Officials said given the pace at which sowing operations were continuing across most parts of

the country, the entire 107 million hectares of usual kharif acreage would be covered by the

end of July, a good 15-20 days before time.

Normal acreage is the average of the past five years. Till July 12, sowing was completed on

51.76 million hectares.

Last week, Agriculture Minister Sharad Pawar expressed hope that given the quick pace of

sowing, kharif output in 2013 is expected to break all records. The highest foodgrain

production achieved so far has been in 2011-12, at 131.27 million tonnes.

The latest data from the department of agriculture shows that till last week, acreage under

paddy had reached 11 million hectares, almost 13 per cent more than that of the

corresponding period last year. Pulses have been planted on 2.59 million hectares, almost 99

per cent more than last year's acreage. Oilseeds have been sown on 13.59 million hectares,

around 101 per cent more than that of the year-ago period. Cotton has been sown on 9.24

million hectares, 41.74 per cent more than that of the corresponding period last year.

Timely and well-distributed monsoon season has been the main factor behind the sharp rise in

kharif sowing area.

According to the India Meteorological

Department, the southwest monsoon

rains has been almost 19 per cent more

than normal since it entered India on

June 1. Though the pace has slackened

a bit in the past few weeks - between

July 4 and July 10 - it has been five per

cent below normal. But most experts

said they were hopeful that it will

gather pace in the next few weeks,

including over northwest India where it

usually has been not regular.

Govt food security programme and private players can coexist: User-industry

(BS 13.7.13)

However, price may increase after ordinance is fully implemented

Fears have been expressed about private trade being crowded out due to the massive food

security obligations of the government but the industry itself does not think so.

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A cross-section of user-industry said India would have sufficient grain to meet the

requirements of both it and the government, which is expected to move its gigantic

machinery to meet obligations under the recently promulgated food security ordinance.

Industry, however, might face price pressures as the government would have to keep its

wheat and rice purchase price over the market rate to acquire the required quantities. There

are apprehensions of pilferage in the massive programme of the government.

Chairman of Cargill India Siraj Chaudhury told Business Standard: “Though I believe the

theory that private trade would be crowded out of the Indian foodgrain market because of the

food security ordinance is not entirely true, I also believe much of this would depend on the

price that the government would pay every year to purchase wheat and rice. But, yes, there is

a possibility that wheat prices would rise because of this.” Cargill is one of the biggest

private operators in the Indian foodgrain market.

Others too said they did not fear being crowded out due to the government's food security

programme.

“No, I don’t think big multinational companies would have any problem in purchasing wheat

and rice from India after the ordinance, as currently too, the government purchases the bulk

of these two commodities,” said a senior official from another leading multinational

agriculture trading company operating in India.

The government is confident its procurement of wheat and rice won’t rise so much as to

disturb market economics.

Food Minister K V Thomas recently said: “The ordinance would require 62 million tonnes of

grains a year and according to projections done by the agriculture ministry itself, production

and procurement is expected to be 253.2 million tonnes and 82.8 million tonnes respectively

by 2039-40. If private trade was not crowded out so far, I suppose it won’t do so now, when

we need to procure less amount of grains.”

The only negative fallout of the ordinance is it would encourage people to divert more

quantities of grain in the open market as the difference between the market price and public

distribution system price of a commodity like wheat would increase from Rs 10-11 a kg to Rs

15-16, said Veena Sharma, joint secretary of the Roller Flour Millers Federation of India

said.

Industries directly dependent on foodgrain for their raw materials - like biscuit and bread

makers - are not unduly worried over increased government procurement on account of the

Food Security law.

“At the moment, we do not see any squeeze in our raw material supplies as big flour mill

owners are well stocked,” said Mohan Das, secretary general of the Indian Biscuit

Manufactures Association. 60 percent of a one kilogram biscuit is wheat flour.

The President of the All India Bread manufactures Association, Ramesh Maggu said even if

there was any shortage of a key raw material like wheat, it could be supplemented by the

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government through schemes like Open Market Sale Scheme and others.

Rice millers too do not think more procurement by the government would jeopardise their

trade.

“We are very confident that grain surplus would continue for the next 10-15 years, but yes,

the provisions of the Food Ordinance should be periodically reviewed to ensure the quality of

grains being supplied and the delivery mechanism is constantly improved,” Vijay Sethia,

former president of All India Rice Exporters Association said.

Poor investment blamed for fall in agri growth rate (BL 17/7/2013)

A huge dip in agricultural growth rate last year raises serious concerns.

Agricultural economists and farm leaders have found fault with the policies of the

Government for the drop in growth rate of agriculture and allied sectors to 1.9 per cent in

2012-13 from 3.6 per cent the previous year.

They have called for immediate action to increase farm incomes.

According to the Central Statistics Office (CSO), the agri and allied sector growth rate fell by

half as the Gross Domestic Product grew by 5 per cent against 6.2 per cent in the previous

year.

“The Government's expenditure deflating policies and promotion of corporates by diverting

credit meant for farmers have led to this situation. It is allowing unbridled profiteering by

corporates by decontrolling seeds, pesticide and fertilisers. It is the deliberate policy of the

Union Government to dispossess the peasantry and handover agriculture to the corporates,”

Vijoo Krishnan, National Joint Secretary of All-India Kisan Sabha (AIKS), told Business

Line.

Vijoo Krishnan said that the growth in agriculture and allied sectors had fallen short of the

11th Plan target.

The average annual growth was put at 3.6 per cent against the target of 4 per cent in the Plan,

while the economy grew at 8 per cent.

Its performance in the previous Plan too was dismal.

While the overall economy grew at 7.77 per cent, agriculture and allied sectors grew only at

2.47 per cent.

The per capita availability of grain has been declining. Incomes of the peasantry are falling

and low yields, low productivity, soil degradation, lack of irrigation facilities, costly inputs,

unremunerative prices and lack of assured procurement have all affected farmers’ incomes.

The recent Public Private Partnership for Integrated Agriculture Development and changes to

Agricultural Produce Marketing Committee Act are all aimed at corporatising the farm

sector.

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The AIKS will discuss these issues at its 33rd conference scheduled to be held at Cuddalore

(Tamil Nadu) from July 24 to 27.

Agriculture economist (Prof) K.R. Chowdhary said that the main reason for the dwindling

growth rates in this sector was poor public investments.

“Ït is just 1.9 per cent (of GDP), while it needed much more,” he said.

“Problems the sector face are many. Cost of inputs doubled, even trebled in some cases, in

the last 10 years, whereas the real incomes of farmers have stagnated. Export-import policies

always go against farmers and favour traders,” he said.

Imported fruits posing challenges to domestic growers: Pawar (BS 18.7.13)

He emphasised the need to strengthen supply side infrastructure

Agriculture Minister Sharad Pawar today expressed concern that imported fruits like apples

and kiwis are posing a major challenge to domestic growers and emphasised the need to

strengthen supply side infrastructure to ensure locally produced fruits compete with imported

ones.

He said their is a need to implement the recommendations of the Saumita Chaudhuri report

on cold chain development for reducing post-harvest losses and improve farmers income.

"We need to attach importance to cold chain infrastructure and implement the

recommendations of the Saumitra Chaudhuri report so that we can effectively compete with

supply chain for imported apples, pears, grapes, kiwis and cherries which is posing a major

challenge to domestic growers," Pawar said addressing the National Horticulture Conference

here.

Although there is a pan India market for kiwis from Arunachal Pradesh, cherries from Jammu

and Kashmir, pears from Punjab and grapes from Maharashtra, government need to address

concerns of growers -- from planting material to post harvest management and issues of

logistics and price discovery.

Noting that the challenge before the government is to ensure adequate income to farmers,

Pawar said, "The only way we can have equitable and inclusive growth is when small farmers

can save enough to invest in newer production technologies. If we do not make farming

remunerative, we will not be able to retain the interest of younger generation."

The targeted 4% farm growth could be achieved in 12th Five Year Plan (2012-17) from high-

value agriculture, of which horticulture is an important segment, he noted.

Stating that India has a long way to go in establishing a robust cold chain system from farm

to fork, he asked his horticulture officials to look at some technologies relevant to India and

identify more 'origin-destination routes' for movement of horticulture produce.

Also, he asked if integrated projects could be taken up on cold chain in production clusters

with linkages to consumption centres and how the centre can work closely with state

governments and growers associations.

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With likely rise in demand for vegetables and fruits, Pawar said there is a need to further

enhance production these items as demand is expected grow with higher income, urbanisation

and changing food habits.

Currently, productivity of horticulture crops is lower in India as compared to other countries

and the yield gaps need to be address in the current plan period itself, he said.

He also asked state governments to take adequate measures to address the impact of climate

change on horticulture crops.

India is the second largest producer of vegetables and fruits in the world.

Skymet predicts below-normal rainfall in north after July 24 (ET 19.7.13)

Central India is expected to see good rains for the next two-and-a-half months.

Weather service provider Skymet says there could be below-normal spread of rainfall this

month-end across north India. However, central India is expected to see good rains for the

next two-and-a-half months.

A short break in rains during July is conducive for the kharif crop, particularly paddy, cotton

and oilseeds. "Northern states could expect a strong surge of rains from July 19-24 before it

slows down," said Jatin Singh, CEO, Skymet Weather Services. He added that the July

rainfall was in deficit for most northern states with the exception of Uttarakhand that had

received 16 per cent above-normal rains.

Meteorologists say a break in rains is required to ensure progress in sowing and crop growth.

Inundated fields lead to logging with the risk of a higher infestation in plants. "Current rains

this year have been very beneficial for the standing crops. Except for the northeastern states,

all other parts of the country have received normal rains," said DS Pai, director (long-range

forecast), India Meteorological Department (IMD).

Surplus rains in Punjab, Chandigarh; deficient in Haryana (ET 22/7/2017)

Punjab and Chandigarh have received surplus rains during the current monsoon season so far,

but showers in neighbouring Haryana were slightly deficient, a MeT official said today.

Between June 1-July 17, Chandigarh, the common capital of the two states had received

355.8 mm of rains as against a normal of 281.1 mm, with 27 per cent being surplus, the

official told PTI here today.

He said between the same period Punjab had received 175.6 mm of rain, which is 23 per cent

more as the normal for the state during the period is 142.6 mm, he said.

However, rainfall has been scanty in Haryana, which received a total 104.4 mm of rains

during the same period as against a normal of 131.8 mm, indicating a deficiency of 21 per

cent, he said.

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Despite overall deficiency, the MeT official pointed out that some pockets in Haryana had

received very good rains that included Yamunanagar district, which had received 434.1 mm

of rains, 64 per cent more than what is considered normal for the district during the June 1-

July 17 period.

River Yamuna had also been in spate in the district after heavy monsoon rains last month.

However, areas like Mewat had received very poor rains, with just 19.8 mm against a normal

of 128 mm, indicating a deficiency of 85 per cent.

In Punjab, Kapurthala district had received the highest rainfall at 301.7 mm while Ferozepur

had got just 64.5 mm during the period, a shortfall of 33 per cent.

The south-west monsoon had hit Punjab, Haryana and Chandigarh on June 16 this year as

against its normal arrival date between June 29-July 5. Last year, the monsoon had arrived in

the region on July 7.

Meanwhile, after withdrawal of the monsoon from Punjab and Haryana towards September

end last year, the overall rainfall deficiency in the two states had stood at 46 and 39 per cent,

respectively, while Union Territory Chandigarh had received normal rains between the June-

September periods.

Grain output falls by just 1.5% in 2012-13 despite dry spell (FE 23.7.13)

The government on Monday kept the latest estimate of the country's total grain output

unchanged at the level forecast in May despite tweaking the production figures for all the

four major grains, suggesting an interesting coincidence.

According to the fourth advance estimate by the agriculture ministry, the country's grain

production dropped by just 1.5% to 255.36 million tonnes in the crop year through June

despite dry spells in some states during the initial phase of summer sowing, thanks to a record

harvest of pulses and good production of rice and wheat.

The good output level will keep key grain supplies steady and provide the much-needed relief

to the government as it gears up to implement a food security law through an ordinance.

However, storage problems may emerge, especially after the summer crops are harvested

from mid-September, although food ministry officials said the issue cane be taken care of in a

better way. The government had projected grain output at 250.14 million tonnes in the second

advance estimate released in February.

India, the world's second-largest grains grower, had initially set a production target of 245

million tonne for 2012-13 and dry spells until July in many parts of Maharashtra, Karnataka,

Gujarat and Rajasthan threatened to drag down farm production. However, as seasonal

showers picked up since August, fears of a farm crisis after a record harvest in 2011-12

receded substantially and the target was subsequently revised up to 254.24 million tonnes.

Rice production has hit a record 104.40 million tonnes in 2012-13, compared with 104.22

million tonnes announced earlier, although the production of the key grain had hit a record

105.31 million tonnes last year. Wheat output estimate has been trimmed to 92.46 million

tonnes for 2012-13 from 93.62 million tonnes reported earlier and compared to 94.88 million

tonnes a year before. The output of pulses has hit a record 18.45 million tonnes, compared

with 18 million tonnes estimated in May. Similarly, coarse cereal production estimate has

105

been revised up at 40.06 million tonnes from 39.52 million tonnes pegged in the third

advanced estimate.

Oilseed output has touched 31.01 million tonnes, compared to 30.70 million tonnes in May.

India meets more than half of its edible oil requirements and one-fifth of pulses needs

through imports, and any drop in output intensifiies risks of imported inflation. Cotton

production estimate has been revised up at 34 million bales for 2012-13 from 33.80 million

bales. One bale equals 170 kg. Sugarcane production hit 338.96 million tonnes in 2012-13,

compared with 336.1 million tonnes projected earlier.

Maharashtra completes kharif sowing on 84 per cent of targeted area (ET 23/7/2013)

Kharif sowing in Maharashtra has been completed on 84% of the targeted area. Area under

soyabean, pulses and cereals is set to increase while area under cotton is expected to decline.

The state has received 148.8 % of the average rainfall till July 22. Of the 355 taluks in the

state, 317 have received more than 100% rainfall. Kharif cereals sowing has been completed

on 29.68 lakh hectare area as on July 22, as compared to 23.11 lakh hectare on the same day

last year. Pulses sowing has been completed on 18.08 lakh hectare, which is more by one

lakh hectare over the previous year. Area under moong andurad has increase slightly.

Oilseeds have gained acreage this year mainly due to diversion of area from cotton to

soyabean. Oilseeds have been sown on 39.55 lakh hectare as against 31.12 lakh hectare

during comparable period of last year. Area under cotton is less than last year. The fibre crop

has been sown over 37.37 lakh hectare as against 38.76 lakh hectare last year. Continuous

rainfall has affected crop growth in the Amaravati division.

The area under sugar cane is also set to fall considerably mainly due to drought-like

conditions of last year.

Monsoon surplus of June being carried into July (BL 24/7/2013)

The heavy monsoon over Central and West India and adjoining North-West India is set to

continue with a fresh rain-generating system forecast to form in the Bay of Bengal.

The surplus run of monsoon in June will now have extended into July, usually rainiest of the

four monsoon months (34 per cent of the total).

RAINIEST JUNE

June contributes only 14 per cent of the total but this year saw the heaviest downpours since

2001, with rainfall registering 32 per cent above average. July had failed farmers often during

the past few years, putting the crops under heavy stress. But entering the last lap, it has

mostly been above normal until now, having dipped below only a couple of times.

The monsoon is forecast to take off later into August, which is the second rainiest of the

season, accounting for 31 per cent.

STRONG MONSOON

Thus, the 2013 monsoon is promising to be the strongest on show in recent times. Sustaining

is run was a low-pressure area originating in the Bay of Bengal.

It had crossed the coast and was sitting pretty over Odisha and adjoining Chhattisgarh on

Wednesday.

106

This system pulled in monsoon flows from both the Arabian Sea and West Bengal, bringing

heavy precipitation across Central and West India.

Latest news on this front is a follow-up system brewing the Bay will scale up the monsoon

yet again.

US National Centres for Environmental Prediction said that it saw a track of heavy monsoon

torrents moving west from East-central India to West India.

RAIN ALERT

Heavy rains are likely over Jharkhand, Chhattisgarh, Madhya Pradesh, Mumbai-Konkan and

Gujarat, apart from the West Coast.

An India Met Department update said that the 24 hours ending on Wednesday morning saw

rain or thundershowers at most place along the West Coast.

Rain lashed Madhya Pradesh, East Gujarat, interior Maharashtra and Lakshadweep.

Chief amounts of rainfall (in cm) recorded were Mumbai (Santa Cruz), Mumbai (Colaba),

and Bhira: 22 cm each; Mahabaleshwar: 13; Alibagh:14; Ratnagiri: 11; and Dahanu: 19.

On Thursday, it forecast heavy to very heavy rainfall one or two places over East Gujarat,

Saurashtra, Kutch, Konkan and Goa.

EXTENDED FORECAST

Heavy rainfall would occur at one or two places over coastal Karnataka and Kerala.

On Friday, heavy rains have been forecast at one or two places over Gangetic West Bengal,

Odisha, East Gujarat, Konkan, Goa, Coastal Andhra Pradesh, Telangana, Coastal Karnataka

and Kerala.

An extended outlook for four days until July 31 said that rains may lash many places over

Gangetic plains, Gujarat, sub-Himalayan West Bengal, Sikkim, Jharkhand and the north

eastern States.

Rainfall would occur at many places along the West Coast and also at a few places over

Central India.

Sugarcane, Cotton, Wheat gave maximum returns to farmers (BS 25.7.13)

The analysis was limited only to crops for which government determines Minimum Support

Price

Ever wondered which crop has given maximum return to farmers in the last few years, or

cultivation in which state is most profitable for the growers, a recent study perhaps has the

answers to these

According to a analysis done by the Commission for Agriculture Costs and Prices (CACP),

among all the crops, in absolute terms sugarcane has given the highest average gross return

per hectare to farmers between 2008-09 to 2010-11, followed by cotton and thereafter wheat.

The analysis was limited only to crops for which the government determines the Minimum

107

Support Price (MSP) and excludes high-value crops like fruits, vegetables, poultry etc. It has

been done by Ashok Vishandass and B Lukka from the CACP.

108

109

AGRICULTURAL COMMODITY PRICES

June retail inflation at 9.87% on pricey veggies (FE 14.7.13)

Retail inflation inched up to 9.87 per cent in June, from 9.31 per cent in the previous month,

on costlier vegetables and food items.

The spike in consumer price index-based inflation came after three consecutive months of

decline in the price rise. The food inflation in June also rose to 11.84 per cent from 10.65 per

cent in the previous month, according to the official data released on Friday.

The steepest rise was witnessed in vegetables prices which jumped 14.55 per cent in month

over the year-ago period. Prices of fruits too witnessed a significant rise.

Protein rich items like egg, fish and meat too were dearer in June though rates of pulses and

related products eased somewhat. However, the rate of price rise in cereals was higher at

17.59 per cent.

Inflation rises to 4.86% in June, onion prices shoot up by 114% (FE 16.7.13)

Inflation rose to 4.86 per cent in June, driven mainly by rising prices of food articles,

especially vegetables including onion. Inflation based on the Wholesale Price Index (WPI)

had stood at 4.70 per cent in May. In June, 2012, it was 7.58 per cent.

As per official data released today, WPI inflation in the food articles category rose to 9.74 per

cent, driven mainly by price rise in onion, cereals and rice.

The rate of price rise in food articles, which has a 14.34 per cent share in the WPI basket, was

8.25 per cent in May. Inflation in onion shot up by 114 per cent in June, from 97.40 per cent

in the previous month. Vegetables prices too went up by 16.47 per cent during the month,

from 4.85 per cent in May. It was (-)9.05 per cent in April.

Inflation in the manufactured items category, however, declined to 2.75 per cent in June from

3.11 per cent in May. The non-food articles category, which include fibre, oil seeds and

minerals, saw a sharp rise in inflation to 7.57 per cent, from 4.88 per cent in May. Inflation

for April was revised downwards to 4.77 per cent from 4.89 per cent as per provisional

estimates.

The inflation data would be closely watched by the Reserve Bank while formulating its first-

quarter policy scheduled for July 30.

There have been demands for lowering interest rate in the backdrop of declining inflation.

While the Reserve Bank has lowered interest rates by 1.30 percent since January 2012, the

banks have cut lending rates by only 0.30 per cent.

Inflation snaps 4-month declining trend, up at 4.86% in June (FE 16.7.13)

Snapping declining trend of four months, inflation rose to 4.86 per cent in June as kitchen

items like onion, rice and other cereals became costlier, adding to the woes of the government

struggling to arrest the falling value of rupee that is putting pressure on prices. Rising

inflation will also have a bearing on the Reserve Bank's first quarter monetary policy review

110

on July 30. Inflation based on the Wholesale Price Index (WPI) had stood at 4.70 per cent in

May.

Food inflation rose to 9.74 per cent, driven by price rise in onion, cereals and rice in June,

against 8.25 per cent in the previous month, as per the Industry Ministry data. Vegetable

prices went up by 16.47 per cent from 4.85 per cent in May. Inflation in onion shot up by 114

per cent in June as against 97.40 per cent in May. Inflation in the manufactured items

category, however, declined to 2.75 per cent in June from 3.11 per cent in May. Chairman of

Prime Minister's Economic Advisory Council C Rangarajan expressed apprehension that

rupee depreciation could have bearing the price situation."Even though inflation has risen a

little bit, WPI seems to be establishing...(but) going ahead there will be impact of rupee

depreciation (on prices)," he said.

On the possibility of interest rate cut by RBI in its forthcoming policy, Rangarajan said: "RBI

faces the difficult choice of controlling inflation, growth needs stimulus, but external

situation remains a concern. RBI will take all these three factors into account. “ The value of

the rupee, which touched all time low of 61.21 to a dollar earlier this month, is fueling

inflation, especially in the prices of petroleum products. Government as well as the RBI have

been taking steps to strengthen rupee. The Consumer Price Index (CPI) based retail inflation

for June too had also inched up marginally.

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AGRICULTURAL COMMODITY FUTURES

Potato up 0.7% on firm spot demand (BS 26.6.13)

The potato for delivery in August edged up by 0.15%

Potato prices traded higher by Rs 6.20 to Rs 859 per quintal in futures trade today as

speculators created fresh positions, driven by pick up in spot demand against restricted

arrivals from producing region.

At the Multi Commodity Exchange, potato for delivery in July traded higher by Rs 6.20, or

0.73%, to Rs 859 per quintal in business turnover of six lots.

Likewise, the potato for delivery in August edged up by Rs 1.20, or 0.15%, to Rs 808 per

quintal in four lots.

Analysts said speculators created fresh positions, driven by pick up in demand in the spot

market against limited arrivals from producing region mainly led to the rise in potato prices at

futures trade.

Crude palm oil down 0.5% on sluggish demand (BS 26.6.13)

Crude palm oil prices moved down by 0.58% to Rs 500.40 per 10 kg in futures trade today

owing to sluggish demand in the spot market against adequate stocks position.

At the Multi Commodity Exchange, crude palm oil for delivery in July moved down by Rs

2.90, or 0.58%, to Rs 500.40 per 10 kg in business turnover of 449 lots.

Similarly, palm oil for delivery in June shed Rs 2.80, or 0.56% to Rs 500 per 10 kg in 97 lots.

Market analysts attributed the fall in crude palm oil futures to sluggish demand in the spot

market against adequate stocks position.

Sugar down 0.5% on weak demand, ample supply (BS 28.6.13)

Sugar for delivery in the August contract declined by 0.49%

Sugar prices fell by 0.56% to Rs 3,003 per quintal in futures trade today as speculators

reduced their holdings largely due to weak demand from bulk consumers in the spot market

against ample supplies.

At the National Commodity and Derivatives Exchange, sugar for delivery in July month fell

by Rs 17, or 0.56% to Rs 3,003 per quintal with an open interest of 20,910 lots.

Similarly, sugar for delivery in the August contract declined by Rs 15, or 0.49% to Rs 3,058

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per quintal in 24,000 lots.

Market analysts said speculators reduced their holdings on the back of weak demand from

bulk consumers in the spot market mainly influenced sugar prices at futures trade.

Chana remain weak by 1.1% on supply pressure (BS 28.6.13)

Chana for delivery in August contract lost 0.31%

Continued its losing streak, chana prices fell further by Rs 34 to Rs 3,063 per quintal in

futures trading today as speculators engaged in trimming positions, driven by higher supplies

from producing regions.

Besides, subdued demand in the spot market also put pressure.

At the National Commodity and Derivative Exchange, chana for delivery in July month fell

further by Rs 34, or 1.10% to Rs 3,063 per quintal with an open interest of 1,17,940 lots.

Similarly, chana for delivery in August contract lost Rs 31, or 0.31% to Rs 3,138 per quintal

in 1,17,650 lots.

Market analysts said speculators trimmed their positions. driven by higher supplies from

producing regions amid reports of good progress in the summer sowing of pulses on ample

monsoon rains, kept pressure on chana prices at futures trade.

Potato up by 1% on strong demand (BS 28.6.13)

The potato for delivery in July contracts gained 0.12%

Potato extended gains for the third straight day with prices rising further by Rs 8.10 to Rs

794.70 per quintal in futures market today supported by strong demand in the spot market

against limited arrivals from producing regions.

At the Multi Commodity Exchange, potato for delivery in August month added Rs 8.10, or

1.03% to Rs 794.70 per quintal in business turnover of 23 lots.

The potato for delivery in July contracts gained Re 1, or 0.12% to Rs 841 per quintal in 3 lots.

Analysts said besides strong demand in the spot market, restricted arrivals from producing

regions due to rainy season mainly kept potato prices higher at futures trade.

Edible oils flat on thin trade, bearish futures (BL 01/7/2013)

Edible oils prices in most wholesale markets were flat to down on Monday amid thin trade

and bearish futures. Overall sentiment remained negative.

Domestic soya oil futures dropped in late trade tracking lower closing of Malaysian palm oil

futures.

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Early monsoon bolstered kharif oilseeds sowing and that weighed on indigenous edible oils.

The volume was thin as stockists preferred to fulfil old commitments, said traders.

Sources said during the day hardly 100-150 tonnes of palmolein were resold at Rs 527-528.

Except that there were no other activities.

Mustard seeds arrivals were 1.30-1.35 lakh bags including 75,000-80,000 bags in Rajasthan

and the prices were Rs 3,060-3,525.

Potato up 1.2% on pick-up in spot demand; tight supply (BS 2.7.13)

Potato prices for July contract also increased by 0.77%

Potato prices rose by Rs 9.40 to Rs 772.80 per quintal in futures trade today as speculators

enlarged their positions on pick-up in spot demand amid tight supply.

At the Multi Commodity Exchange, potato for August contract rose by Rs 9.40, or 1.23%, to

Rs 772.80 per quintal with trading volume of 55 lots.

Potato prices for July contract also increased by Rs 6.30, or 0.77%, to Rs 823 per quintal with

a business volume of 142 lots.

Marketmen said increased buying by traders and speculators on pick-up in demand in the spot

market, mainly led to the rise in potato prices at futures trade.

They said restricted arrivals from producing belts in UP, Punjab, MP and West Bengal also

influenced the trading sentiment to some extent.

Chana futures down 1.2% on better rains (BS 2.7.13)

Chana for delivery in the July shed 1.29%

Chana prices declined by Rs 41 to Rs 3,132 per quintal in futures trade today on speculators

selling on expectations that improvement in the monsoon rains could aid sowing of crop.

At the National Commodity and Derivatives Exchange, chana for delivery in August declined

by Rs 41, or 1.29%, to Rs 3,132 per quintal, with an open interest of 1,52,040 lots.

Similarly, chana for delivery in the July shed Rs 40, or 1.29%, to Rs 3,062 per quintal with

open interest of 81,680 lots.

Marketmen said hopes of higher sowing this season on better monsoon rains besides an

adequate stocks position in the spot markets, mainly put pressure on Chana prices.

Edible oils flare up on hopes of higher demand (BL 5/7/2013)

Edible oils made further gains on Thursday tracking firm futures market and also on

expectation of higher physical demand ahead of festivals. Groundnut oil extended gain for the

second consecutive day by Rs 30 for 10 kg following a rally in Saurashtra where it rose by Rs

70 in the last two days. Rapeseed, cotton and palmolein increased by Rs 2-3 for 10 kg.

Soyabean and sunflower oil ruled steady.

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In the local market, about 80-100 tonnes of palmolein were traded in resale at Rs 528-530.

Liberty sold 500-600 tonnes of palmolein at Rs 536 for July and 80-100 tonnes of super

palmolein at Rs 573-575. Ruchi sold 450-500 tonnes of soyabean refined oil at Rs 660 for

July.

Towards the day’s close, Liberty was quoting palmolein at Rs 536, super palmolein Rs 575

and super deluxe Rs 600. Ruchi quoted palmolein at Rs 540 for July 14 and Rs 545 for July

15-31, super palmolein at Rs 575, soyabean refined oil Rs 661 for July, Rs 663 for August

and sunflower refined oil Rs 810 for July. Allana’s rate for palmolein was Rs 538 and for

super palmolein Rs 575. Gokul was quoting palmolein at Rs 535 for July 15 and Rs 540 for

July 16-31.

In Rajkot, groundnut oil rose for the second consecutive day by Rs 40 to Rs 1,480 for telia tin

and by Rs 25 to Rs 950 for loose (10 kg).

Sugar hits 1-week low on weak demand, output forecast (ET 10/7/2013)

Sugar futures fell on Wednesday to their lowest level in a week on sluggish demand from

bulk consumers and higher-than-expected production estimate for the next marketing year

starting Oct. 1.

The key August contract on the National Commodity and Derivatives Exchange was down

0.43 per cent at 3,038 rupees ($50.36) per 100 kg at 0840 GMT, after falling to 3,035 rupees

earlier in the day, the lowest level since July 4.

India's sugar output in the 2013/14 marketing year beginning October is likely to drop by 5.2

per cent from a year earlier to 23.7 million tonnes, Indian Sugar Mills Association (ISMA)

said on Tuesday.

"The ISMA numbers are actually bearish. The expected drop in next year's production is

minimal. Supply situation is very comfortable," said Prasoon Mathur, a senior analyst

withReligare Commodities.

Indian farmers have grown sugarcane on 4.84 million hectares as of July 4, compared with 5

million hectares a year earlier, farm ministry data showed.

All cane growing sates received more rainfall than normal since the beginning of the

monsoon season on June 1, weather department data showed.

Spot sugar fell 4 rupees to 3,060 rupees per 100 kg at the Kolhapur market in Maharashtra

state.

"In physical market bulk consumers are not active. It is lean demand season. Export demand

is also muted," Mathur said.

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Ice cream and beverage makers typically trim sugar purchases during the monsoon, when

lower temperature cuts demand for their products.

India issued a notification on Tuesday to implement a hike in import duty on sugar to 15 per

cent from 10 per cent as the world's top sugar consumer tries to prop up local prices, which

are falling due to ample and cheap global supplies.

A lack of Pakistani sugar available for export and strong demand before Ramadan have

created opportunities for Indian sales to nearby markets, but the window for foreign sales

risks closing soon.

Barley falls 1.99% on mounting stocks (BS 11.7.13)

Barley prices fell mainly attributes to weak physical markets due to ample supply from mills

against reduced off take by beer and cattle feed making industries

Barley prices dropped by Rs 27.50 to Rs 1,353.50 per quintal in futures trade today as traders

preferred to reduce holdings on the back of rising stocks position in spot markets.

Market analysts said the fall in Barley futures prices mainly attributes to weak physical

markets due to ample supply from mills against reduced off take by beer and cattle feed

making industries.

At the National Commodity and Derivatives Exchange, barley prices for November slipped

by Rs 27.50 or 1.99% to Rs 1,353.50 per quintal, with an open interest of 250 lots.

Chana up by 1.07% on better spot demand (BS 15.7.13)

Analysts said increased buying by speculators on good demand in the spot market mainly led

to a rise in chana prices

Chana prices rose by Rs 32 to Rs 3,021 per quintal in futures trade today as speculators

enlarged their positions on rising spot market demand.

At the National Commodity Derivatives Exchange, chana for August contract rose by Rs 32,

or 1.07%, to Rs 3,021 per quintal, with an open interest of 2,17,950 lots.

Similarly, the commodity for delivery in July gained Rs 30, or 1.02%, to Rs 2,975 per

quintal, with an open interest of 1,910 lots.

Analysts said increased buying by speculators on good demand in the spot market mainly led

to a rise in chana futures prices.

Barley gains by 2% on fresh buying (BS 15.7.13)

Marketmen said restricted supply and pick up in demand in physical markets mainly pushed

up prices

Barley prices surged by Rs 25 to Rs 1,275 per quintal in future trading today in tandum with

firm spot markets sentiment.

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Marketmen said restricted supply and pick up in demand in physical markets mainly pushed

up prices here in future trade.

Low levels buying also helped to enthused the treading sentiments to some extent, they

added.

Barley prices for current July contract hardened by Rs 25, or 2.00% to Rs 1,275 per quintal,

having an open interest of 1,230 lots.

Most active near August month contract also advanced by Rs 19, or 1.48% to Rs 1,306 per

quintal with an open interest of 31,220 lots.

Potato down 3% on higher supply (BS 15.7.13)

Potato for delivery in August slipped by 2.82%

Potato prices fell by 3% to Rs 666.50 per quintal in futures trade today as speculators

offloaded their positions triggered by higher supplies from producing regions.

At the Multi Commodity Exchange, potato for September delivery fell by Rs 20.60, or 3%, to

Rs 666.50 per quintal, with a business volume of 115 lots.

Potato for delivery in August slipped by Rs 20.60, or 2.82%, to Rs 709 per quintal, with a

trading volume of 112 lots.

Marketmen said fall in potato prices was mostly due to offloading of positions by speculators

amid higher supplies from producing regions.

Maize down 1.2% on weak spot sentiment (BS 16.7.13)

Current month July's contract prices fell by 1.15%

Maize prices fell by Rs 17 to Rs 1,398 per quintal in future trade today as speculators

offloaded their positions on weak spot markets cues.

Marketmen said weak demand from bio-products making industries against increased stocks

in physical markets mainly put pressure here on future price of maize.

Fresh supply of new crops into the markets too weighed on prices, they said.

At the National Commodity and Derivatives Exchange, maize price for most active near

August contract declined by Rs 17, or 1.20%, to Rs 1,398 per quintal, having an open interest

of 67,730 lots.

Current month July's contract prices fell by Rs 16, or 1.15% to Rs 1,373 per quintal, with an

open interest of 1,800 lots.

Edible oils slip on sluggish offtake (BL 17/7/2013)

Imported edible oils along with cotton oil extended losses on Wednesday due to slack

demand. Palmolein and soyabean refined oil declined by Re 1 and Rs 5 for 10 kg each.

Cotton refined oil dropped by Rs 2.

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Despite bearish reports from Saurashtra, groundnut oil along with rapeseed and sunflower oil

ruled unchanged. Negligible volume in spot kept the sentiment weak, said sources.

Sugar drops on weak world market, ample supplies (ET 17/7/2013)

Sugar futures eased on Wednesday, following a drop in overseas prices and on ample

supplies in the local market, though a slight improvement in retail demand and export orders

limited the downside.

The key August contract on the NationalCommodity and Derivatives Exchange was down

0.39 percent at 3,041 rupees ($51.36) per 100 kg at 0837 GMT.

New York raw sugar futures on Tuesday slipped to a three-year low on origin selling of a

bumper crop in Brazil.

"The continuous fall in overseas prices is a concern for Indian sugar mills. It can resume

imports and make local sugar uncompetitive in the world market," said a Mumbai-based

dealer.

Spot sugar edged up 4 rupees to 3,068 rupees per 100 kg at the Kolhapur market in

Maharashtra state.

India issued a notification last week to implement a hike in import duty on sugar to 15

percent from 10 percent as the world's top sugar consumer tries to prop up local prices, which

are falling due to ample and cheap global supplies.

Sugar output in the 2013/14 marketing year beginning October is likely to drop 5.2 percent

from a year earlier to 23.7 million tonnes, compared with a local demand of around 23

million tonnes.

A lack of Pakistani sugar available for exports and strong demand before Ramadan have

created opportunities for Indian sales to nearby markets, but the window for foreign sales

risks closing soon.

Potato up by 1.9% on rising demand (BS 25.7.13)

Tight stocks availability in the physical market following less arrivals from producing

regions influenced potato prices

Potato prices maintained an upward march for the fourth straight day by adding 1.93% to Rs

669.90 per quintal in futures trading today on rising demand in the spot market.

Tight stocks availability in the physical market following less arrivals from producing regions

due to heavy rains also led to an upsurge in potato.

At the Multi Commodity Exchange, potato for delivery in September rose by Rs 12.70, or

1.93%, to Rs 669.90 per quintal in business turnover of 174 lots.

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Likewise, the potato for delivery in August traded higher by Rs 10.20, or 1.44%, to Rs 706.80

per quintal in 89 lots.

Analysts said besides rising demand in the spot market, tight supplies due to less arrivals

from producing regions due to heavy rains mainly kept potato firm for the fourth day in

futures trade.

Crude palm oil declines by 1% on global cues (BS 25.7.13)

Speculators reduced exposures tracking a weak global trend

Crude palm oil prices fell by 1% to Rs 487 per 10 kg in futures trading today as speculators

reduced exposures, tracking a weak global trend.

At the Multi Commodity Exchange, crude palm oil prices for delivery in August declined by

Rs 4.90, or 1%, to Rs 487 per 10 kg in business turnover of 212 lots.

Similarly, the oil for delivery in July traded lower by Rs 1.20, or 0.24%, to Rs 495.50 per 10

kg in 55 lots.

Market analysts said the fall in crude palm oil prices at futures trade to a weak trend overseas

as supplies climbed the most since 1999 and demand expanded at the slowest pace in more

than a decade.

Meanwhile, palm oil dropped 0.9% to $688 a tonne, the lowest since November 2009 on the

Malaysia Derivatives.