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Agrinews: March 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
ii
iii
CONTENTS
SECTION TITLE PAGE
I HIGHLIGHTS 1
II BROAD SECTORAL TRENDS 3
III AGRICULTURAL POLICY 4
IV RICE 7
V WHEAT 14
VI MAIZE/COARSE GRAINS 27
VII PULSES 29
VIII EDIBLE OILS AND OILSEEDS 32
IX MILK 48
X VEGETABLES/ ONION-POTATO 51
XI SUGARCANE/SUGAR 55
XII INPUTS 69
XIII OTHER AGRI COMMODITY/NEWS 74
XIV AGRICULTURAL COMMODITY/ FOOD PRICES 91
Note: Newspapers covered: BL= Business Line, BS = Business Standard, ET=
Economic Times, FE-Financial Express
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1
I HIGHLIGHTS
Broad Sectoral Trends
Agriculture share in GDP may fall to 13.7 pc (ET 15/3/2013)
Agricultural Policy
Sugar decontrol in phases a must: Economic Survey 2013 (ET 27/2/2013)
Sharad Pawar favours field trials of GM crops with strict safety ( ET 11/3/2013)
RICE
Rice market to see good levels in coming days (BL 3/3/2013)
Rice exports set to cross 10 mt this fiscal (BL 10/3/2013)
Rice seen steady on domestic, overseas demand (BL 18/3/2013)
Wheat
Moderate buying holds wheat afloat (BL 1/3/2013)
India exports over 4 mn tonnes of wheat so far in FY'13 (ET 4/3/2013)
Low stocks, fresh demand lift wheat (BL 5/3/201)
Wheat rules flat as market awaits new crop (BL 19/3/2013)
Maize/ Course Grains
Maize exports may dip by one-third this year (BL 25/3/2013)
Pulses
Pulses prices remain steady in thin trade (BL 9/3/2013)
Improved demand from mills puts pulses on the boil (BL 13/3/2013)
Government extends Mar 31, 2014 ban on export of pulses (ET 25/3/2013)
Edible Oils & Oilseeds
Cooking oil imports may touch record as demand surges, says Adani Wilmar (ET,
28/2/2013)
Soyoil rises on weak rupee; rapeseed at 1-year low (ET 4/3/2013)
Mustard prices slump, farmers a worried lot (BL 13/3/2013)
India's 2012/13 oilseeds output up on rapeseed surge: Trade body (ET 18/3/2013)
Edible oil gains on improved buying (BL 21/3/2013)
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Milk
Dairy firms upbeat on milk powder exports (BS 20.3.13)
Vegetables/ Onion-Potato
Potato production likely to increase 7%(ET 10/3/2013)
Bengal potato prices gain as cold storages open doors (BL 17/3/2013)
Onion production estimated to fall 4% in 2012-13 (BL 19/3/2013)
Onion may drop further (BL 22/3/2013)
Sugarcane/ Sugar
Sugar output falls marginally to 18.8 mn tonnes so far: ISMA (ET 4/3/2013)
Sugar rules flat on ample supply, slack demand (BL 18/3/2013)
Poor retail offtake continues to dog sugar (BL 21/3/2013)
Sugar mills under pressure to sell (BL 22/3/2013)
Inputs
Subsidy overdues may prompt urea price hike (1/3/2013)
As global prices fall, Govt may cut subsidy on non-urea fertilizers (BL 24/3/2013)
OTHER AGRI COMMODITIES/ NEWS
Farm sector gets a booster dose with 22% higher allocation (BL 28/2/2013)
India's March 1 grains stocks substantially higher than targets: Govt ( ET 12/3/2013)
Foodgrain output may dip 3.5% to 250 MT in FY13 (BL 17/3/2013)
AGRICULTURAL COMMODITY PRICES
Food inflation set to ease as pulses turn cheaper by 20% (ET 5/3/2013)
Granaries full, but cereal prices up 20% (ET 16/3/2016)
Govt jittery over rising food prices ahead of state polls (ET 18/3/2013)
Food inflation negative for India's credit ratings: Moody's (FE 18/3/2013)
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II BROAD SECTORAL TRENDS
Agriculture share in GDP may fall to 13.7 pc (ET 15/3/2013)
The share of agriculture and allied sectors in India's GDP is likely to decline to 13.7 per cent
in 2012-13 on account of higher growth in the non-farm sectors, Parliament was informed
today.
In a written reply to Rajya Sabha, Minister of State for Agriculture Tariq Anwar said the
contribution of agriculture and allied sector to the Gross Domestic Product (GDP) of the
country declined from 14.6 per cent in 2009-10 to 14.5 per cent in 2010-11 and further to
14.1 per cent in 2011-12.
"Further, as per the Advance Estimates released byCSO on February 7, 2013, contribution of
agriculture to the GDP is likely decline to 13.7 per cent in 2012-13," he added.
He attributed the fall in agriculture's share in the country's GDP to "comparatively higher
growth in GDP of non-agriculture sectors".
In reply to a separate query, Anwar said the foodgrains production in 2012-13 crop year is
estimated to fall at 250.14 million tonnes, from record 259.32 million tonnes in the previous
year.
"Total production of foodgrains during the current year has been lower due to decline in
Kharif production on account of delayed/deficient rainfall during monsoon season," the
minister said.
To another query, Anwar said rice production has gone up by nearly 10 million tonnes over
the last three years in seven states covered under the central scheme 'Bringing Green
Revolution to Eastern India (BGREI)'.
The cumulative rice production in seven states ( Assam, Bihar, Chhattisgarh, Jharkand,
Odisha, Uttar Pradesh and West Bengal) is estimated to increase to 55.62 million tonnes in
2012-13 from 45.64 million tonnes in 2009-10.
"Keeping in view the enthusiastic results of the implementation of BGREI programme, an
allocation of Rs 1,000 crore has been announced for the programme in the Budget speech for
the year 2013-14," Anwar said.
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III AGRICULTURAL POLICY ISSUES
Sugar decontrol in phases a must: Economic Survey 2013 (ET 27/2/2013)
The Economic Survey 2013 today suggested removal of controls on the "over-regulated"
sugar sector in a phased manner as recommended by the Rangarajan committee.
Although the country is world's largest consumer and second biggest producer of sugar, the
sector "suffers from policy inconsistency and unpredictability," it said.
Pitching for decontrol, the Survey said: "The sugar industry in India is over-regulated and
prone to cyclicality due to price interventions... the government should come into the picture
only in situations where absolutely necessary."
Export bans and controls could be replaced with small variable external tariffs to stabilise
prices.
Stating that the issue of sugar decontrol has been widely debated for a long time, the Survey
said: "From a purely economic point of view, greater play of market forces would provide
better prices and serve the interests of all stakeholders."
Listing out the major recommendations made by the Rangarajan committee on sugar
decontrol, the Survey said: "A stable, predictable, and consistent policy reforms have to be
brought about in a fiscally neutral manner and issues considered for implementation in a
phased manner."
The key recommendations of the Rangarajan committee report included phasing out cane
reservation area, dispensing with minimum distance criteria, removal of the levy sugar
system and allowing states procure sugar from open market and subsidising it for PDS sale at
their own cost.
Other suggestions were doing away with the regulated release mechanism for sugar meant
for open market sale, stable trade policy, no quantitative or movement restrictions on by-
products like molasses and ethanol, besides dispensing with compulsory jute packing.
According to official estimate, sugar production is likely to decline to 24.3 million tonnes in
2012-13 marketing year (October-September), from 26 million tonnes in the last year. The
annual domestic demand is about 22-23 million tonnes.
5
Sharad Pawar favours field trials of GM crops with strict safety ( ET 11/3/2013)
Agriculture Minister SharadPawar today said that agriculture scientists should be allowed to
conduct field trials of genetically modified (GM) crops by adopting strict safety measures.
In August, the Parliamentary Standing Committee on Agriculture, headed by Basudeb
Acharia, had recommended to the Government to stop all open-field trials of transgenic crops
until it develops a better system of monitoring and oversight.
"I am of the considered opinion that the distinction for-GM and anti-GM is unnecessary. We
should not analyse the scientific issues on non-scientific parameters.
"Let the science tell us what is good and what is not. And for that we must allow our
scientists to conduct the trials by observing strictest possible safety measures," Pawar said at
a conference here.
Stating that biotechnological tools possess enough potential to transform agriculture and
agro-based industry, he said the country need to ally fear of relevance and safety of such
technology.
"With the sound regulatory and testing systems, India needs to take giant steps to alley the
fear of few on relevance and safety of such technologies," Pawar said.
The minister hoped that scientists will get full freedom for their research to ensure higher and
sustainable crop productivity, better environment and remunerative agriculture.
"It is projected that by 2030 India will require a minimum of 304 million tonnes of
foodgrains, 175 million tonnes of vegetables, 96 million tonnes of fruits, 170 million tonnes
of milk and 21 million tonnes of meat, eggs and fish.
"The proposed food security Act would increase the demand of foodgrains significantly. We
need to gear up to expand the supply side. We have to enshrine the country's food security on
domestic production and not on imports," he observed.
Pawar said the future growth in agriculture has to come from acceleration in the rate of
technological change and sustainable intensification of production systems.
"Modern science such as biotechnology, nanotechnology, remote sensing offer opportunities
to enhance genetic potential of crops, improve input-use efficiency, reduce production and
transaction costs and improve sustainable use of natural resources," he added.
Speaking on the same occasion, Minister of State for Human Resource Development Shashi
Tharoor said Indian biotech industry currently employs 50000 people. To meet the growing
demand, we need to focus on training more professionals.
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"I urge the industry to partner with the government to devise right curriculum so that
graduates are ready to meet the industry demand. We need to see how biotechnology
education system evolved in Karnataka can be emulated in other states," Tharoor said.
7
IV RICE
Rice gathers steam on fresh offtake (BL 4/3/2013)
Some fresh buying pushed Sharbati rice prices upwards, while all other aromatic and non-
basmati rice varieties managed to maintain their previous levels, on Monday.
Amit Chandna, Proprietor of Hanuman Rice Trading Company, told Business Line that due
to moderate buying Sharbati rice varieties moved up while all other rice varieties ruled
firm.Trade enquires continued to strengthen the market sentiment, he said. It is unlikely to
see any major alteration this week and market may continue to rule around current levels, he
said.
PADDY ARRIVALS
About 500 bags of PR variety arrived and went for Rs 1,320 a quintal. Sharbati arrived with a
stock of around 1,000 bags and quoted at Rs 2,130. About 2,000 bags of Pusa-1121 arrived
and fetched Rs 3,500 a quintal.
Rice basmati prices rise in thin trade (ET 7/3/2013)
Rice basmati prices rose by Rs 100 per quintal in an otherwise steady wholesale grains
market today on scattered buying.
However, other grains held steady in limited deals. Marketmen said scattered buying by
stockists and retailers mainly helped rice basmati prices to trade higher.
In the national capital, rice basmati common and Pusa-1121 variety moved up by Rs 100
each to Rs 7,400-7,500 and Rs 6,600-7,300 per quintal, respectively.
Rice exports set to cross 10 mt this fiscal (BL 10/3/2013)
Rice exports are set to cross 10 million tonnes in the current financial year on robust demand
from West Asia, Africa and South-East Asian countries. Last year, the total rice exports
stood at 7.3 million tonnes.
“Till January-end, the total shipments stood at 8.2 mt. We will exceed 10 mt by March 31,”
said R. Sundaresan, Executive Director, at the All India Rice Exporters Association.
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Basmati shipments, which have gained momentum in the past two months on rising demand
from Iran, would cross 3.5 mt over the last year’s 3.21 mt.
Till January-end, the exports stood at 2.8 mt. Iran is the largest buyer of Indian basmati rice
and accounts for close to 30 per cent of the country’s shipments.
In value terms, the basmati exports may cross Rs 17,000 crore on better realisations. Last
year, the basmati exports stood at Rs 15,450 crore. The average realisations are up by about
20 per cent at around $1,200 a tonne against last year’s $1,000 a tonne, Sundaresan said.
Besides, the depreciating currency, which has made the Indian rice competitive in the world
market, has boosted the rupee-term realisations.
The non-basmati rice shipments are expected to register an increase of 58 per cent at around
6.5 mt against last year’s 4.09 mt. This is mainly on account of huge demand from African
countries such as Nigeria and Ghana and also from Indonesia. The average realisations for
non-basmati rice are around $400 a tonne.
“The overall growth in shipments is good, but the non-basmati rice continues to fetch a lower
price than our competitors. There is a need to create awareness on our quality,” said Vijay
Setia, Director at Chamanlal Setia Exports Ltd, Amritsar-based exporter.
The growth in rice export volumes is expected to help India retain the top slot as the world’s
largest exporter. Last year, India had emerged as the world’s largest exporter displacing
Thailand.
“The consistent production of over 100 mt of rice in the past four years has helped us boost
our exports. About 80 per cent of our non-basmati shipments have been to Africa, where we
compete heavily with the parboiled variety from Thailand,” said S. Venkatesh, Head of
International Trade at LT Foods Ltd. India had lifted the four-year ban on exports of non-
basmati rice in September 2011.
Rice gains on low stocks, demand (BL 11/3/2013)
Inadequate supplies and rising domestic demand pushed up rice prices by Rs 50-300 a
quintal, which were at their highest levels of the season on Monday.
Amit Chandna, Proprietor, Hanuman Rice Trading Company, said that the uptrend was
anticipated as traders are getting good demand from the domestic market.
Low availability of stocks is also a big reason behind the uptrend, he added.
9
Active participation by bulk buyers to meet the ongoing demand has pushed the market back
into a positive territory, said Amit Chandna.
According to the trade experts, market may witness some good levels in near future.
Efforts to increase export of agricultural commodities: Govt (ET 11/3/2013)
Government today said it is making all efforts to increase export of agricultural commodities,
including wheat, rice, vegetables, meat and marine products, and India has emerged as the
second highest exporter in this sector.
"The picture being painted that there has been a fall in export of agricultural products is
incorrect. Processed agricultural products, vegetables and fruits are being exported as part of
India's foreign trade policy,"Commerce and Industry Minister Anand Sharma told the Lok
Sabha during Question Hour.
He emphasised that government is giving a 5 per cent export incentive to this sector. "It is
under Open General Licence and there are no barriers," Sharma said.
The minister claimed that government is making all efforts to increase export of agricultural
products and India is now the second highest exporter in this sector.
He, however, rued that 35 per cent of the agri-products still go waste which is a very high
figure and hoped that with FDI coming in, the foreign players will open up more cold
storages and processing industries.
Sharma said other products being exported include wheat, non-basmati rice (where India is
the highest exporter in the world), bovine meat and marine products. He said all steps are
being taken to get good remuneration for the farmers.
He admitted that there is shortage of edible oil and pulses and these are being imported.
"About 8-9 million tonnes of edible oil and 3-4 million tonnes of pulses are being imported,"
he said.
India also imports palm oil which is sold at PDS shops at subsidised rate.
Demand holds rice firm (BL 14/3/2013)
After hitting the peak for this season earlier this week, aromatic and non-basmati rice
varieties ruled firm on Thursday.
10
Amit Chandna, proprietor of Hanuman Rice Trading Company, told Business Line that the
market is moving range-bound but within a positive territory.
After witnessing an uptrend earlier on Monday, market is maintaining its upper levels since
then as rising domestic demand and trade enquiries are supporting the market, he added.
Demand for full grain varieties and brokens of both aromatic and non-basmati varieties are
good. Restricted availability of stocks is also a big reason behind the current situation of the
market.
Rice millers are not showing much interest in selling at current levels as they are expecting
another uptrend in coming weeks, said market sources.
Rice seen steady on domestic, overseas demand (BL 18/3/2013)
Despite restricted trading, the rice market witnessed a steady trend with prices of aromatic
and non-basmati rice ruling without much alteration from previous levels on Monday.
The market has seen some buying over the last few weeks and prices of full grain aromatic
and non basmati rice are likely to rule around current levels for the next few days, said Tara
Chand Sharma, proprietor of Tara Chand and Sons.
Traders expect that market may witness some need-based buying with marginal fluctuation in
prices this week. Due to year-ending in March, buyers are placing smaller orders, he added.
Overseas demand especially from Africa, West Asia and South-East Asian countries is also
supporting the market.
Govt can save Rs 1,000 cr in subsidy by shifting rice area to east India (ET 21/3/2013)
The government could save at least Rs 1,000 crore in subsidy if 1 million hectare of rice
area is shifted from Punjab to eastern states, the Commission for Agricultural Costs and
Prices (CACP) said today.
It suggested focusing on cultivation of maize and soyabean in Punjab and pitched for stable
trade policy for agricultural crops to ensure adequate farm income.
"at least Rs 1,000 crore subsidies can be saved if one million hectare of rice area in Punjab is
shifted to eastern states which has plenty of water," CACPChairman Ashok Gulati said on
the sidelines of an event here.
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It is estimated that Rs 12,000/hectare is given as subsidy to provide cheaper electricity and
farm inputs to Punjab farmers, he said.
"This subsidy can be saved if the state seriously takes up crop diversification and start
focusing on growing maize and soyabean," said Gulati of CACP, which advises the
government on pricing policy for major farm produce.
Expressing concern about depleting groundwater level in the state, he said: "To grow one kg
of rice, as much as 5400 litres of water is required in Punjab, whereas it is only 2700 litres in
West Bengal. It is better to grow other crops."
He also suggested that the country's maize production can rise from the current 20-21 million
tonnes level if the same subsidy is given to maize growers in the state.
CACP emphasised that the government is making serious efforts toward crop diversification
in Punjab and Haryana. The budget allocation of Rs 500 crore for 2013-14 fiscal is the first
steps towards right direction.
On maize crop, the CACP chairman expressed concern about lower yields at 2.5 tonnes per
hectare as compared to the global average of 5 tonnes per hectare.
There is scope for enhancing yield levels through new technologies like genetically modified
(GM) crops. However, its adoption in India is a debatable issue.
"Much of maize yields in developed countries have risen to 10 tonne per hectare only
through GM crops. Is India ready to accept? This is an issue and needs to be debated," he
said.
That apart, Gulati said, "Technological breakthrough is not going to do wonders unless there
is demand driven market. Let the technology flourish through stable and steady trade
policy."
India has seen revolution in cotton, maize and pusa basmati 1121 variety rice in the last 10
years. "The revolution in this crop would remain flat if trade policy is not stable and export is
banned on maize, cotton or rice."
12
Paddy continues to face rough weather in AP (BL 20/3/2013)
After losing out to cotton in the kharif season, paddy continues to face rough weather in the
late rabi season too.
REDUCED ACREAGE
With major and minor reservoirs reporting very low water levels, farmers have reduced the
acreage by a third. From the average 15 lakh hectares for the rabi season, the total rabi
acreage of paddy fell down to just under 10 lakh hectares. As against the normal paddy area
of 41 lakh ha (kharif and rabi), the Government targeted to add six lakh hectares more in
2012-13.
PRODUCTION
As against the average production of 129 lakh tonnes, Andhra Pradesh projected an output of
154 lakh tonnes.
Most of the rabi output goes to the mandatory FCI (Food Corporation of India) levy, with
remaining 25 per cent goes for sales within the State and exports to neighbouring areas.
Foreseeing a bleak irrigation picture, the Government officials had issued advisories, asking
the farmers not to go for paddy.
“The paddy area came down as there was no water for crops under the Nagarjunasagar
ayacut. This reservoir generally takes care of irrigation to 20 lakh acres. The situation is no
different in areas irrigated by KC Canal and Sriramsagar projects. Those with good
groundwater went ahead and sowed paddy,” Yerneni Nagendra Nath, President of AP
Farmers’ Federation, told Business Line.
The woes of paddy farmers further aggravated as the crop in 50,000 hectares was damaged in
unseasonal rains and hailstorms in February.
In the crucial kharif, the paddy area came down to 20 lakh ha from the average area of 26
lakh ha, yielding the top slot for the first time to cotton. Farmers grew cotton in a record 22
lakh ha, far exceeding the average of 15 lakh ha.
The drop in the kharif area has already resulted in the sharp increase in the rice price in the
open market.
The lower output, however, didn’t immediate result in higher price for farmers.
“It is only those who grew BPT (sona masuri) got a better price. And only 25 per cent of all
paddy is this most preferred variety,” he said.
Nagendranath, however, doesn’t see any threat to availability of rice as the production of the
commodity is far higher nationally.
13
Rice rules flat on lukewarm trading (BL 25/3/2013)
With not much trading taking place in the market, prices of aromatic and non-basmati rice
varieties remained unchanged on Monday.
Amit Chandna, proprietor of Hanuman Rice Trading Company, told Business Line that the
market is moving at snail’s pace. Trading has been lukewarm over the last 10 days. Not only
the buyers but sellers are also not participating actively in the market at present, he added.
Being the last week of current financial year, it is unlikely to see much trading in the market
and prices may continue to rule around current levels, said Amit Chandna.
Meanwhile, paddy arrivals have stopped completely at the Karnal Grain Market Terminal.
There will be no more arrivals in the market as farmers are now busy with their wheat crop,
said market sources.
14
V WHEAT
Moderate buying holds wheat afloat (BL 1/3/2013)
Wheat futures and spot markets continued to remain bearish on Friday.
After witnessing some recovery earlier this week, March contracts on the National
Commodity and Derivatives Exchange decreased by Rs 2 a quintal and traded at 1,522; it had
hit a low at Rs 1,516 earlier in the dayThe open interest in the contract stood at 6,870
lots.April contracts went down by Rs 7 to Rs 1,418.
Wheat spot prices on the exchange dropped by Rs to Rs 1,515.
Export demand is lending some support to the market and limiting the downtrend, said
experts.
In the physical market, moderate buying kept dara wheat and flour prices unchanged.
After witnessing an uptrend earlier on Tuesday this week, dara wheat and flour prices ruled
unchanged since then, said Satish Kumar, a wheat trader.Dara wheat prices quoted at Rs
1,540-1,545.
Around 50 tonnes of dara variety arrived from Uttar Pradesh and the stocks were directly
offloaded at the mills.
Mill delivery was at Rs 1,540, while delivery at the chakki was Rs 1,545.
FLOUR PRICES
Following a steady trend in wheat, flour prices too ruled flat and quoted at Rs 1,750-
1,760.Similarly, Chokar continued to rule flat and sold at Rs 1,360-1400.
EXPORTS
Thailand has bought 30,000 tonnes of Indian wheat for May shipments this week at $320 a
tonne, including cost and freight.
Indian wheat prices have decreased to around $295-300 a tonne on f.o.b, against $312 quoted
last week.
According to the reports, weakness in global market is the prime reason behind the fall in
wheat prices.
Traders expect that prices may not go further down.
15
Wheat futures testing lower support level (BL 2/3/2013)
Wheat futures traded on the Chicago Mercantile Exchange (CME) is considered the
benchmark for tracking wheat prices in general. It was volatile last week, declining to an
intra-week low of 692.7 cents a bushel before recovering its initial loss and finishing the
week on an almost flat note at 713.2 cents. Wheat futures tumbled 9 per cent in February this
year.
Ever since peaking out at its July 2012 peak of 947.2 cents, the commodity has been in an
intermediate-term downtrend. While trending down, wheat futures broke through a key
support at 850 and 750 cents in early December 2012 and early February.
In early January, the commodity conclusively breached its long-term moving average line
(200-day). Subsequently, this average line acted as key resistance. Wheat futures is trading
well below its 50- and 200-day moving averages.
Last week, wheat futures found base at around 700 cents and is currently testing this support.
An emphatic breakthrough of this support will drag the commodity lower to 650 cents which
is the next significant support level. Important support below 650 cents is positioned at 600
cents.
The daily as well as weekly relative strength indices are featuring in the bearish zone
implying bearish momentum. Similarly, both daily and weekly moving average convergence
divergence indicators are hovering in the negative territory.
However, an upward reversal from the present base level can take the commodity higher to
745 cents and then to 750 cents in the short-term. Next important resistance is pegged at 790-
800 cents band. But only a strong breakthrough of the key trend-deciding level at 850 cents
will reverse the intermediate-term downtrend and push the commodity northwards to 900
cents. Significant resistance above 900 cents is positioned at 950 cents.
The long-term trend has been up for wheat futures since its trough formed at 425 cents in
June 2010. As long as wheat futures hover above its key long-term base zone between 570
and 600 cents, its long-term uptrend will remain in place. Conclusive up-move above 950
cents will pave the way for a rally to 1,000 cents in the long-term horizon.
India exports over 4 mn tonnes of wheat so far in FY'13 (ET 4/3/2013)
India has exported 4.03 million tonnes ofwheat so far in the current fiscal, of which more
than half of the grain was government-held stock, Parliament was informed today.
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In September 2011, wheat export was permitted underOpen General Licence (OGL) in view
of sufficient supply due to bumper crop, while the overseas sale of government-held wheat
stock was allowed in June 2012.
"During 2012-13 till February 22, a quantity of 4.03 million tonnes of wheat has been
exported," Food Minister K V Thomas said in a written reply to the Rajya Sabha.
Of which, 2.07 million tonnes of wheat stored in the government godowns were exported
through state agencies, while 35,000 tonnes of grain shipped to Afghanistan as humanitarian
aid, he said.
In 2011-12 fiscal, the country had exported 7,41,000 tonnes of wheat, out of this 1,00,000
tonnes of the grain was exported from the Central pool as humanitarian aid to Afghanistan,
he added.
The government-held wheat stock was not exported in 2009-10 and 2010-11 financial years.
Stating that the government has sufficient stock of wheat, Thomas said as on February 1 of
this year, the stock of wheat in the central pool is 30.80 million tonnes, against the actual
requirement of 11.2 million tonnes.
On wastage of foodgrains stocks in the state-run Food Corporation of India (FCI), the
Minister said a quantity of 1454.27 tonnes of foodgrains has been accrued as damaged/ non-
issuable as on Feburary 22 of the current fiscal.
A total of 16,386 tonnes of foodgrains was non-issuable /damaged in the last three years in
FCI, he said responding to a separate query.
Foodgrains are overflowing in the FCI godowns due to record procurement following
bumper crop of 259.32 million tonnes in the 2011-12 crop year (July-June). Of which, wheat
output stood an all-time high of 94.88 million tonnes, while rice at 105.31 million tonnes
Wheat declines on adequate supply (ET 4/3/2013)
In limited deals, wheat prices declined by Rs 10 per quintal on the wholesale grains market
today on reduced offtake by flour mills against adequate supplies from producing belts.
However, other grains continued to trade in a tight range in scattered deals and settled around
previous levels.
Marketmen said reduced offtake by flour mills against adequate stocks position mainly kept
pressure on wheat prices.
In the national capital, wheat dara (for mills) declined by Rs 10 to Rs 1,590-1,595 per
17
quintal, while atta chakki delivery followed suit and traded lower by the same margin to Rs
1,595-1,600 per 90 kg.
Low stocks, fresh demand lift wheat (BL 5/3/201)
Fresh buying coupled with low availability of stocks on Tuesday, pushed dara wheat and
flour prices up by Rs 15 and Rs 10 a quintal, respectively.
In the physical market, dara wheat went up by Rs 15 and quoted Rs 1,555-1,560 a quintal.
Radhey Shyam, a trade expert, told Business Line that low availability of stocks mainly
pushed dara wheat prices up. Only the big flour mills are getting stocks from the Food
Corporation of India through tenders, he added.
Small chakki owners are forced to buy in the open market, he said.
It is unlikely to see any major alteration in prices this week and dara wheat may continue to
rule around current levels, he added.
Around 52 tonnes of dara variety arrived from Uttar Pradesh and the stocks were directly
offloaded at the mills. Mill delivery was at Rs 1,555 while delivery at the chakki was at Rs
1,560 a quintal.
On the National Commodity and Derivatives Exchange, wheat for March delivery decreased
by Rs 15 and traded at 1,532 a quintal with an open interest of 5,660 lots. April contracts
went down by Rs 5 to Rs 1,399. Wheat spot prices on the exchange improved by Rs 5 and
traded at Rs 1,512.5.
FLOUR PRICES
Following an uptrend in wheat, flour prices too went up by Rs 10 and quoted at Rs 1,760-
1,770 . On the other hand, Chokar continued to rule flat and sold at Rs 1,360-1,400 a quintal.
Govt to prioritise wheat exports over rice, oilmeal: Official (ET 6/3/2013)
Govt will prioritise exports of wheat over rice and oilmeal if the country approves a proposal
to increase shipments, a senior farm ministry official said on Wednesday.
"Wheat exports are a priority issue as the new harvest is about to begin later in the month,"
said the official, who declined to be named as he was not authorized to speak to the media.
On Tuesday, government sources told Reuters that India was expected to allow an extra 5
18
million tonnes ofwheat exports soon, though any increase would have to find additional
capacity on India's limited rail lines and ports.
Farm Minister Sharad Pawar said cabinet was likely to discuss the issue of extra exports of
wheat at a meeting on Thursday, as the country tries to trim overflowing stocks.
Decision likely today on more wheat exports (BL 6/3/2013)
The Cabinet Committee on Economic Affairs (CCEA) on Thursday will decide on allowing
more wheat exports from Food Corporation of India (FCI) godowns, said Agriculture
Minister Sharad Pawar.
The Government has been contemplating allowing additional wheat exports of about five
million tonnes (mt) as pressure builds up to clear stocks and make storage space for the new
crop to be harvested from early April.
So far, the Government has allowed exports of 4.5 mt from the Central pool stocks, of which
over two mt have been shipped out by the State-owned entities such as PEC, MMTC and
STC.
“The proposal on wheat export is on the agenda of tomorrow’s meeting of the CCEA. Let’s
see what will happen,” Pawar told reporters on the sidelines of the Kharif 2013 conference.
MORE ON CARDS
The CCEA may also decide on giving the private trade access to the Central pool wheat
stocks for exports.
As on February 1, wheat stocks in the Central pool stood at 30.80 mt, against the actual
requirement of 11.2 m t.
The Government, which is expecting a bumper wheat harvest in the current year, aims to
procure a record 44 mt in the 2013-14 rabi marketing year starting April.
Wheat exports: Govt opens its godowns to private players (BL 7/3/2013)
The Government has finally decided to open up its wheat stocks for private trade to export.
An inter-ministerial panel, headed by Agriculture Minister, Sharad Pawar, decided to allow
an additional 5 million tonnes of wheat for exports from the Food Corporation of India stocks
by the private trade.
Recognised private exporters will be allowed to export 2011-12 crop through a bidding
process at a floor price of Rs 1,480 a quintal.
19
The latest move assumes significance as the country heads for yet another bumper wheat
harvest that has created pressure for the Government to create storage space for the new crop.
FREIGHT
However, analysts said the price fixed by the Government is not workable, as the global
prices are on the decline.
“Assuming domestic freight from Punjab godowns to the ports, shipping, finance and other
costs of Rs 2,500 a tonne, the export price at current exchange rate of Rs 54.78 translates to
$315.8 a tonne f.o.b. Indian west coast”, said Tejinder Narang, grains analyst.
The workable price for export is $280 a tonne free-on-board (f.o.b.) for soft red winter wheat
of the US.
“If the Government does not align the prices to the global market, buyers will shift to wheat
of other origins,” Narang said.
He further added that India’s decision to offload more wheat could dampen global wheat
prices further.
Wheat prices have declined by about five per cent in the past one week on expectations of
better crop in Australia and improving weather in the US.
The Government has so far allowed exports of 4.5 million tonnes by the public sector entities
such as PEC, STC and MMTC.
Of this, the PSUs have so far exported 2.3 mt and private players around 2 mt, taking the
country’s total wheat exports to 4.3 mt.
The country is expected to produce wheat crop of 92.3 mt this year and the harvest is likely
to begin by the month-end.
As on February 1, wheat stocks in the Central pool stood at 30.80 mt, against the actual
requirement of 11.2 mt.
The Government aims to procure a record 44 mt in the 2013-14 Rabi marketing season
starting April.
Private wheat exporters to wait for UP crop (BL 11/3/2013)
Private exporters, who had recently been allowed to dip into Central wheat stocks, said they
would prefer to wait for the new crop in Uttar Pradesh.
20
The wheat harvest for the current rabi season has started partially in Gujarat and is about to
begin across North India by March-end.
Recently, the Government decided to allow five million tonnes of wheat exports from its
stocks by the private trade at Rs 1,480 a quintal, a move aimed at creating storage space for
the upcoming crop.
At the current exchange rate, this translates into a price of around $315 a tonne, higher than
similar wheat from the US traded at $295 a tonne.
Exporters feel the Government pricing was expensive and it was unviable to ship at such
price with wheat coming under pressure in the global markets recently on improving weather
conditions in the US and better crop in Australia.
“We would wait to source from the open market, as the Government wheat is expensive,”
said Atul Chaturvedi, CEO – Agribusiness at Adani Group.
Uttar Pradesh, the country’s largest wheat-producing State has been the favourite sourcing
destination with the private trade and exporters for quite some time.
Poor implementation of the support price scheme makes it easier for these buyers to source
their requirement and, at times, even below the minimum support price.
Of the 30 million tonnes produced in UP, only about 5 mt is procured through the
procurement mechanism. The rest is traded through open market.
“The Government has lost an opportunity by deciding to offload 5 mt just ahead of the new
crop, and that too at a higher price. Plenty of wheat would be available across North India
over the next few days,” said Anil Monga, Managing Director, Emmsons International Ltd, a
grain exporter.
Monga said the Government would have to be very aggressive and practical to encash the
export demand that would be there for Indian wheat till June, when wheat from Black Sea
origin would enter the market.
In fact, in Gujarat, the harvest has already started and wheat is commanding a price of Rs
1,550 a quintal, Monga said. Wheat from Gujarat commands a premium because of its
quality. The Government has announced a minimum support price of Rs 1,350 a quintal for
the current year.
“Buyers are interested in sourcing at the lowest price and the UP markets provide a good
opportunity. Some exporters have already struck a deal for the new crop at $295 a tonne,”
said Tejinder Narang, a Grains analyst. Last year, wheat ruled at below support price in
several UP markets for some time.
21
India is expected to produce 92.3 mt in the current year and the opening stocks with Food
Corporation of India stood at 27.1 mt as on March 1.
Wheat may soften on new crop arrivals (BL 12/3/2012)
Easy availability of stocks coupled with reduced offtake in the market pulled Dara wheat
down while flour managed to maintain its previous levels on moderate buying, on Tuesday.
Radhey Shyam, a trade expert, told Business Line that wheat prices have started to soften
because the new crop is round the corner.
Market may move range-bound within a negative territory this week and prices may fall
further next week, he added.
FLOUR PRICES
Despite a downtrend in wheat, flour ruled firm on moderate buying and quoted at Rs 1,760-
1,770.
Similarly, Chokar remained unchanged and sold at Rs 1,360-1400 a quintal.
EXPORTS
Netherlands's Louis Dreyfus is the highest bidder for the wheat export tender floated by
MMTC Ltd last month.
MMTC had floated the tender to sell 1 lakh tonnes of wheat for export. The highest bid was
$301 a tonne.
Wheat rules firm on domestic demand (BL 15/3/2013)
Good domestic demand for flour kept dara wheat and flour prices firm on Friday.
Sewa Ram, a trade expert, told Business Line that demand for flour is keeping dara wheat
firm and prices are unlikely to change much even in the next few days.
After registering a fall earlier this week, dara wheat prices have been ruling unchanged since
then.
Arrivals from Uttar Pradesh have also dropped over the last couple of days. Low arrivals are
also giving some support to the market, he added.
22
Flour mills and small atta chakkis are depending on Food Corporation of India to meet their
demand. In the physical market, dara quoted at Rs 1,545-1,550 a quintal.
Around 200 quintals of dara variety arrived from Uttar Pradesh and the stocks were directly
offloaded at the mills. Mill delivery was at Rs 1,545 while delivery at the chakki was Rs
1,550 .
On the National Commodity and Derivatives Exchange, wheat futures and spot market
remained bearish on lack of buying interest. Wheat for March contracts decreased by Rs 3
and traded at 1,540 with an open interest of 3,460 lots.
April contracts traded at Rs 1,427 . While, wheat spot prices on the exchange decreased by
Rs 2.5 and traded at Rs 1,510 a quintal.
FLOUR PRICES
Good domestic demand kept flour firm and quoted at Rs 1,760-1,770.
Similarly, Chokar remained unchanged and sold at Rs 1,360-1400 a quintal.
FCI plans to buy export-quality wheat this year (ET 19/3/2013)
For the first time in 45 years since its inception, the Food Corporation of India will focus on
procuring export-quality wheat. The state agency plans to purchase superior grades from
farmers in Madhya Pradesh and tender them for sales overseas.
FCI may also explore procurement from Punjab, Gujarat and Rajasthan in the coming
months.
The initial tender for export is expected to be floated soon by staterun companies such
as MMTC, State Trading Corporationand PEC, officials said. "We will be floating a tender
by the second week of April for the export of high-protein wheat from Madhya Pradesh from
the new crop," saidAmar Singh, chairman and managing director, FCI.
Branded as Indian premium wheat, it will have higher protein content at 12.5% compared to
the current Indian standard of 11.5%. Gluten content will be higher by 7% at 28% compared
to normal grains, said an official.
Gluten makes the grain suitable for milling and making bread. Wheat procurement from
Madhya Pradesh is expected to begin in a day or two by FCI and state government agencies
after which samples will be sent to the Directorate of Wheat Research, Karnal, to find the
source of quality grains.
Importers have been demanding cleaner and fuller grains. On a trial basis, FCI has started
23
cleaning grains being shipped from the Mundra portin Gujarat.
FCI officials say grains sourced from the western parts of Madhya Pradesh like Indore,
Ujjain and Bhopal followed by the Malwa belt of Punjab and the Saurashtra region of
Gujarat are of superior quality. In the global market, prices have remained bearish. On
CBOT, the May futures were being quoted at $255-$256 a tonne. In the spot market, soft red
winter wheat was quoted at $290 a tonne FOB US ports.
Globally, different varieties of wheat are sold. Australia has six grades catering to Japanese
style ramen noodles, European pan breads and Chinese yellow alkaline noodles. The US has
five grades catering to the export market.
As on date, FCI has contracted 31. 80 lakh tonne wheat and shipped 25 lakh tonne. In
March,it has shipped 4 lakh tonne. South Korea followed by Bangladesh, Ethopia and Yemen
import Indian wheat. The government may explore selling wheat to Egypt and Sri Lanka, in
the coming year.
Wheat rules flat as market awaits new crop (BL 19/3/2013)
With not much trading taking place in the market, dara wheat and flour prices remained
unchanged on Tuesday.
Radhey Shyam, a trade expert, told Business Linethat after witnessing a fall last week, wheat
prices have been ruling unchanged since then.
Bulk buyers are keeping themselves out of the market as wheat prices are likely to fall in
coming days, he said.
According to the market experts, the market witnessed sluggish trend on weak demand and in
expectation of a higher new crop in coming weeks. Market is likely to move weak to range-
bound in coming days, said experts.
While, wheat spot prices on the exchange improved by Rs 7.5 and traded at Rs 1,512.5.
EXPORTS
MMTC Ltd has issued an international tender to export 65,000 tonnes of milling wheat for
shipment in April. MMTC, STC and PEC have exported 25.58 lakh tonnes of wheat so far
from the Government godowns.
24
Wheat seen rangebound with upward bias (ET 20/3/2013)
Wheat futures are likely to remain rangebound with expectations of some upside movement
ahead of the harvest and on the possibility of the government allowing more exports.
As part of its efforts to cut down unmanageable stocks, the government earlier this month
allowed private traders to export up to 5 million tonnes of wheat from its overflowing
warehouses, doubling the quantity of shipments first permitted in July 2012.
But the government needs to create more room for the new season harvest and some traders
believe the government may allow more exports.
Wheat harvesting will gather momentum in April and farmers are expected to produce 92.3
million tonnes, the sixth straight year of output surpassing domestic demand of about 76
million tonnes.
"Wheat is likely to remain rangebound and I see some upside bias because there's expectation
of more exports," said Chowda Reddy, a senior analyst at JRG Wealth Management.
India is in talks with Egypt to export wheat, India's trade minister, Anand Sharma, said on
Wednesday.
India's wheat stocks at government warehouses on March 1 were at 27.1 million tonnes,
more than three times the official target of 8.2 million tonnes for the quarter ending March
31.
On Wednesday, the most-active wheat contract for April delivery on the
National Commodity and Derivatives Exchange gained 0.07 percent at 1,429 rupees per 100
kg.
India in talks with Egypt for wheat exports: Anand Sharma (ET 20/3/2013)
India is in talks with Egypt to export wheat, India's trade minister, Anand Sharma, said on
Wednesday.
"We are in talks but have not arrived at specifications like the volume of exports and other
such details," Sharma told reporters after his meeting with Egyptian President Mohamed
Mursi who is visiting India.
India has been offering wheat from government warehouses to cut down surplus stocks and
reduce the risk of wastage through damage by pests or weather.
The wheat harvest will gather momentum in April and farmers are expected to produce 92.3
million tonnes, the sixth straight year of output surpassing domestic demand of about 76
million tonnes.
Sharma also said the state run Cotton Corporation Of India ( CCI) would offload stocks in
the open market.
25
Storage of wheat, a daunting task (ET 24/3/2013)
Storage of wheat seems to be a daunting task even as the Food Corporation of India and other
state agencies in Madhya Pradesh start procuring at the Minimum Support Price. Over 12
million tonneswheat is currently lying in open in the country under the Covered and Plinth
(CAP) storage waiting to be evacuated largely from Punjab, Haryana and Uttar Pradesh.
The government targets to procure over 44.12 million tonnes wheat in 2013-14 procurement
season. As on March 1, FCI is holding 62.8 million tonnes of food grain including 27.10
million tones wheat and 35.77 million tonnes rice.
According to FCI official, Punjab was holding record 22.76 million tonne grain. Out of this
10.39 million tonnes was wheat and 12.37 million tonnes rice. Similarly, Haryana was
holding 10.04 million tones grain (7.11 million tonnes wheat and 2.93 million tonnes rice). In
Uttar Pradesh 3.38 million tonnes grain was lying with wheat stock at 1.35 million tonnes.
"In the emerging wheat bowl of the country; Madhya Pradesh we are concerned about the
storage, considering that infrastructure is not available and the procurement target is 13
million tonnes," said an FCI official. He added that the government agencies and private
players have 6-6.5 million tonnes storage space in godowns and over 4 million in CAP. "We
are constructing 2-2.5 million tonnes new scientific CAP storage in Madhya Pradesh and
another 1 million tonnes in warehouse are getting ready," he added.
An attractive bonus of Rs 150 a quintal, over and above the wheat MSP of Rs 1350 a quintal
in the 2013-14 crop is expected to entice farmers from Gujarat, Jharkhand, Uttar Pradesh and
Chhatisgarh to sell their crop in Madhya Pradesh.
As on Sunday, over 2.16 lakh tonnes wheat has been procured by government agencies with
major arrivals coming are Ujjain, Indore, Hoshangabad followed by Bhopal. "From Monday
the procurement will be in full swing from over 2776 centres in the state," said an FCI
official from Madhya Pradesh.
Wheat procurement from Punjab which has set target of 14 million tonne will begin from
April 1 from over 1740 mandis. "The wheat stock position in the state by April 1
will touch 9.5 million tonne compared to the previous year when it was 6.5 million tonne.
We are confident of handling the stock,"said an official from department of food and civil
supplies, Punjab.
On April 1, buffer tock would be 16.2 million grain including 4 million tonnes wheat and
12.2 million tonnes rice.
26
STATE-WISE PROCUREMENT ESTIMATES OF WHEAT FOR RMS 2013-14
S.No. State Procurement Estimates
( In lakh tons)
1 Punjab 140.00
2 Madhya Pradesh 130.00
3 Haryana 78.00
4 Uttar Pradesh 50.00
5 Rajasthan 25.00
6 Bihar 15.00
7 Uttrakhand 1.50
8 Gujarat 0.75
9 Jammu & Kashmir 0.40
10 Maharashtra 0.36
11 West Bengal 0.20
12 Others 0.00
Total 441.21
27
VI Maize/ Coarse Grains
Maize up 1.9% at Rs 13,350 per tonne: USGC (BL 24/3/2013)
Maize ruled slightly firm by 1.9 per cent in the market yards across the country during the
last week at Rs 13,350 per tonne compared to the previous week following delay in arrivals
of winter crop, according to the US Grains Council.
“Corn prices on pan India average at market yard level moved up by 1.9 per cent to Rs
13,350 per tonne last week, as the rabi crop in Bihar is delayed,” USGC India Representative
Amir Sachdev said.
In Andhra Pradesh, maize prices were up by 1.56 per cent to Rs 13,350 per tonne, Gujarat
1.36 per cent to Rs 14,178 per tonne, Rajasthan 2.88 per cent to Rs 13,847 per tonne and
Uttar Pradesh 2.47 per cent to Rs 14,030 per tonne.
However, in Karnataka maize was down by 0.41 per cent at Rs 13,207 per tonne,
Maharashtra 1.03 per cent at Rs 12,879 per tonne, Tamil Nadu 3.27 per cent at Rs 13,782 per
tonne and in Madhya Pradesh it was stable at Rs 12,704 per tonne.
On NCDEX, the future prices remain bullish, while the spot prices continue their downward
trend. In the US, he said, the week started with an upward rally and prices reached a high of
$288.56 per tonne on Thursday, and finally sliding downward at settling at $285.88 per tonne
for May contract, up 1.42 per cent against the previous week’s close.
As the market moved upward, cash sales were higher as farmers liquidated stocks held by
them at farm. There is also a discussion that farmers could plant over 97 million acres of
corn, he said.
International Grains Council in its report on March 21, has estimated that the US corn crop
output in 2013-14 could increase by 30 per cent on year-on-year basis, if normal weather
continues. Due to this, the report said, the stocks are projected to recover to an eight-year
high in 2013-14 from the 16-year low in 2012-13.
Maize exports may dip by one-third this year (BL 25/3/2013)
Maize exports in the current season are expected to be lower by about a third over last year’s
record high of 4.8 million tonnes on a lower crop and rising domestic demand.
Trade expects maize exports to be in the region of around 3-3.5 mt for the crop marketing
year-ending August 2013.
28
“The lower output in the kharif season has already resulted in a decline in exports during the
first half,” an official with a multinational exporting firm said. The latest export figures are
not available.
Maize output in 2012-13 is pegged at around 21 mt on account of lower crop in Karnataka,
Andhra Pradesh, Maharashtra and Rajasthan due to erratic monsoons.
Last year, the country’s maize output stood at 21.57 mt.
Karnataka, Andhra Pradesh and Maharashtra are the three top maize producing States
accounting for half of the country’s output.
Karnataka accounts for about a fifth of maize harvest, followed by AP at 18 per cent and
Maharashtra at 12 per cent.
Further, the trade believes that the maize has an export window only for the next two to three
months till June-July after which the global supplies are expected to ease.
“The rabi maize crop in Bihar, which has been slightly delayed, looks higher by about 20 per
cent. There is a potential to export till June-July. With easing global supplies from August
and prices coming under pressure, as reflected in the Chicago futures, exports from India
were likely to be unviable,” an official from another multinational exporter said.
Bihar accounts for about seven per cent of the country’s output of 21 mt. The Chicago corn
prices have eased on better planting prospects in the US and Brazil.
Reports said corn planting in the US for 2013 is forecast to touch 97.75 million hectares, the
highest in 77 years.
Corn contracts for May on Chicago Board of Trade are hovering around $7.26 a bushel.
September 2013 contracts are hovering around $5.97, reflecting an easing trend in prices.
India’s maize exports have more than doubled in the past few years from 1.9 mt in 2009-10
to 4.8 mt in 2011-12.
Maize is largely exported to the Far East nations, where it is used for livestock feed.
29
VII PULSES
Masoor, its dal decline on subdued demand (BL 2/3/2013)
In limited deals, prices of masoor and its dal declined by Rs 50 per quintal on the wholesale
pulses market on Saturday due to lack of demand against adequate supplies.
Marketmen said lack of demand against adequate supplies mainly helped masoor and its dal
prices to decline.
In the national capital, masoor small, and bold, declined by Rs 50 each to Rs 3,650-3,850 and
Rs 3,800-3,950, while its dal local and best quality traded lower by similar margin to Rs
4,350-4,450 and Rs 4,450-4,550 per quintal respectively.
Pulses prices remain steady in thin trade(BL 9/3/2013)
The wholesale pulses market ended on a steady note on Saturday as prices moved in a narrow
range in limited deals and settled around previous levels.
Marketmen said adequate stocks position against sporadic demand mainly kept pulses steady
at previous levels.
Improved demand from mills puts pulses on the boil (BL 13/3/2013)
Pulse seeds and pulses showed a mixed trend in Indore mandis with chana, tur and masoor
showing a marginal gain on improved buying support, while moong and urad ruled stable on
subdued demand.
Tur (Maharashtra) gained Rs 50 to Rs 4,650 a quintal on improved demand and buying
support at the lower rate, while tur (Madhya Pradesh) declined by Rs 100 to Rs 4,000-4,200.
Tur had been witnessing a bullish trend during the last week with its prices going as high as
Rs 4,800 a quintal few days back on strong buying support from the millers and weak arrival.
According to Prakash Vora, a local whole-sale pulse trader, any major fall in tur prices from
its current level appears unlikely, given lower crop output this year and dependency on
imported tur.
Tur dal remained unchanged with tur dal (full) being quoted at Rs 6,100-6,200, tur dal (sawa
no.) at Rs 5,500-5,600, while tur marka ruled at Rs 6,700.
Masoor and its dal also gained on rise in buying support from the millers. Masoor (bold)
rose to Rs 3,800 (up Rs 50), while masoor (medium) ruled at Rs 3,400-3,500. Rise in sport
30
masoor also lifted its dal by Rs 25 with masoor dal (average) rising to Rs 4,150-75, masoor
dal (medium) at Rs 4,250-75, while masoor dal (bold) rose to Rs 4,350-75 .
Moong and urad also ruled stable on subdued demand. Moong (best) remained firm at Rs
5,200-5,400 while moong (medium) ruled at Rs 4,500-4,800.
Moong dal also ruled stable even as demand in pulses continued to remain slack. In local
mandis, moong dal (medium) ruled at Rs 6,000-6,100, moong dal (best) at Rs 6,600-6,700,
while moong mongar ruled at Rs 7,000-7,300.
Urad and its dal ruled flat on weak demand with urad (bold) being quoted at Rs 3,400 a
quintal, while urad (medium) ruled at Rs 3,000-3,200.
Urad dal also ruled steady with urad dal (medium) being quoted at Rs 3,800-3,900, while
urad dal (bold) ruled at Rs 4,500-4,600 .
Urad (Mongar) gained Rs 100 to Rs 5,600-5,900 a quintal on rise in buying support.
Moong, its dal prices up on scattered demand (BL 16/3/2013)
In limited deals, moong and its dal prices rose by Rs 50 per quintal on the wholesale pulses
market obn Saturday on scattered demand from retailers. However, other pulses moved in a
tight range and settled around previous levels.
Traders said scattered demand from retailers mainly led to rise in moong and its dal prices.
In the national capital, moong and its chilka local rose by Rs 50 each to Rs 5,150-5,650 and
Rs 5,600-6,000, while its dal dhoya local and best were higher by the similar margin to Rs
6,000-6,100 and Rs 6,700-6,800 per quintal respectively.
Moong on the boil on costlier import, weak inflow (BL 22/3/2013)
Improved buying support, weak arrival and decline in arrival of imported moong on the port
have lifted moong prices by Rs 200 a quintal. On Friday, moong (bold) rose to Rs 5,600-
5,800. Similarly, moong (medium) also gained Rs 200 to Rs 4,800-5,000. Besides, costlier
import has also contributed to steep rise in moong prices, said a trader Sanjay Agrawal.
Moong dal remained stable with moong dal (medium) at Rs 6,200-6,300, moong dal (bold) at
Rs 6,700-6,800, while moong mongar ruled at Rs 7,200-7,400.
Masoor declined by Rs 50 to Rs 4,000-4,050 on slack demand, while masoor (medium) ruled
firm at Rs 3,700-3,800. Given weak domestic crop output and costlier imort, any major fall
in masoor prices from its current level appears unlikely, said another trader.
31
Masoor dal (average) on Friday declined to Rs 4,350-75 , masoor dal (medium) at Rs 4,450-
75, while masoor dal (bold) declined to Rs 4,550-75 . Tur also declined by Rs 50 to Rs
4,600-50 on slack demand. Tur (Madhya Pradesh) ruled flat at Rs 4,000-4,200. Tur dal
remained unchanged with tur dal (full) being quoted at Rs 6,600-6,700 , tur dal (sawa no.) at
Rs 5,900-6,000, while tur marka ruled at Rs 7,000 a quintal.
Government extends Mar 31, 2014 ban on export of pulses till (ET 25/3/2013)
The government today extended the ban on export of pulses by one more year, but allowed
outbound shipments of kabuli chana, organic pulses and lentils with some riders.
"Prohibition on export of pulses has been extended by one more year from March 31, 2013 to
March 31, 2014. But, there are two exceptions to this. One is export of Kabuli Chana. Second
is export of organic pulses and lentils; but with a ceiling of 10,000 metric tonnes (MTs) per
annum...," the Directorate General of Foreign Trade (DGFT) said in a notification.
Export of pulses was initially prohibited for a period of six months in 2006 which was
extended from time-to-time. The last extension was up to March 31, 2013. Now, the
prohibition on export of pulses is being extended up to March 31, 2014.
The DGFT, under the Ministry of Commerce and Industry, fixed a ceiling of 10,000 metric
tonnes per annum for export of the two varieties - organic pulses and lentils - per annum and
subject to certain conditions.
It added however that these should be duly certified by Agricultural and Processed Food
Products Export Development Authority (APEDA) as being organic pulses and lentils.
The APEDA is an export promotion organisation under the Ministry of Commerce. The
export contracts should be registered with APEDA, New Delhi, prior to shipment, the
notification said, adding that exports shall be allowed only from Customs EDI Ports.
Although India is the largest producer of pulses, it has to import about 3 million tonnes of
pulses to meet the demand.
In a separate notification, DGFT allowed export of 10,000 tonnes of organic edible oils per
annum. During the 2011-12 season (November-October), India imported about 10 million
tonnes of edible oil.
32
VIII EDIBLE OILS & OILSEEDS
Cooking oil imports may touch record as demand surges, says Adani Wilmar (ET,
28/2/2013)
Cooking oil imports by India, the world's biggest palm oil buyer, will probably climb to a
record this year as demand outstrips supplies, said Adani Wilmar Ltd. Purchases in the year
through October are set to exceed the 9.98 million tonne in 2011-2012, according to Atul
Chaturvedi, chief executive officer of the country's second- biggest importer.
Buying surged 26% in the three months through January, the Solvent Extractors' Association
of India estimates. Increasing purchases may trim inventories in Malaysia and Indonesia, the
largest producers, and bolster benchmark futures in Kuala Lumpur, which slumped to a five-
week low on Tuesday. Expanding demand in India may counter the impact of an increase in
import taxes and higher export duties in Indonesiaand Malaysia, said Chaturvedi.
"The quantum of imports is basically a function of supply and demand," he said in a phone
interview from Ahmedabad. "Whatever the price, it will get imported if there is a
requirement in the country. Whether you like it or not, vegetable oil is an essential
commodity."
India meets more than 50% of its cooking oil demand through imports of mostly palm from
Indonesia and Malaysia, and soyabean oil from Brazil and Argentina. Demand will expand
6% to 17.5 million tonne this year due to rising population and disposable incomes, said BV
Mehta, executive director of the extractors' association. Consumption may surge to 23
million tonne by 2020, and imports will rise significantly to meet this demand, D Bhalla, a
joint secretary at food ministry said in September.
The annual per-capita usage in the country is 13.5 kg, compared with the global average of
about 26 kg, he said. Palm oil for May delivery advanced as much as 1% to 2,443 ringgit
($788) a tonne on the Malaysia Derivatives Exchange on Wednesday, before ending 0.4%
lower at 2,410 ringgit. Futures fell to a three-year low of 2,217 ringgit on December 13 as
stockpiles in the main producers climbed to a record.
Inventories in Malaysia jumped to an all-time high of 2.63 million tonne in December, before
falling to 2.58 million tonne last month, according to the palm oil board. The country
introduced duty-free shipments from January 1 to clear the holdings and will boost the tariff
to 4.5% in March.
Indonesia raises its tax to 10.5% from 9%. India may increase taxes on imports to shield
farmers from cheap supplies, according to the extractors' group. Finance Minister P
Chidambaram may raise the tariff on unprocessed oils to 10% from 2.5% in the Budget,
while the tax on refined varieties could increase to 20% from 7.5%, it said last week.
The government imposed a 2.5% tax on unprocessed oils for the first time since 2008 last
33
month. Oilseed output in India will be little changed at 29.5 million tonne in the year ending
June 30, from 29.8 million tonne a year earlier, agriculture ministry said on February 8.
Production of rapeseed, the biggest oilseed crop grown in the winter season, is estimated to
climb 20% this year to 7.1 million tonne, the extractors' association said earlier. "If we have a
bumper rapeseed crop, that might bring some sobriety in imports, but it's early days yet,"
Chaturvedi said.
Slack off take drags edible oils (BL 1/3/2013)
The edible oils market was cautious on Friday following continuous decline in Malaysian
palm oil futures and a weak Indian currency against the dollar.
In the absence of active demand, prices for most oils (groundnut oil, soya, sunflower and
cotton refined oils) barring palmolein dropped by Rs 5 each. Rapeseed -mustard oil ruled
steady. Sources said that during the day Liberty sold 750-800 tonnes of palmolein and Ruchi
sold 100-150 tonnes.
Soyoil rises on weak rupee; rapeseed at 1-year low (ET 4/3/2013)
Soyoil futures edged higher on Monday due to a weak rupee and gains in Malaysian palm oil,
while soybeans rose on thin supplies in local spot markets.
Rapeseed futures hit their lowest level in more than a year as supplies from the new crop
started in northern India.
A weak rupee makes edible oil imports expensive, but raises the returns of oil meal
exporters. The rupee eased on Monday.
As of 0737 GMT, Malaysian palm oil futures for May were up 1.27 percent at 2,398 ringgit
per tonne, while U.S. soybeans rose 0.38 percent to $14.71 per bushel.
"Soyoil is getting support from the falling rupee. It is making imports costlier, but the upside
is limited. The edible oil inventory is rising due to higher imports," said Vedika Narvekar, a
senior analyst with Angel Commodities Broking.
India meets more than half of its edible oil requirement through imports of which palm oil
constitutes a major part.
The key April soyoil contract on India's National Commodity and Derivatives Exchange was
0.57 percent higher at 678 rupees per 10 kg.
Edible oil stocks in India are expected to have hit a record in February as buyers rushed to
34
purchase ahead of a widely anticipated increase in import taxes that never materialised.
The soybean contract for April delivery was up 0.50 percent at 3,285 rupees per 100 kg. The
rapeseed contract for April edged down 0.23 percent to 3,407 rupees per 100 kg, after falling
to 3,357 rupees earlier, the lowest level since Feb. 14, 2012.
Rapeseed output is expected to surge by a fifth this year due to favourable weather
conditions, helping the world's biggest vegetable oil importer boost local supplies by 400,000
tonnes.
At the Indore spot market in Madhya Pradesh, soyoil edged up 0.95 rupee to 684.90 rupees
per 10 kg, while soybeans were up by a rupee to 3,398 rupees per 100 kg. At Jaipur in
Rajasthan, rapeseed was unchanged 3,637 rupees.
Soya oil slips on slack local demand (BL 4/3/2013)
Despite strong foreign support, a bearish sentiment prevailed in the soya oil on slack local
demand. In Indore mandis, soya refined ruled flat at Rs 650-55 for 10 kg on Monday.
Similarly, soya solvent ruled stable at Rs 610-15. Demand in soya oil continues to be weak
even as its prices in the past one week have fallen by almost Rs 25.
Sluggish sentiment will likely to continue in soya oil in the coming days unless and until
local demand comes up in the physical market, said a trader. In futures, however, the oil
traded low on weak buying support with its March and April contracts on the NCDEX
closing at Rs 677.10 for 10 kg (down 25 paise) and Rs 672.80 (down Re 1) respectively.Soya
seeds ruled flat at Rs 3,200-3,300 a quintal amid subdued demand, even as arrivals declined
to 75,000 bags. Farmers have retained soyabean as supply of chana and dollar chana in local
mandis has gained momentum. Plant deliveries in soyabean also ruled stable at Rs 3,360-
3,400.
On the other hand, DOC has risen by Rs 400-500 a quintal on improved demand. In the
domestic market, soya DOC ruled at Rs 28,500, while it was Rs 30,100 on the port.
Soyabean futures showed a mixed trend with March and April contracts on the NCDEX
closing at Rs 3,507 a quintal (down Rs 4) and Rs 3,278 (up Rs 9.50).
Select edible oils up on millers buying, global cues (ET 4/3/2013)
Prices of select edible oil rose by Rs 50 per quintal on the wholesale oils and oilseeds market
today on increased buying by vanaspati millers amid a firm global trend.
Linseed oil, in the non-edible segment, also moved up on increased offtake by paint
industries.
35
Traders said fresh buying by vanaspati millers amid a firm global trend on speculations that
the worst losing streak since 2006 may stoke demand, cutting reserves in Indonesia and
Malaysia, the world's biggest producers mainly led to rise in select wholesale edible oil
prices.
Meanwhile, palm oil for the contract for May climbed 1.3 per cent to USD 773 a tonne on
the Malaysia Derivatives Exchange.
Increased demand from paint makers helped linseed oil to trade higher, they said.
In the national capital, soyabean refined mill delivery (Indore) and soyabean degum (kandla)
oils rose by Rs 50 each to Rs 7,450 and Rs 7,000, while crude palm oil (ex-kandla) traded
higher by similar margin to Rs 7,400 per quintal respectively on firm global trend.
Palmolein (rbd) and palmolein (Kandla) oils followed suit and gained Rs 50 each to Rs 7,550
and Rs 7,050 per quintal respectively.
In the non-edible section, linseed oil moved up by Rs 50 to Rs 6,600 per quintal.
Edible oils rule steady (BL 5/3/2013)
Edible oils market witnessed a steady trend on Tuesday tracking calm and slightly bearish
Malaysian markets ahead of palm oil conference. Activities in spot market were suspended
due to sudden demise of a Broker member of Bombay Commodity Exchange (BCE).
Prices of most edible oils ruled steady. Local refineries and resellers kept away from quoting
prices.
Malaysian palm oil futures edged down in thin volume on Tuesday after ruling atnear two-
month lows, with traders focusing on a key industry conference to determine
strategies.Higher arrivals of groundnuts and mustard seeds in producing centres have
increased selling pressure on indigenous oils.
Daily arrivals of mustardseed reached nearly 3.80 lakh bags in which about 1.50 lakh bags
arrived in Rajasthan, in Uttar Pradesh 60,000 bags, Madhya Pradesh 75,000 bags and Gujarat
witnessed 30,000 bags. In Saurashtra – Rajkot, groundnut oil was Rs 1,850 (Rs 1,860)
for teliatin and Rs 1,225 (Rs 1,215) for loose (10 kg).
In Malaysia BMD crude palm oil’s March contracts settled lower at MYR 2,389 (MYR
2,405), April at MYR 2,400 (MYR 2,413) and May dropped to MYR 2,389 (MYR 2,405) a
tonne.
36
In Mumbai, nominal spot rates (Rs/10 kg) were: groundnut oil 1,220, soya refined oil 672,
sunflower exp. ref. 700, sunflower ref. 775, rapeseed ref. oil 715, rapeseed expeller ref. 685,
cottonseed ref. oil 615 and palmolein was 514.
Vikram Global Commodities, Chennai has quoted Rs 565 ex-Chennai for Malaysian Super
palmolein.
Benefits of higher soya export to Iran (BL 6/3/2013)
Post-sanctions, India has an edge over suppliers in North and South America.
Iran’s worldwide imports of soyameal are close to 2.2 million tonnes annually.
This year, Iran will procure higher supplies of Indian soyameal — estimated at 0.8 million
tonnes by March 2013 and 0.75 million tonnes during the leaner season of April-September
2013.
This is despite the crop of beans in Brazil, Argentina and the US that will be harvested and
crushed from April onwards.
Notwithstanding that South American prices are about 10-15 per cent cheaper now and future
charts are displaying signs of further weakness in values in the coming months, India
geographically enjoys an inherent freight advantage with the West Asian countries vis-a-vis
South America.
INDIA’S ADVANTAGE
The indicators are already flashing — during April 2012-January 2013, exports to Iran
touched 5,40,000 tonnes, against 2,30,000 tonnes in 2011-12.
For February-March 2013, an export of 3,00,000 tonnes (or 1,50,000 tonnes/month) is
expected. The trend may continue, as Iran’s public and private sectors intend to aggregate
more than adequate stocks for their food-related items to meet any exigencies.
Prior to February 6, 2013, India’s crude import from Iran was a mix of payments in hard
currency and rupees in the ratio of 55:45.
Thereafter, US’ stringent enforcement of sanctions mandated international trade with Iran in
local currencies — with zero component of dollars or euros, except on humanitarian grounds
for food and medicinal purposes.
Since dollars or euros may not be adequately available when Iran’s crude exports are
squeezed, import of foodgrains, meal and edible oil cannot easily be transacted from the
American hemisphere, unless the goods are bartered.
37
The scarcity of foreign exchange with Iran can be inferred from the weakening of its local
currency.
The Indo-Iran bilateral rupee payment arrangement, which now provides for 100 per cent
rupee trade, will ensure substantial diversion of trade to India with an added pull for
soyameal.
China and Iran, too, have a local currency arrangement, but China holds a surplus in trade
with Iran, whereas Iran has a $12-billion surplus with India. Iranian glut of rupee funds is
already banked with India’s UCO Bank.
SOYAMEAL SCENARIO
Iran has to cover its demand of meal for its livestock and has few sourcing options other than
India. Even basmati rice exporters are enlarging their export basket by pushing soyameal
exports.
The advantage here is that Indian sellers and Iranian buyers of basmati rice are familiar with
the procedural pattern of Indo-Iran trade and payment mechanism due to four years’
experience in trading the “1121” variety of basmati rice.
Tentatively, shipments of an “additional” one million tonnes to Iran are not ruled out for the
April-September 2013 period.
Decline in soyameal shipments to Japan and Vietnam this year may, therefore, be
compensated.
Exports of about 4 million tonnes (1.5 million tonnes to Iran and 2.5 million tonnes to other
destinations) are achievable in 2013-14, out of total production of about 8 million tonnes.
Farmers and producers who held back beans or accumulated inventory of meal in
anticipation of better realisation due to Iranian purchases may also have to contend with the
falling trend in world prices, which will be a limiting or negative factor.
World soyabean prices are estimated to fall by 20- 25 per cent in the next two quarters.
Trading profits are thus a challenge and depend upon corporate ingenuity to manage local
procurement efficiently.
MNCs, who may have otherwise sourced soyameal for Iran from South America in April-
September, have also diverted their business through Indian intermediaries or sister
companies based in India. More action in this segment can be expected.
Exports of value added non-traditional items such as soyameal, which is undertaken by
private players from open market, will be welcomed by the Indian Government. More
crushing of beans will yield more oil, lowering prices of edible oil and bringing down
imports.
38
The soyabean industry, which has flourished in Madhya Pradesh, has been insulated from
any direct or indirect policy intervention by the Centre, unlike wheat, rice, maize, pulses,
edible oil.
There has not been a ban or restriction on exports, even in the event of prices of beans
showing an abnormal rise, as was the case last year. Madhya Pradesh needs to incentivise
production of oilseeds or pulses over wheat.
There were some teething problems in 2012 under the Indo-Iran arrangement, causing
inordinate delay in disbursement of funds by UCO Bank.
These bottlenecks have now been fixed and authorisation of “debit advice” to UCO Bank for
effecting payment is received from Iranian counterparts within 7-10 days, subject to the
documentation being compliant with terms of letter of credit.
Moreover, Indian exporters/traders have undertaken additional precautions of insisting on
substantial advance payment at the time of contract and the balance upon completion of the
shipment.
Therefore, soyameal trade with Iran is an opportunity waiting to be exploited.
Edible oil prices slip on stockists selling, subdued demand (ET 7/3/2013)
Traders said stockists selling on sluggish demand mainly kept pressure on edible oil prices.
They said weak global trend on concern that near record high stockpiles in Malaysia, the
world's second-largest producer further curbed prices.
Meanwhile, palm oil for the contract for May lost 0.6 per cent to USD 767 a tonne on
the Malaysia Derivatives Exchange.
In the national capital, groundnut mill delivery (Gujarat) and mustard expeller (Dadri) oils
fell by Rs 200 each to Rs 12,100 and Rs 8,000 per quintal, respectively.
Cottonseed mill delivery (Haryana) oils also declined by Rs 50 to Rs 7,000 per quintal.
Taking negative cues from overseas markets, soyabean refined mill delivery (Indore) and
soyabean degum (Kandla) oils declined by Rs 200 each to Rs 7,200 and Rs 6,750, while
crude palm oil (ex-kandla) traded lower by the same margin to Rs 7,150 per quintal,
respectively.
Palmolein (rbd) and palmolein (Kandla) oils followed suit and lost Rs 200 each at Rs 7,300
and Rs 6,800 per quintal, respectively.
39
Soyabean may rule firm on meal demand (BL 11/3/2013)
After trading low for quiet sometime, soyabean prices have been witnessing an uptrend in the
past one week amid weak arrival and higher demand for soyameal. Notwithstanding closure
of local mandis on Monday on account of ‘Shomwati Amawasya’, soyabean prices ruled firm
in private trading at Rs 3,450-3,550. Arrivals in Madhya Pradesh declined to around 15,000
bags.Soyabean prices are bound to go up in the coming days on global cues and weak
arrivals, said Mukesh Purohit, an Indore-based soyabean trader.
Soyabean futures also traded higher March and April contracts on the NCDEX closing at Rs
3,600 (up Rs 31) and Rs 3,555 (up Rs 12). Similarly, plant deliveries have also gone up by
around Rs 250 a quitnal in the past one week to Rs 3,625-50. Soya oil, on the other hand,
continued to rule sluggish on slack local demand. Soya refined ruled stable at Rs 650-55 for
10 kg in absence of local demand. Soya solvent also ruled stable at Rs 617-20 amid sluggish
demand. In futures also, soya oil traded lower with its March and April contracts on the
NCDEX closing at Rs 681.90 (down Rs 1.20) and Rs 678.50 (down Rs 4.65).
Soyameal has also been witnessing bullish trend on improved local demand. On Monday,
soya DOC in the local market ruled at Rs 33,000 a quintal, while on the port, it was quoted at
Rs 34,000-34,200. On the port, soya DOC witnessed slight decline in demand at the higher
rate today.
Soybeans drop on profit-taking, higher supplies (BL 12/3/2013)
Oilseeds and soyoil futures fell on Tuesday on profit-taking driven by a correction in
overseas prices and higher supplies of soybeans in local spot markets.
Malaysian palm oil futures for May were down 1.31 percent at 2,418 ringgit per tonne, while
U.S. soybeans were 0.78 percent lower at $15.03 per bushel.
"Soybean supplies improved in the spot market due to price rise. Farmers are releasing stocks
after holding them for months. The current price is attractive," said Badruddin Khan,
associate vice-president of research at Indiabulls Commodities Ltd.
The key soybean contract on India's National Commodity and Derivatives Exchange was
down 1.70 percent at 3,499.5 rupees per 100 kg, after hitting its highest level in nearly six
months at 3,599 rupees in the previous session.
Rising soymeal exports restricted the downside in soybean prices, Khan said.
India exported 581,606 tonnes of soymeal in February, compared with 344,240 tonnes a year
earlier, an industry body said last week.
40
The key April soyoil contract was 0.88 percent lower at 672.30 rupees per 10 kg, while the
rapeseed contract for April fell 1.07 percent to 3,500 rupees per 100 kg.
India meets more than half of its edible oil requirement through imports, of which palm oil
constitutes a major part.
At the Indore spot market in Madhya Pradesh, soyoil edged down 1.65 rupees to 683.80
rupees per 10 kg, while soybeans eased by 24 rupees to 3,618 rupees per 100 kg. At Jaipur in
Rajasthan, rapeseed edged lower by 8 rupees to 3,600 rupees.
Edible oils slip as stockists keep away from buying (BL 12/3/2013)
WITH the improved arrivals of kharif crops in producing centres, prices of edible oils
dropped by Rs 3-6 for 10 kg. Soyabean refined oil declined by Rs 6.
Weak Malaysian palm oil pulled down palmolein by Rs 3. Sunflower, cotton and groundnut
oil were also under pressure.
Rapeseed oil inched up marginally by Re 1.
Sources said: “slack local demand keeps stockists away from fresh buying. Only needy
wholesalers took benefits of lower resale prices. As arrivals of imported oils are continuing
and sufficient inventories with stockists, volumes remained thin. Resellers offloaded about
150- 200 tonnes of palmolein at Rs 510-511 ex-JNPT and Rs 514-515 ex-Shahpur –
Patalganga. There were commitments for indigenous oils during the day due to improve
arrivals of seed in producing centers”.
Demand from branded goods makers pushes up groundnut oil (BL 12/3/2013)
After witnessing a bearish trend for the last two weeks, groundnut oil gained on the back of
increasing demand from brands. However, cotton oil was traded marginally down.
Groundnut oil loose was up Rs 20 to Rs 1,215-1,220 for 10 kg while telia tin improved Rs 29
to Rs 1,864-1,865 for 15 kg. Groundnut oil new tin for 15 kg was up Rs 10 to Rs 2,070-
2,075.
About 5-7 tankers of groundnut oil were traded from mills at Saurashtra. Arrivals of the
oilseed stood at 1,000 bags in Rajkot which were traded at Rs 900-1,025 for 20 kg.
Demand was good for quality groundnut due to better offtake of oil and cake from crushing
mills .
HPS TJ37 80-90 count was offered at Rs 66,000 a tonne, G2 80-90 count at Rs 68,000and
bold 50-60 count at Rs 70,000.
41
Tamil Nadu origin 80-90 count HPS was offered at Rs 70,000.
A Rajkot-based edible oil trader said that after constant downfall in groundnut oil, fresh
demand of brands has come in the market since last three days.
Cotton oil traded weak on average demand. Cotton oil wash lost Rs 3 to Rs 584-585 for 10
kg and cotton oil new tin price stood at Rs 1,040-1,045 for 15 kg.
Edible oils fall on sluggish demand, global cues (ET 12/3/2013)
Edible oil prices fell up to Rs 200 per quintal on the wholesale oils and oilseeds market today
owing to slackened demand at prevailing levels amid a weak global trend.
A few oils in the non-edible section, also showed weakness on reduced industrial offtake.
Sentiment turned bearish on sluggish demand at prevailing higher levels amid a weak global
trend where palm oil fell on speculation that exports from Malaysia, the world's second-
largest producer, may decline for a fifth month as a tax on shipments curbs demand among
importers.
Meanwhile, palm oil for the contract for May lost 1.5 per cent to USD 777 a tonne on the
Malaysia Derivatives Exchange.
Mustard prices slump, farmers a worried lot (BL 13/3/2013)
Mustard prices have dropped sharply, joining vegetables, pulses and dairy products in the
slide and easing concerns of rising prices that have been an obstacle in cutting interest rates.
But farmers are a worried lot. Vinay Chauhan, a 43-year-old farmer from Alwar district of
Rajasthan, is a disappointed man. He had grown mustard this winter in anticipation of good
returns. As he harvests the crop now, futures have slipped toRs 3,400 per quintal from Rs
4,200 per quintal at the time of sowing. Chauhan says he will hardly make a profit because
his production cost has almost crossed Rs 3,500 per quintal.
Like Chauhan, Rajkumar Gupta of Ramgarh village and Leela Khan of Samola village of
Alwar district are upset over falling mustard seed prices. "At this juncture, I am not keen to
bring my produce to the market and go for a distress sale. But even if I wait, I am not sure
whether I will get the right price. I am confused," said Gupta.
42
This confusion among mustard growers has hindered seed crushing in the current oil year.
Oil industry officials attribute the drop in mustard prices to the drastic reduction in the
imported crude palm oil price, which has pushed down the price of the entire edible oil
complex.
Vijay Data, managing director of Vijay Solvex and president of Solvent Extractors
Association, said: "The price of crude palm oil is now hovering around Rs 45 per kg as
compared to Rs 60 per kg in March 2012. This has impacted mustard seed prices. The
government has declared a minimum support price of Rs 3,000 per quintal. But input cost has
risen by 15%-20% which has increased the production cost."
Data said farmers might diversify to chana and wheat in the next rabi season due to a drop in
mustard seed prices.
The international oilseed scenario appears to be very bright this year. Brazil has produced
82.5 million tonne of soya bean whereas Argentina has produced around 51.5 million tonne
of soya bean this year.
After a steep decline last year, mustard oil production is likely to rise 27% in India this year
due to record mustard seed production in the ongoing rabi season. Mustard seed production
has been pegged at 70 lakh tonne as against 55 lakh tonne in 2012. Better weather has
boosted production in the current oil year (October 2012 to November 2013).
India is the fourth largest producer of mustard seed with a market share of around 12%.
Rajasthan, Uttar Pradesh, Haryana, Gujarat and Madhya Pradesh are the major mustard seed-
producing states.
43
Sandeep Bajoria, CEO of oil consultancy firm Sunvin Group, said soya oil prices have
dropped by $100 in last one week to $1,125 per tonne. "This is also putting pressure on the
edible oil complex." Bajoria said farmers were getting Rs 4,500 per quintal for mustard seed
during this time last year. "But this time, prices have fallen because of a better crop scenario
in India and abroad. There is resistance from farmers as they are not getting higher prices.
Farmers should try to gauge the international scenario and take a firm decision. This time I
do not think farmers will get very high prices for their produce."
Edible oils slip as new crop arrivals flood market (BL 14/3/2013)
Edible oil prices in spot and futures market continued their bearish run following pick-up in
arrivals of new crops in producing States.
In Mumbai, except groundnut oil, all other oils dropped by Rs 5-13 for 10 kg on slack
demand. Local refineries have reduced their rates in line with lower import parity tracking
bearish world market, said traders.
India's 2012/13 oilseeds output up on rapeseed surge: Trade body (ET 18/3/2013)
India's oilseeds output rose 2.6 percent to 26.7 million tonnes in the current crop year, a
leading trade body said on Monday, aided by a surge in the main winter-sown rapeseed crop
due to favourable weather conditions and higher guaranteed prices.
Output of rapeseed rose about 22 percent to 7.15 million tonnes in the 2012/13 harvest, said
the Central Organisation for Oil Industry and Trade ( COOIT), which was giving its estimate
after the crop had been harvested.
"Higher rapeseed production helped in erasing the gap in summer oilseeds production that
was hit by last year's average monsoon rains," said P.K. Sardar, executive director of the
Delhi-based trade body that met at the weekend in the tourist city of Agra to assess this year's
rapeseed output.
The surge in rapeseed output was mainly due to a 25 percent jump in the main producing
northern Rajasthan state, where output hit 3.43 million tonnes.
He also said the higher rapeseed output would raise domestic edible oil supplies for the
world's biggest cooking oil importer by about a half million tonnes, helping to cut down on
imports.
India mainly imports palm oil from Indonesia and Malaysia, and small quantity of soyoil
from Argentina and Brazil. It imports about 8-9 million tonnes a year, or about half its total
demand, with palm oil making up about 80 percent of imports.
44
Vegetable oil imports hit a record in January at 1.2 million tonnes on purchases of cheap
palm oil after Malaysia, the world's No. 2 producer, made its exports duty free from Jan. 1.
India retaliated with a 2.5 percent import duty mid-month.
While the domestic industry is lobbying the government for a further increase in duty,
concerns over high food inflation remain New Delhi's priority. The government has tried to
encourage planting of oilseeds by raising the prices it guarantees to farmers for their crop.
Finance Minister P. Chidambaram said on Monday any increase in import duty had to be
weighed against higher retail prices.
"We have actually put a small customs duty of 2.5 percent because prices were softening and
we don't think domestic retail prices will go up," Chidambaram told Bloomberg TV in an
interview on Monday.
"It is quite possible that (edible oil) prices soften further," he said.
In February, the Mumbai-based Solvent Extractors' Association forecast a 20 percent jump in
rapeseed output for 2012/13 based on a field survey after the oilseed crop entered its final
maturity stage.
Weak buying crushes soyabean, oil (BL 18/3/2013)
Ahead of the expiry of March contracts on the NCDEX, soya oil has been ruling flat in
Indore mandis for the past one week, even as there is absence of demand in the physical
market. Though in the first four-five days of the last week, soya oil plummeted to Rs 640-45
for 10 kg.
However, as the date of contract expiry approach fast, downtrend has come to an end and its
has been ruling firm at Rs 650-655 for the past two-three days.
Similarly, soya solvent also ruled stable at Rs 615-20 on absolute weak buying support. In
futures also, soya oil traded lower on weak global and buying support with its March and
April contracts on the NCDEX closing at Rs 686.30 for 10 kg (down Rs 3.75).
Edible oils slip on higher inflow of seeds (BL 19/3/2013)
Activities in edible oils markets were calm on Tuesday, tracking bearish futures market. As
the fiscal year end approaches, stockists prefer to bet for April and keep away from nearby
buying. The overall volume was thin. In the absence of active demand palmolein, rapeseed
and cotton refined oil declined in the range of Re 1-Rs 3. Groundnut oil dropped by Rs 5
45
tracking a fall of Rs 25 in telia tin in Rajkot. Firmness in the Malaysian palm oil futures
failed to lift the sentiment here as most wholesalers preferred to fulfil old commitments.
Groundnut oil rules flat (BL 19/3/2013)
Despite lower production by mills, groundnut oil prices ruled unchanged as demand was poor
in retail and wholesale markets. Cotton oil declined nominally on Tuesday.
Groundnut oil loose was traded at Rs 1,190-1,195 for 10 kg, Jamnagar line telia tin was
quoted at Rs 1,827-1,828 for 15 kg and groundnut oil new tin price was Rs 2,045-2,050 at
Rajkot. About 4-5 tankers were traded in Saurashtra.
According to a Rajkot-based edible oil trader, demand in groundnut oil is very nominal.
People are waiting for prices to decline further .
A Gondal-based miller said that groundnut oil mills are not producing the oil in bigger
quantity as brands and stockists are not buying. Arrivals stood at 1,000 bags in Rajkot which
was sold for Rs 900-1,020 for 20 kg.
Edible oils ease on reduced demand (ET 19/3/2013)
Groundnut oil prices eased further in an otherwise dull oils and oilseeds market at the
Vashiwholesale market here today on subdued demand from stockist and retailers amidst
ample supply positions.
Refined palmolein also edged down on lower retail buying support.
Linseeds oil continued its downtrend on stockist selling amidst reduced demand
from paint and alliedindustries.
Meanwhile, castorseeds bold and castoroil commercial prices held steady due to lack of any
worthwhile buying.
In the futures market, castorseeds recovered slightly owing to renewed speculative offtake
following stray export enquiries.
Rising inflow weighs on edible oils (BL 20/3/2013)
Improved arrivals of groundnut, mustard and soyabean in producing centres and slack
demand ahead of year end continue to weigh on edible oils markets. Groundnut oil extended
loss further by Rs 5, tracking weak Saurashtra market.
46
Imported palmolein and soyabean refined oil declined by Re 1 and Rs 2 for 10 kg each
despite higher closing of Malaysian palm oil futures. Rapeseed oil dropped by Rs 5.
Sunflower and cotton oil were unchanged .
A local broker said that activities in Mumbai market remained lacklustre. Stockists continued
buying for the beginning of the newfiscal starting April. In ready delivery, merely 80-100
tonnes of palmolein were sold at Rs 502-503 ex-JNPT in resale. Bunge sold about 1,000-
1,200 tonnes of palmolein at Rs 501 for April 1-10.
Edible oil gains on improved buying (BL 21/3/2013)
Extended gain in futures market and improved physical demand ahead of Holi festival next
week lifted the sentiment in edible oils markets on Thursday. Arrivals of groundnut, mustard
and soyabean seeds in producing centres were stagnant. In Mumbai, about 100-150 tonnes of
palmolein were sold at Rs 505 ex-JNPT in resale. Liberty sold about 800-1,000 tonnes at Rs
508-512, according to delivery point for April. Ruchi sold 150-200 tonnes at Rs 510 ex-
Patalganga up to April 15, broker said.. Soyabean arrivals were 1.75 lakh bags and quoted at
Rs 3,500-3,525 at Mandi level and Rs 3,600-3,625 plant delivery.
‘Dip in oilseed prices hits Rajasthan farmers’ (BL 21/3/2013)
The sharp fall in oilseed prices has hit rapeseed growing farmers, especially in Rajasthan.
Taking a cue from palm oil prices in the international market, rapeseed prices in Rajasthan
dipped to the minimum support price of Rs 3,000 a quintal from Rs 4,200 that prevailed at
the time of sowing.
“The drop in price will discourage farmers from growing oilseeds and they may switch over
to other crops in the ensuing kharif season. Our dependence on import of vegetable oil will
further increase,” said Vijay Data, President, Solvent Extractors Association.
On a positive note, he said, the Finance Minister has withdrawn the export duty of 10 per
cent on de-oiled rice bran, giving relief to the processing units in West Bengal.
Pointing to the Economic Survey concern on rising vegetable oil imports, Data said it is time
to frame a price band for edible oils in a manner that harmonises the interests of domestic
farmers, processors and consumers through imposition of import duty at an appropriate rate.
The duty will also generate revenue, which could be utilised for an oilseeds development
programme. Import of edible oil has increased by 22 per cent since the start of this oil year in
November. Import duty difference between crude palm oil and refined palm oil is only five
per cent. The inverted export duty structure on crude and refined oils created by the Malaysia
and Indonesia governments and high inventory at producing centres is pushing supply to
India.
47
“It is high time the import duty on crude and refined oil is increased, to negate their inverted
export duty structure. Otherwise, import of RBD palmolein will further increase and make
the local refiners sick and force them to close their refineries soon,” he said.
Fresh contract to import soyabean meal, groundnut oilcake and meal, sunflower oilcake and
meal, mustard oilcake and meal are not being entered into, given the uncertainty on duty-free
imports after March 31. With better soil moisture, SEA expects a larger rabi oilseeds crop of
97.93 lakh tonnes. Total oilseed production is expected to be marginally lower at 256 lakh
tonnes compared to 260 lakh tonnes recorded last year.
Edible oils rule steady on global cues (BL 22/3/2013)
Firm trend continued in edible oils market on Friday. Domestic futures extended gain
tracking firm Malaysian palm oil futures which rose the highest since February 25. In the
physical market, despite higher volumes prices for most edible oils were steady, barring
palmolein and rapeseed oil which gained Rs 2 and Rs 6 for 10 kg each.
During the day about 4,000-4,500 tonnes of edible oils were traded by stockists taking cues
of leading industry analyst who sees Malaysian palm oil stocks declining below 20 lakh
tonnes till June and weak Malaysian currency will support palm oil prices to go up further,
said traders.
Mixed trend in edible oils (BL 25/3/2013)
The edible oils market witnessed a mixed trend on Monday. Imported palmolein gained Rs 2
for 10 kg despite weak futures while soyabean refined oil ruled unchanged. Improved
demand for low-price oils pushed up crefined oil by Rs 6 and rapeseed oil by Rs 3 for 10 kg.
Groundnut and sunflower oil ruled steady.
Local refineries have raised their rates for palmolein on expectation of higher demand but
weaker closing of Malaysian CPO futures capped the overall volume, said sources.
Shailesh Kataria of Riddhi Brokers said, “Stockists have covered more than 5,000 tonnes of
palmolein last week tracking gain in Malaysian palm oil futures. But lower palm oil exports
have resulted in profit-booking. Stockists, after making good commitments for palmolein last
week, kept away from fresh bulk buying risk”.
48
IX MILK
Goa's white revolution: Milk prodn up by 20 percent ( ET 7/3/2013)
The number of dairy farmers in Goa has more than doubled during the past year, boosting the
production of milk by almost 20 per cent, signalling a white revolution in rural areas of the
coastal state.
State government officials claim that schemes implemented by Animal Husbandry and
Veterinary Services (AHVS) are driving the production as more people take to dairy
farming.
Official statistics reveal that the production has risen from 40,000 litres per day during 2011
to 51,000 litres per day from December 2012 onwards.
Officials also claim that milk production will touch 68,000 litres by end of fiscal 2013.
The number of farmers registered under various schemes implemented by Animal Husbandry
And Veterinary Services (AHVS) has increased from 6,067 last year to 15,557 in the current
year.
Giriraj Vernekar, Special Assistant to Chief Minister in-charge of agriculture and AHVS told
PTI that the schemes were tailor-made for the requirements of dairy farmers.
"The aim was to make dairy business lucrative. The farmers should get the profits," he said.
The flagship Kamdhenu scheme was modified after Manohar Parrikar took over the reins
giving more incentives to the farmers, Vernekar said.
Official records reveal that Kamdhenu scheme subsidy worth Rs 1.9 crore was distributed
during the current fiscal as against Rs 82 lakh during last fiscal.
The incentives worked and the number of farmers swelled.
"I have come across a dairy farmer who has constructed a house and can afford a
monthly EMI of Rs 25,000," Vernekar said.
Goa, which has a requirement of 3.5-4 lakh litres of milk every day is largely dependent on
neighbouring states for the supply. The cooperative movement in Goa Milk Union was not
fruitful, as milk production remained low till end of last year.
"Things are changing now for better. We have set a target of having one lakh litres of
additional milk production from Goa itself, which will decrease our dependence on other
states, B Braganza, Director, AVHS said.
49
Around 5,000 new animals would be purchased by various farmers in the state, he added.
He said that poor quality of fodder supplied to the cattle was one of the reasons for sliding
milk production.
Dairy firms upbeat on milk powder exports (BS 20.3.13)
With an inventory of about 1,00,000 tonnes of skimmed milk powder (SMP) in the
country, dairy cooperatives and private companies are upbeat on exports
After the government had lifted the ban on export of milk powder in June last year, India
exported about 60,000 tonnes of SMP. Industry sources said if there was no cap, the country
could export about 100,000 tonnes a year.
In the last five years, SMP export had been banned twice.
India processes about 370,000 tonnes of SMP a year. This year, owing to depressed domestic
demand and good milk production, there is surplus stock. The oversupply resulted in SMP
prices falling from Rs 180-200 a kg in 2011-12 to Rs 140-150 a kg in the last few months of
2012-13.
In the last nine months, private dairy products company Hatsun Agro Products has exported
about 12,000 tonnes of SMP. R G Chandramogan, the company's chairman and managing
director, says, "After the government allowed exports, it took around three months for
players to secure contracts, and the bulk of the exporting took place in the last six months.
We have also sold about 6,000 tonnes of SMP in the domestic market." He added SMP
accounted for only about 15-20 per cent of Hatsun's net sales.
Currently, prices of Indian SMP range from $2,800 to $3,200 a tonne in the international
market, against $2,600-2,700 a tonne three to four months ago. Pakistan, Bangladesh, Egypt,
Afghanistan and some Southeast Asian countries are the major buyers of Indian SMP. SMP
from New Zealand and Australia, two major exporters, costs $3,500-3,600 a tonne, against
$3,400 per tonne in November 2012.
"Exports have gained momentum due to the drought-like situation in some parts of New
Zealand and Australia," said R S Sodhi, managing director, Gujarat Co-operative Milk
Marketing Federation, which owns and markets the Amul brand of milk and milk products.
Since June 2012, Amul has exported 6,000-7,000 tonnes of SMP.
50
Delhi-based Sterling Agro Industries has exported about 8,000 tonnes of SMP. Managing
Director Kuldeep Saluja expects exports would touch 9,000 tonnes by the end of this month.
While Parag Milk Foods, which sells products under the Gowardhan brand, has exported
400-600 tonnes in the last nine months, Bhole Baba (which sells milk powder under the
Krishna brand) has exported 500-600 tonnes.
Saluja said, "Demand is likely to pick up in the domestic market around Holi. Milk
production would also drop during summers. In the last two weeks, prices have already risen
from Rs 145-150 per kg to about Rs 160 a kg."
Sandeep Aggarwal, director of SMC Foods, said, "We expect prices to touch Rs 180 a kg
during the summer months, when there would be more demand from ice cream makers."
Creamy Foods, an SMC group company that manufactures pure ghee, SMP, white melted
butter and processed liquid milk, has exported about 1,000 tonnes of SMP since June 2012.
Aggarwal said if exports continued to be allowed, the company could export about 1,500
tonnes in the next financial year.
Dairy product companies are, however, cautious in their optimism, as multiple bans on
exports in the last five years had hit India's reputation of a major exporter of milk powder.
Aggarwal said, "Indian players are unable to secure long-term contracts, as buyers are
apprehensive about a ban being reinforced." Chandramogan said if another ban was enforced,
the market created in the last few months would be hit.
51
X VEGETABLES/ ONION-POTATO
Potato prices may crash as Bengal cold storages shut doors (4/3/2013)
Mamata Banerjee’s no fare hike policy may lead to a crash in potato prices in West Bengal.
While potato production is estimated to be up by 12 per cent this season, nearly two-fifth of
the 400-plus cold storages in the State have decided to keep their doors shut, without a hike
in rentals.
The State had last raise the rentals for storage three years ago. This is despite a sharp 50 per
cent rise in storage costs, especially for energy, during the period.
According to Ram Pada Pal, President, West Bengal Cold Storage Association, cold storages
spend nearly Rs 150 for storing one quintal of potatoes during the storage season extending
between mid-February to end-November.
The rental for storing potatoes is currently Rs 101 a quintal during the season.
West Bengal and Tripura are the only two States in the country where potato cold storage
rents are controlled by the State Government.
Electricity tariffs have moved up by 50 per cent from Rs 30 a quintal about three years back
to Rs 45 at present, while diesel prices have increased by 48 per cent from Rs 35 to Rs 52.
Labour costs have also gone up during this period, thereby, exerting pressure on profitability.
As many as 100 cold storages in the State are running at a cash loss and are unable to carry
on operations this year, Pal said.
“The State Government had set up a committee to look into the issue. They have ensured
they will look into the matter. We hope that the other storage units will soon commence
operations,” he said.
SUPPLY GLUT
West Bengal, the second largest potato producing State, is likely to produce 12 per cent more
potatoes at nearly 95-98 lakh tonnes this year.
While higher production across the key producing States including West Bengal, Uttar
Pradesh and Punjab, is likely to keep the demand subdued; delayed and poor loading into
cold storages might lead to a supply glut exerting pressure on prices, said Patit Paban De,
Member, West Bengal Cold Storage Association.
Harvesting, which begins around end December, gains steam by early February and is
complete by March 15.
52
However, harvesting has been slightly delayed this year on account of late sowing following
poor rains.
“This means that a majority of the crop will come into the market by the second week of
March thereby creating a supply glut,” said a potato trader in Singur-Ratanpur area.
Potato production likely to increase 7%(ET 10/3/2013)
Potato production is estimated to jump by 7 per cent to 42.47 million tonnes this year on
increased crop output in Madhya Pradesh.
Potato production stood at 41.48 million tonnes (MT) in 2011-12 crop year (July-June).
Much of the production increase is seen in major growing states like Bihar, Madhya
Pradesh, Uttar Pradesh and Gujarat.
According to the Agriculture Ministry's first estimate, production in Uttar Pradesh, the
country's largest potato producer, is estimated to increase to 14.69 MT in 2012-13 from 14.12
MT in the year-ago period.
West Bengal is estimated to harvest 9.69 MT of potato,Bihar (6.3 MT), Gujarat (2.39 MT
and Punjab (2.12 MT) this year, according to the estimate.
Production in West Bengal and Gujarat is expected remain at last year's level. There would
be a marginal jump in the output in Madhya Pradesh, Bihar and Punjab in 2012-13.
The Centre implements market intervention scheme upon receipt of proposals from the state
governments to procure farm items, including potato. Under this scheme, in case of any
losses, the same are shared between the centre and states on a 50:50 basis.
Bengal potato prices gain as cold storages open doors (BL 17/3/2013)
Potato prices in West Bengal have inched up by nearly nine per cent, with the tuber finding
its way into the 400-odd cold storages across the State.
Wholesale price of potatoes (Jyoti variety) is ruling at Rs 500 a quintal this week, compared
with Rs 460 a quintal during a week ago period.
According to Patit Paban De, member, West Bengal Cold Storage Association, a majority of
cold storages in the State have opened their doors for storing the tuber. Nearly 55 per cent of
the potatoes have already made their way into cold storages.
53
“Barring 20-22 storage units, which have been running at cash loss, others have commenced
the process of loading potatoes following assurances from theState Government on the rental
issue,” De told Business Line.
Nearly two-fifth of the 400-plus cold storages in the State had kept their doors shut for entry
of potatoes till about ten days back, demanding a hike in rentals. The State had last raised the
rentals for storage three years ago. This is even while storage costs, particularly for energy,
witnessed a spike of almost 50 per cent, during the period.
While cold storages spend nearly Rs 150 for storing one quintal of potatoes during the
storage season extending between mid-February and end-November, they get Rs 101 a
quintal for storing those during the season.
GOVERNMENT BUYING
Potato production is estimated to be up by 12 per cent at nearly 95-98 lakh tonnes this year.
According to De, the Government is likely to purchase nearly 50,000 tonnes of potatoes
through Benfed this year.
“The Government has recently announced that they will spend nearly Rs 27 crore for
procuring potatoes through Benfed. This will instill confidence in the market and will help
keep the prices firm,” he said.
The traders and stockists who were till so far away from the market, in anticipation of a price
crash due to supply glut, have also stepped in to stock the tuber.
STEADY DEMAND
There has been a good demand for Bengal potatoes in Odisha, Andhra Pradesh and
Jharkhand.
“Bengal potatoes are comparatively cheaper compared with potatoes of other States such as
Uttar Pradesh and the quality is also good. So they are finding acceptance in these markets,”
he pointed out.
Onion production estimated to fall 4% in 2012-13 (BL 19/3/2013)
Onion production is estimated to decline by four per cent to 168.17 lakh tonnes in 2012-13,
the Parliament was informed today.
The average wholesale price of onion in major markets ranges from Rs 936 to Rs 1,747 per
quintal.
“According to current estimates, onion production during 2012-13 is estimated at 168.17 lakh
tonnes as against 175.11 lakh tonnes last year,” Minister of State for Agriculture Tariq
Anwar said in a written reply to the Lok Sabha.
54
The prices of onion are governed by market forces of demand and supply and depend on a
host of factors which influence production and arrivals in the market, he added.
According to the data, onion output in Maharashtra, the largest producing State, is estimated
to decline to 45.46 lakh tonnes in 2012-13 from 56.38 lakh tonnes in the previous year.
However, production in Karnataka and Madhya Pradesh is likely to be higher this year.
Onion production in Karnataka is estimated at 25.23 lakh tonnes in 2012-13 against 24.51
lakh tonnes in the previous year, while output in MP is set to increase to 21.53 lakh tonnes
from 19.57 lakh tonnes in the review period.
Production of onion in Bihar is also expected to rise marginally to 12.8 lakh tonnes in 2012-
13 from 12.36 lakh tonnes in the previous year.
Gujarat’s onion production would remain flat at 15.62 lakh tonnes.
Onion may drop further (BL 22/3/2013)
With arrivals of rabi crop gathering pace, onion prices are likely to drop further. “At least 90
per cent of the arrivals in the market are from the rabi crop. The late kharif arrivals are
coming to an end,” said C.B. Holkar, member of the National Agricultural Cooperative
Marketing Federation.
“Rabi arrivals have begun all over the country. Currently, onions are arriving in Maharashtra,
Madhya Pradesh and Gujarat. Soon, the crop from Karnataka and Andhra Pradesh will begin
to arrive, putting pressure on the price,” said R.P. Gupta, Director of the National
Horticultural Research and Development Foundation, Nashik, over phone.
Onion harvest will begin in Orissa and West Bengal next week and thus, demand will be
subdued, Gupta said. “Prices are set to drop. We shouldn’t be surprised if prices drop to
around Rs 700 a quintal. But they should not fall below Rs 500 since it will become unviable
for farmers,” Gupta said. “Prices are showing a tendency to fall,” said Holkar.
On Friday, the modal price or the rate at which most trades took place in onion was Rs 950 at
the Lasalgaon Agricultural Produce Marketing Committee yard, Asia’s biggest for onion.
Prices are almost half of what they were at the start of last month. Arrivals, barring Friday,
have been above 1,000 tonnes at the Lasalgaon APMC.
The decline in prices is helping exports. “This financial year, we could end up exporting
more onion than last year,” said Gupta. In the first 10 months of the current fiscal, onion
exports totalled 13.78 lakh tonnes (15.52 lakh tonnes – last year) valued at Rs 1,172 crore
(Rs 2,141 crore), according to the National Agricultural Cooperative Marketing Federation.
“Exports are good. In fact, we asked the Government not to raise the floor price for onion
export,” said Holkar.
55
XI SUGARCANE/ SUGAR
Sugar decontrol in phases a must: Economic Survey 2013 (ET 27/2/2013)
The Economic Survey 2013 today suggested removal of controls on the "over-regulated"
sugar sector in a phased manner as recommended by the Rangarajan committee.
Although the country is world's largest consumer and second biggest producer of sugar, the
sector "suffers from policy inconsistency and unpredictability," it said.
Pitching for decontrol, the Survey said: "The sugar industry in India is over-regulated and
prone to cyclicality due to price interventions... the government should come into the picture
only in situations where absolutely necessary."
Export bans and controls could be replaced with small variable external tariffs to stabilise
prices.
Stating that the issue of sugar decontrol has been widely debated for a long time, the Survey
said: "From a purely economic point of view, greater play of market forces would provide
better prices and serve the interests of all stakeholders."
Listing out the major recommendations made by the Rangarajan committee on sugar
decontrol, the Survey said: "A stable, predictable, and consistent policy reforms have to be
brought about in a fiscally neutral manner and issues considered for implementation in a
phased manner."
The key recommendations of the Rangarajan committee report included phasing out cane
reservation area, dispensing with minimum distance criteria, removal of the levy sugar
system and allowing states procure sugar from open market and subsidising it for PDS sale at
their own cost.
Other suggestions were doing away with the regulated release mechanism for sugar meant
for open market sale, stable trade policy, no quantitative or movement restrictions on by-
products like molasses and ethanol, besides dispensing with compulsory jute packing.
According to official estimate, sugar production is likely to decline to 24.3 million tonnes in
2012-13 marketing year (October-September), from 26 million tonnes in the last year. The
annual domestic demand is about 22-23 million tonnes.
Sugar may see some rise on new month demand (BL 28/2/2013)
Spot prices on the Vashi wholesale sugar market dropped by Rs 10 a quintal for S-grade on
Thursday. M-grade ruled unchanged. Naka and mill tender rates were steady as there was
nothing to cheer for the sugar industry in the Union Budget, said traders.
Domestic sugar futures dropped sharply on speculative selling. The volume was thin due to
ample stocks in the market.
56
Players were expecting hike in excise duty on sugar as the Government is keen to free the
sector from controls of selling its produce through a quota system and levy obligation.
Sources said that “with start of the new month, local retail demand will increase and with
producers not very keen to sell at lower rates, the market may witness some improvement in
the coming days. Demand will pick up as Maha Shivrati will be celebrated next week.
“Sugar price will not go up sharply as supply from mills is ample at local level due to lack of
demand from the neighbouring States in Maharashtra. Selling and lifting pressure will also
ease in the month beginning”.
Sugar closes quiet on restricted arrivals (BL 2/3/2013)
Sugar prices ended quiet in the national capital on Saturday following sporadic demand
against restricted arrivals.
Marketmen said small buying support and adequate stocks position, mainly kept prices
unaltered.
The following were today quotations per quintal: Sugar ready: M-30 Rs 3,300-3,400, S-30 Rs
3,275-3,375.
Sugar output falls marginally to 18.8 mn tonnes so far: ISMA (ET 4/3/2013)
The country produced 18.8 million tonnes of sugar in the first five months of the ongoing
2012-13 season that started from October 2012, slightly lower than the year-ago period,
industry body ISMA said today.
Production has started slowing down with 50-odd mills in Maharashtra and Karnataka
closing crushing operations; it said and maintained that the country's overall sugar output is
estimated to be 24.3 million tonnes for the current year.
"452 mills have crushed about 190 million tonnes of sugarcane, to produce 18.8 million
tonnes of sugar. This is 60,000 tonnes less than last year, despite almost same quantity of
sugarcane crushed in both years," Indian Sugar Mills Association (ISMA) said in a
statement.
Maharashtra, the country's largest sugar producing state, has produced 6.53 million tonnes of
sugar till February of the current year, as against 6.5 million tonnes in the year-ago period.
Sugar recovery was lower at 11.15 per cent and 30 mills have already closed their
operations.
In Uttar Pradesh, the country second largest sugar producing state, sugar production has
dropped slightly to 5.03 million tonnes from 5.29 million tonnes in the review period. Sugar
57
recovery was 8.95 per cent.
ISMA said the gap in sugar production in the state has widened due to continuous cold and
unseasonal rains last month, which hampered sugarcane arrivals to mills.
About 119 mills are operating in the state. Western Uttar Pradesh is showing better
recoveries, but eastern region is lower and the central region is same as that of last year, it
added.
In the southern part of the country, sugar production in Karnataka stood at 3.02 million
tonnes during October-February period of this year, three per cent lower than the year-ago
period.
Sugar recovery remained lower and production in Karnataka has also slowed down. Besides,
22 mills in the state already closed their operation for this year.
Stating that Tamil Nadu is continuously reporting lesser sugar recovery, ISMA said the state
has produced 9, 30,000 tonnes of the sweetener so far this year with 44 mills under operation
at 8.8 per cent recovery.
Lower recovery in sugar was due to weak north-east monsoon last year along with drought
impact on varieties like CoV 94101 which cover good acreage under some mills, it added.
Andhra Pradesh has produced 8,30,000 tonnes of sugar so far in the ongoing marketing year
with 28 mills under operation, which is about 3 per cent lower than year-ago year. Sugar
recovery remained lower at 9.62 per cent.
Cabinet may consider decontrolling sugar next week; stocks rally (ET 5/3/2013)
Shares of sugar companies were in action on reports that the Cabinet may consider
decontrolling the sugar sector next week. The Food Ministry is likely to send a note on sugar
decontrol soon.
Last month, Food Minister KV Thomas had said decision on issues like levy sugar, release
mechanism and others will be addressed soon.
The government is expected to abolish the release order mechanism, a move which will free
the sugar sector from its clutches and also removal of levy under which millers have to set
aside a specific portion of their annual output for selling through the Public Distribution
System (PDS).
58
According to reports, the government may raise the excise duty on sugar output and levy a
moderate export duty if it decides to lift controls on the commodity. This will help the Union
government to reduce the financial burden of selling sugar at subsidised rates to poor families
after buying it at market rates from sugar companies.
Siddharth Shriram, CMD, Mawana Sugars, in an interview to ET Now told that the sugar de-
control is needed for the sector.
Sugar futures rebound on bargain buying (ET 5/3/2013)
Sugar futures rebounded on Tuesday from a contract low hit in the previous session as
expectations the government would lift some curbs on the tightly controlled industry
prompted bargain buying.
India is set to consider relaxing controls on the industry, a minister said on Monday, as the
prospect of high output this year creates the conditions for liberalisation without a sharp rise
in prices.
"Market is expecting some kind of relief measures from the government. It may decontrol the
sugar industry or may raise duty on imports," said Badruddin Khan, associate vice-president
of research at Indiabulls Commodities Ltd.
India, the world's second-biggest producer of sugar after Brazil, has been exploring options
to free the sector from various controls to avoid cycles of oversupply and shortage.
As of 0858 GMT, the key April sugar contract on the National Commodity and Derivatives
Exchange was up 0.69 per cent at 3,067 rupees ($55.89) per 100 kg, after hitting a contract
low of 3,034 rupees on Monday.
Spot sugar eased 9 rupees to 3,155 rupees per 100 kg in the Kolhapur market in top-
producing Maharashtra state.
Sugar mills produced 18.8 million tonnes of the sweetener between Oct. 1 and Feb. 28,
60,000 tonnes less than a year earlier.
The south Asian country is likely to produce 24.3 million tonnes of sugar in the current crop
year ending on Sept. 30, against local demand of about 23 million tonnes.
59
Sugar sector needs holistic policy (BL 6/3/2013)
Decontrol is on the cards. The least that is likely to happen is the abolition of ‘levy system’
(compulsory procurement of sugar at below-market prices) and withdrawal of the free-sale
quotas.
In other words, sugar mills will not be required to surrender a part of the production to the
Government and will be free to sell their entire production according to their own business
plan.
To meet the requirement for the public distribution system, the Government will buy sugar
from the open market; and the difference between such open market purchase price and PDS
supply price will be absorbed as subsidy.
To meet the subsidy burden, additional revenue is proposed to be raised through a hike in
excise duty on manufacture of sugar.
Decontrol does not just mean removal of some restrictions. In spirit, it means much more.
There are a few more issues relating to the sugar sector that deserve close attention.
There is demand in some quarters that the statutory minimum price for cane should be
abolished and free market pricing must be introduced. This damaging suggestion deserves to
be rejected right away.
The statutory price is a critical support system for cane growers who should not be subject to
the unintended oppression of a free-market system.
A more important aspect is cash flow for growers.
Because cane is a 12-14 month crop, cane growers have to wait for over a year to realise
some income. Even here, more often than not, mills keep huge arrears of payment. This must
stop. There is also a suggestion that growers should be free to sell to any mill irrespective of
zoning restriction.
Keeping all these in mind, an equitable solution would be for the mills and growers to agree
in advance on the quantity of cane to be traded; and the mill should provide an advance to the
grower say half way through the crop production cycle or six months.
This will result in a formal arrangement, whereby, the grower has received an advance and
the mill is sure of receiving the contracted quantity when harvested.
At the time of harvest, the grower may be free to sell to anyone the quantity, if any, not
contracted for by any mill.
60
The next tricky issue is the cyclical nature of cane crop. This cyclicality has to be effectively
broken; and sustained flow of raw material should be ensured season after season.
Climate change and risk of water shortage are likely to pose a serious challenge in future to
cane cultivation. This calls for redoubling of research efforts to get sugarcane climate-ready.
Also needed are policy initiatives to infuse stability in the market. We need a stable and open
foreign trade policy.
The government should keep export and import open and not tinker with the trade policy.
Tariff measures (customs duty on export or import) should be used to either encourage or
discourage exim trade depending on market conditions and prices.
With nearly 600 sugar mills dotting the country’s landscape – many of them with modest or
sub-optimal capacity for cane crushing – the industry as a whole is losing scale-economies.
Fragmentation must give way to consolidation and modernisation.
Removing the levy system and free-sale quotas is critical; but they alone cannot lend
competitiveness to this industry.
A holistic approach with a long-term perspective to sugar decontrol is necessary.
Sugar steady as mills continue selling (BL 6/3/2013)
Sugar prices on the Vashi market ruled steady on second consecutive day on Wednesday on
routine activities and continuous selling by producers. Some mills sold fair quality at lower
rate which kept sentiment weaker at upper level.
Fine quality sugar was quoted slightly higher in spot. Naka rates were unchanged. Mill tender
prices declined by Rs 10-15 a quintal. With routine demand and ample supply, volume
remained steady in physical market. Retail and wholesale demand has not picked up as
expected in the beginning of the month, said sources.
Jagdish Rawal of B.Bhogilal and Co, said, “Continuous selling by mills in local markets in
absence of neighbouring States buying in Maharashtra kept supply ample here. Vashi market
carries more than 120 truckloads of stocks which keep stockists away from fresh bulk
buying. Local retailers demand is also not picking up as expected. But with rise in
temperature all over, traders expect demand for sugar to improve soon. Crushing season is
also expected to end in May.” On the National Commodities and Derivatives Exchange,
sugar April futures was down Rs 13 to Rs 3,050 , May contracts dropped by Rs 19 to Rs
3,108 and June closed lower by Rs 24 to Rs 3,160.
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Cabinet may consider decontrolling sugar next week; stocks rally (ET 5/3/2013)
Shares of sugar companies were in action on reports that the Cabinet may consider
decontrolling the sugar sector next week. The Food Ministry is likely to send a note on sugar
decontrol soon.
Last month, Food Minister KV Thomas had said decision on issues like levy sugar, release
mechanism and others will be addressed soon.
The government is expected to abolish the release order mechanism, a move which will free
the sugar sector from its clutches and also removal of levy under which millers have to set
aside a specific portion of their annual output for selling through the Public Distribution
System (PDS).
According to reports, the government may raise theexcise duty on sugar output and levy a
moderate export duty if it decides to lift controls on the commodity. This will help the Union
government to reduce the financial burden of selling sugar at subsidised rates to poor families
after buying it at market rates from sugar companies.
Siddharth Shriram, CMD, Mawana Sugars, in an interview to ET Now told that the sugar de-
control is needed for the sector.
PM intervenes to speed up sugar decontrol (ET 6/3/2013)
Prime Minister Manmohan Singh has intervened to speed up the decontrol of sugar, the
sector that has remained under stern state supervision despite two decades of liberal reforms,
and asked the food ministry to act promptly on the proposal to unwind controls.
The finance ministry had raised concerns that liberalising sugar, which would end below-cost
supplies from mills to the public distribution system, would raise the subsidy burden, while
the proposed increase inexcise duty would be inflationary. But the PMO wants the proposal
to be put before the Cabinet.
"The PMO has written a letter to the food ministry asking it to put the proposal immediately
before the Cabinet," said a food ministry official.
Food Minister KV Thomas told ET the proposal is likely to be placed before the Cabinet in a
week. "We are ready with the proposal and it will be taken up in this week's Cabinet meeting
or latest by the next Cabinet meeting," he said. Earlier, Thomas had said the ministry will
propose sugar decontrol only after taking the consensus of the finance ministry. The proposal
has the backing of the Planning Commission and the agriculture ministry.
62
However, the finance ministry has objected, saying that raising the excise duty to cover the
subsidy component would lead to inflationary concerns.
The food ministry has proposed to increase the excise duty, which stands at Rs95 a quintal
including a cess of Rs24, byRs150 a quintal to offset the financial implication. Currently,
mills have to sell 10% of total production to the government at Rs19.04 per kg, as against the
wholesale market price of Rs31 per kg, for public distribution through ration shops.
The government then sells it at Rs13.50 per kg to 6.52 crore poor families and bearing a
subsidy of Rs2, 300-Rs2,500 crore a year. "The subsidy, shared between the government and
sugar companies, will be borne entirely by the government, swelling the food subsidy bill
which has already crossed Rs85,000 crore," said a food ministry official.
Sugar industry seeks Moily’s help for ethanol supplies (BL 12/3/2013)
Faced with molasses storage issues, the sugar industry has sought intervention of Petroleum
Minister Veerappa Moily in speeding up the ethanol tendering process of oil marketing
companies.
The Indian Sugar Mills Association in a letter to the Petroleum Minister has urged him to
advise the OMCs to finalise the tenders at the earliest so that the factories could begin
supplies.
The Government, on January 2, had notified the mandatory five per cent blending of ethanol
with petrol to be achieved by June 30.
The OMCs had floated tendersin January for which the sugar millers had submitted their bids
by January 28.
However, the delay in finalisation of tenders by OMCs has left the millers worried as the
sugarcane crushing enters the last phase of the 2012-13 seasons.
COMMITMENT
“Due to the delay, the industry has not been able to supply even one litre of ethanol in the
current season. The delay has not only created storage issues as over 80 per cent of the
molasses has been produced, but has also affected the cash flows for the millers,” said
Abinash Verma, Director General, ISMA.
The industry has so far produced about 8.8 million tonnes of molasses this season. For every
100 kg of sugar produced, about 45 kg of molasses is generated as a by-product, ISMA says.
So far, the country has produced 19.5 million tonnes of sugar in the current season.
63
Each tonne of molasses yields on an average of 250 litres of rectified spirit or alcohol or
ethanol.
In the current sugar year, the industry has committed to supplying 55 crore litres of ethanol,
while the actual requirement of the OMCs is estimated at 105 crore litres.
About half of the estimated 250 crore litres produced is used for production of potable
alcohol.
SUPPLEMENTARY TENDER
Since this was the first year of e-tender procurement and as several factories couldn’t
complete all their formalities, ISMA urged the Ministry to come up with a supplementary
tender. The delay in tender finalisation has also led the factories to commit their molasses
supplies to other uses like cattle feed and production of industrial alcohol, among others.
Some factories in Maharashtra have reportedly exported certain quantity of molasses to the
European Union for cattle feed.
Sluggish offtake drags sugar (BL 12/3/2013)
Sugar prices on the Vashi spot market dropped further by Rs 10 a quintal on Tuesday as mills
continued to sell fair quality S – grade at lower rates.
Naka prices ruled steady while slack wholesale buying pulled down mill tender rates by Rs
10.
The volume was routine as local demand slowed down.
A wholesaler said, “Some needy producers are forced to sell their commodity at lower rates
in local markets in the absence of upcountry demand. On the other hand, local demand also
eased in middle of the month keeping supply more than sufficient in the local market. Vashi
Bazar currently carries more than 120 truckloads of inventory. Daily arrivals are proving
higher than local offtake. Domestic futures prices witnessed thin volatility”.
Sugar futures up on hope of lifting of curbs (ET 13/3/2013)
Sugar futures prices on Wednesday edged higher by Rs 10 to Rs 3,040 per quintal as
speculators enlarged their positions on hopes that the government likely to lift some curbs on
the controlled industry.
However, ample supplies against subdued demand in the spot markets, limited the upside.
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At the National Commodity and Derivatives Exchange, sugar for delivery in March traded Rs
10, or 0.33 per cent, higher at Rs 3,040 per quintal, with an open interest of 7,190 lots.
The sweetener for delivery in far-month April also gained Rs 10, or 0.32 per cent, to Rs
3,089 per quintal in an open interst of 36,570 lots.
Marketmen attributed rise in sugar prices at futures trade to expectations that the government
would consider lifting some curbs on the controlled sector but supply pressure and subdued
demand in the spot markets, capped the gains.
Ample supply, sluggish offtake hold sugar steady (BL 13/3/2013)
Sugar prices on the spot market ruled steady on Wednesday. Routine wholesale and retail
demand in middle of the month kept prices under check at upper and market level.
Mills sold regular quality at steady rates that kept naka and spot prices unchanged. Domestic
futures prices were also range-bound on thin trade. Morale was calm, said traders.
A wholesaler said, “In the absence of bulk buying enquiry activities remained need-based.
Mills and traders are carrying sufficient stocks with them resulting in continuous selling
pressure. Neighbouring States buying is lacking in Maharashtra as sugar prices in other
producing centres are at par with the parity of Maharashtra. Local retail demand also eased in
middle month. Daily arrivals are more than demand”.
Sugar rules steady (BL 14/3/2013)
Sugar prices on the Vashi market ruled almost steady with thin volatility on sixth consecutive
day on Thursday.
Stockists offloaded fair varieties at Rs 4-5 lower in Vashi spot market to ease inventory.
Naka and mill tender rates were unchanged.
Despite reports of expectation of sharp drop in sugar output in Maharashtra next season
domestic futures market witnessed bearish trend.
Futures prices were down by Rs 20-28 till noon. Morale was slightly weak, said sources.
A wholesaler said, “In physical market with routine demand-supply overall activities
remained thin and need-based.
No one was interested in taking big risk as futures prices were weak.
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There is ample and regular supply from mills in local markets and Vashi Bazar carries more
than 125 truckloads of stocks.
Upper level upcountry buying is still missing forcing the producers to concentrate on local
markets.”
Sugar companies shares sweeten on hopes of price decontrol (FE 18/3/2013)
Sugar companies shares rose by as much as 3 per cent in an otherwise weak market today on
expectations of partial decontrol of the sector. Shares of Dhampur Sugar Mills surged 3.28
per cent to Rs 48.75, while Triveni Engineering & Industries rose by 2.18 per cent to Rs
16.40 and Shree Renuka Sugars was up 1.7 per cent at Rs 26.90 on the BSE.
Among others, Simbhaoli Sugars climbed 1.03 per cent, Bajaj Hindusthan (1.15 per cent),
Dwarikesh Sugar Industries (1.82 per cent) and Sakthi Sugars (1.96 per cent).
Analysts said that sugar companies gained on hopes of removal of a requirement that they
sell a portion of their sugar output to the government at reduced prices.
"Sugar stocks rose in a knee-jerk reaction to reports that the government is planning to
decontrol the sector," Ashika Stock Brokers, Research Head, Paras Bothra.
Food Minister K V Thomas had said last week that the proposal on removal of levy sugar
obligation may come before the Cabinet Committee on Economic Affairs (CCEA).
Under the levy sugar system, mills are required to sell 10 per cent of their output to the
Centre at cheaper rates to run ration shops, costing Rs 3,000 crore to industry annually.
The BSE 30-stock index, Sensex, ended the day at 19,293.20, down 134.36 points.
Sugar rules flat on ample supply, slack demand (BL 18/3/2013)
Sugar prices ruled unchanged at all levels on Monday as the trade awaited outcome of
meeting regarding sugar policy.
Mills continued selling at prevailing rates that kept supply ample in local markets. On the
other hand, local demand was need-based in middle of the month.
A wholesale trader said: “Activities remained routine as mills continued selling due to
month-end. All were cautious ahead of the crucial meeting to be held at Delhi on policy
changes regarding decontrol of sugar sector or hike in excise duty. As sugar prices are ruling
weak in other producing centres demand here continued to be limited to only local
distribution markets”.
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Holi fails to boost demand for sugar (BL 19/3/2013)
Sugar prices on the Vashi spot market dropped by Rs 6-10 a quintal on regular supply from
producers and slack demand. Naka rates witnessed a mixed trend with S-grade declining Rs
10, while M-grade inched up by Rs 10. Mill tender rates were down by Rs 5-10 as producers
continued selling. Need-based local demand and bearish futures kept morale weak in
physical market, said traders.
Jagdish Rawal of B. Bhogilal & Co., said: “Activities remained calm at market and mill level
as local demand was need-based due to month-end. Producers were eager to sell as financial
year closing comes nearer. Despite Holi festival next week, retail offtake has not picked up
as expected. Higher and continuous supply from mills resulted in building up sufficient
stocks in Vashi markets. Market carries more than 120 truckloads of stocks and hence
stockists keep away from fresh bulk buying,” he said.
Sugar market left searching for direction (BL 20/3/2013)
Sugar prices ruled steady at all levels on Wednesday as demand eased and there were no
positive cues. On the Vashi wholesale market, stockists offloaded fair quality sugar at prices
lower by Rs 2-5 to ease inventories. Naka and mill tender rates also ruled unchanged on
routine demand and continuous supply from producers.
Sources said: “The physical market extended loses, taking cues from the domestic futures
that fell by Rs 15-20 till noon. Overall, the loss this month is Rs 100 a quintal. Prices have
constantly been under pressure on speculation of higher production. Supply is ample in the
domestic market as prices in other producing centres are ruling at a par with Maharashtra.
Actually, the market is in need of cues for further direction.”A retail broker said, “Despite
Holi festival next week there is no sign of any improvement in retail offtake. Activities
remained calm at market and mill level as local demand continued to be need-based due to
month end.”
Poor retail offtake continues to dog sugar (BL 21/3/2013)
Sugar prices dropped by Rs15-25 a quintal on Thursday in absence of any positive cues and
slack demand. A bearish sentiment in the domestic futures market also weighed on physical
market that is already reeling under selling pressure. Positive signs seem to be evaporated
from the market for the time being, feeltraders.
Sugar prices on the Vashi wholesale spot market dropped by Rs10 for M-grade, while S-
grade rule unchanged. Immense pressure to resell pulled down naka rates for S-grade by
Rs10-25 and M-grade by Rs 20-50.
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As the financial year-end nears, producers continue selling at lower prices. The domestic
futures market was down by Rs 15 till noon. Jagdish Rawal, a wholesaler, said: “As the
financial year-end nears, all (traders and stockists) are busy in closing or finalising their
accounts. They are keeping away from buying. On the other side, millers are forced to sell at
the prevailing price to maintain liquidity on hand. This has led to ample supply in local
markets.
“Prices in other producing centres are also weak at a par with Maharashtra, keeping
upcountry buyers off from here. In the local market, there is no sign of revival in retail
offtake for the Holi festival next week. Arrivals were higher than demand in Vashi market.
Sugar mills under pressure to sell (BL 22/3/2013)
Sugar prices extended losses on Friday on continuous selling by mills at lower rates due to
financial year ending next week. Need-based local demand forced producers to offload the
commodity to ease inventory pressure on them. On the Vashi wholesale spot market, prices
dropped by Rs 10-20 a quintal. Naka rates declined by Rs 5-10 while mill tender rates cooled
by Rs 10-20. A wholesaler said: “In absence of any positive cues and continuous supply from
mills kept stock position more than sufficient at market level. Bearish futures market which
dropped by more than Rs 150 this month for April – May pulled down physical prices by Rs
60 till now. Upcountry buying is totally lacking in Maharashtra since long as prices in other
producing centres are at par with Maharashtra’s parity. Hence local producers are forced to
upload in State markets”.
Govt will take 'appropriate' decision on sugar decontrol: Anwar (ET 25/3/2013)
Pitching for decontrol of the sugar sector, Minister of State for Agriculture Tariq
Anwar today said the government will take "appropriate" decision on the issue.
The sugar industry is the only sector which is controlled by the government right from the
production through marketing of sugarcane and sugar.
"The problems facing sugar sector have been examined by a number of committees from
time to time. The recommendations of the Rangarjan Committee report shall be examined
and appropriate decisions to be taken on how best to promote this sector," Anwar said while
addressing the conference of the World Association of Beet and Cane Growers ( WABCG)
here.
The right policies to boost the sugar industry are necessary as it contributes around 7 per cent
to the total agriculture GDP and around 30 million people are directly or indirectly depend on
this sector, he said.
Barring two key regulations with respect to fixing sugarcane price and sharing of 70 per cent
revenue by sugar firms with farmers, the Rangarajan Committee report has suggested giving
68
freedom to mills to sell sugar in the open market and having a stable export and import
policy
The Food Ministry has moved a cabinet note based on the Rangarajan's report. The proposal
is likely to be discussed at the meeting of the Cabinet Committee on Economic Affairs
( CCEA) next week.
Stating that removal of government controls would improve efficiency in the sector, Anwar
said abolition of licensing requirement for new sugar mills way back in 1998 contributed
significantly to a structural transformation in the industry.
"Delicensing caused installed capacity in sugar sector to grow at almost 7 per cent annually
between 1990-91 and 1997-98. Till 1997-98, sugar cooperatives dominated but by 2011-12,
this changed significantly with private sector contributing largest share of total installed
capacity," he said.
India, the world's second biggest sugar producer, is expected to produce 24.5 million tonnes
of the sweetener in 2012-13 marketing year (October-September).
India's 2013-14 sugar output looks positive: ISO chief (ET 25/3/2013)
Sugar production in India in the next year looks positive despite concerns about drought
situation in some states like Maharashtra, a top official of the International Sugar
Organisation (ISO) said today.
Asked if drought in key sugarcane growing states would impact overall sugar output in India,
London-based ISO Executive Director Peter Baron said, "Drought in some states is a
concern. But we are positive about sugar production next year."
He however did not provide any estimates for sugar production during 2013-14 marketing
year (October-September) in India. Sugar output this year is pegged at 24.5 million tonnes.
Due to drought this year, cane growers in Maharashtra and Karnataka have not yet started
sugarcane planting. Drought in Maharashtra has been so severe that the state government has
ordered saving water for drinking purpose.
Baron was speaking to reporters on the sidelines of a conference organised by the World
Association of Beet and Cane Growers (WABCG).
On sugar decontrol, ISO chief said that he was "hopeful" of sugar decontrol soon. "Quicker
the better as it would send an positive signal to global sugar market," he said.
"India is a very complicated country. Everybody speaks about decontrol but it is not that easy
for the government to take decision as growers and consumers interest need to be taken into
69
account," Baron said.
Speaking separately, National Federation of Cooperative Sugar Factories Ltd ( NFCSFL)
Managing DirectorVinay Kumar said that the country's sugar output in 2013-14 marketing
year could decline to 22-23 million tonnes, as against 24.5-25 million tonnes this year.
"It is too early to say but we see production to fall to 22-23 million tonnes next year because
of drought in some states," Kumar told reporters.
The shortage of water in major parts of cane growing areas has affected the fresh planting in
Maharashtra, he added.
Continuous selling drags sugar (BL 25/3/2013)
Bearish trend in sugar market continued on Monday on desperate selling by producers in
absence of positive cues. Millers offloaded fair – lower quality sugar at Rs 30-40 lower on
Saturday which pulled down naka rates by Rs 10-20 and spot prices by Rs 20-50 a quintal at
Vashi terminal market. Arrivals and local dispatches improved on higher demand for Holi
festival. Jagdish Rawal of B. Bhogilal and Co said: “Local retail demand improved ahead of
Holi festival. But at upper level producers seem to have started desperate offloading at lower
rates which weighed on physical market sentiment. Upcountry buying is lacking since long in
Maharashtra forcing millers to sell the commodity in State-level markets”.
70
XII INPUTS
Subsidy overdues may prompt urea price hike (1/3/2013)
A urea price hike seems inevitable, as the Budget has effectively provided Rs 27,046 crore
toward fertiliser subsidy, which is far from adequate. But, whether the Government will bite
the urea bullet in an election year is worth a watch.
Though the actual budgetary provision is Rs 65,972 crore for 2013-14, the effective subsidy
that would be available to fertiliser companies stands at around Rs 27,046 crore. This is
because the Government, at present, owes about Rs 39,000 crore to fertiliser makers, as the
subsidy for 2012-13 has overshot the budget estimate to such extent.
The overrun in subsidy burden was due to a sharp increase in global prices of potash and
phosphatic fertilisers last year and impact of a weakened rupee, as the country heavily relies
on imports for such nutrients. The delay in subsidy payment has resulted in cash flow
problems for many a fertiliser makers.
The industry believes that an effective lower subsidy for 2013-14 could get exhausted
quickly, sometime in June-July, as was seen last year as companies are saddled with huge
stocks that would be offloaded during the forthcoming kharif season.
UREA PRICES
Recently, the Fertiliser Ministry arranged for a Rs 5,000-crore bank loan to fertiliser
companies and expects to share a major part of the interest burden. There are expectations
that the Government may announce a cut in non-urea fertiliser subsidy as global prices have
softened. Such a move, if implemented, may keep the non-urea prices firm in the season
ahead.
At present, urea is heavily subsidised by the Government and is currently priced at Rs 5,365
a tonne. The price of complex nutrients, such as di-ammonium phosphate (DAP) and NPK
are quoted at Rs 24,000 and Rs 22,000 a tonne, respectively.
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The industry has been demanding an increase in urea prices for quite some time now, as this
will not only help contain the subsidy burden but would also prevent the impact on soil
health. The huge price differential in the price of urea and non-urea complexes has led to the
indiscriminate use of the nutrient for the second year, resulting in imbalanced fertigation (the
application of fertilisers or other water soluble products to the irrigation system).
However, the Government has been dithering on increasing the prices, as urea is a politically
sensitive issue, even as there is pressure on it to reduce subsidies to contain the fiscal deficit.
Pawar asks for status report on farm credit disbursal (ET 6/3/2013)
Agriculture Minister Sharad Pawar today sought a status report on farm credit disbursal with
details like profile of beneficiaries and list of defaulters in the wake of a sharp hike in agri-
credit target to Rs 7 lakh crore.
"What per centage of small and marginal farmers have taken farm loan? Which states are
lagging behind? What is the per centage of defaulters?" Pawar asked an official dealing with
farm credit in the Kharif Conference here.
We need know who is benefitting and who are defaulters, Pawar said and asked for a detailed
status report.
Pawar's directive comes a day after the Comptroller and Auditor General (CAG) finding a
number of shortcomings in implementation of the Rs 52,000-crore farm debt waiver scheme.
In a report tabled in Parliament, CAG has pointed out that thousands of beneficiaries were
not eligible while those eligible were denied the benefits of the scheme.
Giving the minister details on farm loan borrowers, Joint Secretary R K Tiwari said small
and marginal farmers comprise 52 per cent. The coverage can be increased if kisan credit
card is made available to them.
North East and Eastern states are lagging behind in availing farm credit, he added.
In the 2013-14 Budget, the government has proposed to increase the farm credit target to Rs
7,00,000 crore for next fiscal, from Rs 5,75,000 crore for the current fiscal.
Farm loan waiver: PM Manmohan Singh promises stringent action against defaulters
(ET 6/3/2013)
With the opposition targeting the government on alleged irregularities in the farm loan
waiver scheme, Prime Minister Manmohan Singh today promised "stringent possible action"
against defaulters, if any.
The Prime Minister's assurance came in the Rajya Sabha as BJP created uproar over the
alleged "siphoning off" of farmers' money and a "scam" in the scheme in the wake of
the CAG report.
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"The reference is to the CAG report on loan waiver scheme. This is a matter which should be
entrusted to the Public Accounts Committee as per normal practice. If there are any
irregularities, which have been shown, I assure the House that we will take stringent possible
action against the defaulters," Singh said in impromptu comments.
His statement came after BJP leader Ravi Shankar Prasad raised the issue during Zero Hour,
alleging scam in the scheme and his colleagues attacked the government over it.
Unimpressed by the Prime Minister's reply, BJP members trooped into the well forcing
Deputy Chairman P J Kurien to adjourn the House for a brief period.
Earlier, Prasad said the CAG report points out that 34 lakh people who should not have got
the loan waiver benefit actually got it while 24 lakh farmers who deserved it, could not get
it.
"It is a case of clear scam. Bank officials in connivance with the middlemen siphoned off the
money of farmers," Prasad said recalling that the Prime Minister himself had visited
Vidharbha in Maharashtra to launch the scheme.
"It is unfortunate that a scam is happening even in this scheme," Prasad said, adding micro-
financing companies are the actual beneficiaries at the cost of farmers even as incidents of
farmers' suicides are taking place in many states including Maharashtra and Andhra Pradesh.
No misappropriation of funds in farm debt waiver scheme: Sharad Pawar (ET
6/3/2013)
Agriculture Minister Sharad Pawar on Wednesday said there was no "misappropriation" of
funds under the Rs 52,000-crore farm debt waiver scheme and sought a more comprehensive
audit byCAG to get a better picture.
Stating that the sample size taken for auditing was "too small", Pawar said audit of
"significant" number of accounts should be done by Comptroller and Auditor General of
India (CAG).
"Government of India has taken the decision and money has been sent to banks. Accounts
and beneficiary list has been selected by banks under the supervision of RBI and NABARD.
Money has directly been transfered to accounts. Where is the question of misappropriation?"
Pawar told reporters here.
The Minister's comments come in the wake of CAG finding a number of shortcomings in
implementation of the scheme. It pointed out thousands of beneficiaries were not eligible
while those eligible were denied the benefits.
Pawar, however, did not rule out some possibility of exclusion of eligible farmers and
inclusion of non-eligible farmers in the beneficiary list prepared by banks.
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"We have to understand out of 3.7 crore accounts, CAG has taken sample of 90,576
accounts. That means 0.25 per cent accounts have been audited. With such a big scheme
announced throughout India, coming to conclusion with such small figure! I think I should
get more information," Pawar said.
He said the issue should be discussed "when significant number of accounts are audited, that
will give better result."
After receiving the preliminary report of CAG, the Finance Ministry had written to RBI
and NABARD that the number of accounts taken for auditing by CAG was not "sufficient"
and all accounts should be audited as early as possible, he added.
Pawar said banks can recover money from non- eligible farmers and said the Centre will
have to take decision on extending benefits to eligible farmers.
"If suppose those people are not eligible but have got advantage, I am sure banks will recover
that money. There are certain farmers, who are eligible but not got advantage. As on today,
there is no budgetary allocation but we have to apply our mind. We have to take some view
after getting the report."
As global prices fall, Govt may cut subsidy on non-urea fertilizers (BL 24/3/2013)
The Government proposes to slash the subsidy on non-urea fertilisers such as di-ammonium
phosphate (DAP) by 14 per cent and muriate of potash (MoP) by about 19 per cent for 2013-
14, following the decline in global prices of these nutrients.
The Fertiliser Ministry has proposed a subsidy cut of Rs 2,000 a tonne for DAP and Rs 2,700
for MoP for the 2013-14, sources said.
The subsidy on DAP is likely to be pegged at Rs 12,350/tonne for 2013-14 against last year’s
Rs 14,350. Similarly, the subsidy for MoP may be fixed at Rs 11,740 (Rs 14,440).
P & K FERTILISERS
The proposed cut may not hit the maximum retail prices of these complex nutrients as global
prices have softened by 15-20 per cent in recent months. As the country is nearly fully
dependent on the imports of phosphatic (P) and potassic (K) fertilisers either in the form of
finished fertilisers or their raw materials and the subsidy being fixed, its international prices
affect the prices of these nutrients.
On Friday, Minister of State for Fertilisers Srikant Jena hinted at a reduction in subsidy rates
for P&K fertilisers.
“Since the present international prices of P&K fertilisers are comparatively less as compared
to those in last year, the subsidy rates for the year 2013-14 will be fixed accordingly,” Jena
told the Rajya Sabha in a written reply.
74
SUBSIDY FIXING
The subsidy rates are fixed on an annual basis considering factors such as international and
domestic prices of fertilisers, inventory and the exchange rates.
The Cabinet is expected to approve the proposed rates ahead of the new financial year. Such
a move would help the manufacturers to print the maximum retail price on bags and start
bagging the nutrients for despatch ahead of the forthcoming kharif season.
The Government, which implemented the Nutrient Based Subsidy (NBS) policy for P&K
fertilisers since April 2010, has been announcing the subsidy rates before the start ofthe
financial year. The subsidy is to make P&K fertilisers available at a lower price than its
delivered costs and is reimbursed to the fertiliser companies.
BUDGETARY PROVISION
For 2013-14, the Government has made a budgetary provision of Rs 29,427 crore for de-
controlled fertilisers such as DAP and NPK stood, against the revised estimate of Rs 30,576
crore for 2012-13.
While urea is heavily subsidised by the Government and is currently priced at Rs 5,360, the
DAP and MoP prices ruled at Rs 24,000 and Rs 17,000 respectively in the current year.
The huge difference in prices led to imbalance in fertigation, resulting in a build-up of non-
urea fertiliser stocks, estimated at over seven million tonnes.
Recently, some companies such as Indian Potash Ltd have contracted to import about one
million tonnes of MoP for 2013-14.
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XIII OTHER AGRI COMMODITIES/ NEWS
Farm sector gets a booster dose with 22% higher allocation (BL 28/2/2013)
The farm sector has received a major push in the Budget with Finance Minister announcing a
22 per cent increase in allocation to the Agriculture Ministry. Crop diversification, watershed
management, livestock development, market linkages and Green Revolution in Eastern India
will get a further impetus from the higher outlay.
“I propose to allocate Rs 27,049 crore to the Ministry of Agriculture, an increase of 22 per
cent over the revised estimates of the current year. Of this, agricultural research will be
provided Rs 3,415 crore,” said the Finance Minister P. Chidambaram presenting his eighth
budget.
The National Livestock Mission with an outlay of Rs 307 crore will be launched in 2013-14
to attract investment and to enhance productivity taking into account the local-agro climatic
conditions. Further, a sub-mission for increasing the availability of feed and fodder would
also be launched.
CROP DIVERSIFICATION
Chidambaram has allocated Rs 500 crore to start a programme of crop diversification that
would promote technological innovation and encourage farmers to choose crop alternatives.
The scheme mainly targets original green revolution States such as Punjab and Haryana,
which face stagnation in yields and over-exploitation of water resources.
Further, the Finance Minister also hiked allocation to integrated watershed programmed to
Rs 5,387 crore from Rs 3,050 crore, a move that may help small and medium farmers in
drought-prone and ecologically-stressed regions.
PILOT ON NUTRI-FARMS
In a bid to introduce new crop varieties that are rich in micro-nutrients such as iron-rich
bajra, protein-rich maize and zinc-rich wheat, the Finance Minister proposed to start pilot
nutri-farms with an allocation of Rs 200 crore. The Agriculture Ministry is expected to
formulate a scheme in this regard. Further, the pilot scheme to re-plant and rejuvenate
coconut gardens will be expanded to entire state of Kerala.
The National Institute of Biotic Stress Management for addressing plant protection issues
will be established at Raipur, Chhattisgarh. Besides, the Indian Institute of Agricultural Bio-
Technology will be established at Ranchi.
Continuing with the interest subvention programme for short-term loan, the Finance Minister
expanded the scheme to crop loans borrowed from private sector scheduled commercial
bank. Also, the agricultural credit target has been hiked to Rs 7 lakh crore for 2013-14 over
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previous year’s Rs 5.75 lakh crore. Chidambaram also said Rs 10,000 crore has been set
apart to meet the incremental costs of the proposed National Food Security Bill.
MARKET LINKAGES
Registered farmer producer organisations (FPO) will get a matching equity grant of up to Rs
10 lakh per FPO to enable them to leverage working capital from financial institutions.
Further, a Credit Guarantee Fund will also be created in the Small Farmers’ Agri Business
Corporation with an initial corpus of Rs 100 crore.
Further fillip to farm sector (BL 28/2/2013)
With indicators such as average annual growth, total foodgrain production and agriculture
exports looking up, I believe that the appropriation in the current budget will provide further
fillip to the sector in the future.
Overall the budget 2013-14 looks positive for the agriculture sector and the Finance Minister
has provided good financial stimulus which will contribute to the development of the sector
by improving infrastructure and provide a push to the food processing sector.
The outlay of Ministry of Agriculture has also been raised to 22 per cent which shows that
the Government is still optimistic about the future of this vital sector of the economy and it
only comes to show that the importance of agriculture in our economy has not diminishing
contrary to the views of some. It’s good to see that Agricultural credit has increased from Rs
5,75,000 crore to Rs 7,00,000 crore. The Finance Minister has taken a positive step by
continuing the the green revolution to eastern India and supporting the Eastern States with an
allocation of Rs 1,000 crore. But I would like to see the government to extend the same to the
other regions of the country so as to improve the degrading condition of agriculture in
general and soil in particular in these areas.It was good to notice the appropriation for the
Rashtriya Krishi Vikas Yojana and the National Food Security Mission. Another allocation
of Rs 500 crore for crop diversification in the original green revolution States is another
positive step, this to my mind is the need of the hour as far as improving the overall yield is
concerned and I hope that the government will take it seriously and extend this to the entire
country.
With drought-like conditions in many parts of the country, the allocation of Rs 5,387 crore
for the integrated watershed programme will help ameliorate conditions in such areas. I am
also happy to see that Nabard has been provided stimulus to set up warehouses and godowns
which would certainly add to food production and food availability.
Another welcome step is the announcement of The National Institute of Biotic Stress
Management for addressing plant protection issues which will be established at Raipur,
Chhattisgarh and The Indian Institute of Agricultural Bio-technology will be established at
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Ranchi, Jharkhand which will serve as a centre of excellence in agricultural bio-technology.
This to mind will fill the knowledge gap in the agriculture sector and also attract young and
energetic minds in the agriculture research. Overall the budget is positive for the agriculture
sector and sends out all the positive signals to the investors at large.
Economic Survey 2013: India's global ranking for agricultural-exports improves to 10th
(ET 1.03.12)
India has improved its position in agricultural and food exports to 10th globally, helped by
policy impetus, the Economic Survey said today.
"In recent years, the policy impetus by the government has provided much required stability
to agri exports," said the Survey for 2012-13.
However, the document, tabled in Parliament, did not state the earlier ranking.
It said that as per World Trade Organization data, global exports and imports of agricultural
and food products in 2011 stood at USD 1.66 trillion and USD 1.82 trillion respectively.
India's share in this is 2.07 per cent and 1.24 per cent respectively.
In view of record domestic foodgrains production, the government had lifted the ban on
export of rice and wheat in September 2011 from private trade. Later in mid-2012, the
government allowed export of wheat from its own godowns.
"Though these measures are in the right direction, a consistent long-term trade policy with
tariff in a narrow band may be required for India to acquire international presence in
commodities wherein it has comparative advantage," the Survey said.
In view of sufficient stocks of foodgrains in the central pool, the government has allowed
exports of 4.5 million tonne of wheat from the central pool stock of the FCI through central
public-sector undertakings and placed export of wheat and rice under open general licence (
OGL).
Permission to export wheat products up to 6.50 lakh tonne through customs Electronic Data
Interchange ports on private account has also been extended up to 31 March 2013.
Last year, the country had surpassed Thailand to become world's top rice exporter.
The domestic foodgrains production stood at a record 259.32 million tonne in 2011-12.
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14.08 million Job losses in farm sector in 5 years to FY'10 (ET 5/3/2013)
As many as 14.08 million jobs were lost in the five-year period ended in 2009-10 in the
agriculture sector which engages almost 60 per cent of the workforce in the country.
The job losses in the manufacturing sector during the five year period from 2004-05 to 2009-
10 was 5.03 million as per the draft 12th Five-Year Plan approved by the country's apex
policy making body National Development Council (NDC) in December last year.
According to the data analysed in document, employment in the agriculture sector in absolute
terms was 237.67 million in 1999-2000 which increased to 258.93 million in 2004-05 and
then fell to 244.85 million in 2009-10.
Similarly the workforce engaged in manufacturing sector was 44.05 million in 1999-2000,
which increased to 55.77 million in 2004-05 and then came down to 50.74 million in 2009-
10.
However, the employment in non-manufacturing sector increased from 20.84 million in
1999-2000 to 29.96 million and 48.28 million in 2004-05 and 2009-10 respectively.
The workforce in electricity, gas and water supply also saw a decline from 1.30 million in
2004-05 to 1.25 million in 2009-10. The other sector broadly in services sector saw a surge in
employment.
The overall employment in the country has jumped from 396.76 million in 1999-2000 and
457.46 million in 2004-05 and it was 460.22 million in 2009-10.
The document has suggested a host of measures including improving the outreach of the skill
development, putting in place institutional mechanism for skill development, skill loans for
poor students and others to improve abilities of the country's workforce and their
employability.
Distressed Andhra Pradesh farmers selling organs to escape debt trap (ET 7/3/2013)
Almost five years after the UPA government allocated the lion's share of
its Rs 52,000 crore farm loan waiver scheme to Andhra Pradesh, reports are emerging from
the state that distressed farmers are selling their organs to come out of the agricultural debt
trap.
Three states - Andhra Pradesh, UP and Maharashtra - had got almost 57% of the Rs 52,000
crore package meant for all 35 states and Union Territories. Disbursal in Andhra Pradesh was
Rs 11,000 crore while it was Rs 9,095 crore in UP and Rs 8,900 crore in Maharashtra.
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The farm loan waiver has been cited as one of the main vote-catchers for the Congress in the
2009 LokSabhapolls and this was vindicated in the party's handsome performance in the
three states with the largest allocations. While Congress bagged 31 seats in Andhra, it got 22
in UP and 16 in Maharashtra, a performance which facilitated formation of the
second UPA government at the Centre.
In Andhra Pradesh, around 77 lakh farmers cornered more than Rs 11,000 crore, almost 21%
of the total farm loan waiver package. But as the Comptroller and Auditor General (CAG)
report reveals, a huge number of ineligible farmers were allowed waiver while many
marginal and small farmers were denied the benefit and they continued to remain in a debt
trap.
CAG detected tampering with loan records, alteration in ledgers and changing records where
non-agricultural loans were converted into agricultural loans.
In one such instance, the auditor pointed out how the AP Grameen Bank in Ballikurava had
altered land holdings of at least 17 loanees so as to alter their category and make them
eligible for full waiver in the marginal farmer category.
These irregularities were noticed not just in Andhra Pradesh but across several states were
sample study was carried out by the auditor.
The CAG's sample study was carried out over 715 bank branches in 92 districts of 25 states
involving more than 80,000 farmers' loan accounts. The disbursement to these farmers
amounted to Rs 330 crore.
In Andhra Pradesh, scrutiny of 3,200 loan accounts revealed that in at least 132 cases,
ineligible benefits were allowed, highest among all states bar J&K where the sample study
found ineligible benefits were allowed to 153 farmers. In close to 100 cases in Andhra
Pradesh, the CAG found benefits extended to farmers on loans which were not disbursed in
the first place.
Funds no problem for Food Security Act, MNREGA: PC to Cong MPs (ET 8/3/2013)
Amid concerns in Congress, Finance Minister P Chidambaram today assured party MPs that
funds will not be a constraint in implementing the ambitious Food Security Act.
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Chidambaram also ruled out any roll back of the proposal in the budget to introduce a law
which will empower officials to arrest service tax evaders even as some party MPs in the
meeting felt there was a need to have a re-look at it.
The Finance Minister was briefing 100-odd party MPs from Lok Sabha and Rajya Sabha on
the Union Budget, a preparatory exercise for party members before the discussion on the
budget in Parliament.
The name of Narendra Modi also cropped up during the one- and-half-hour interaction over
the claims of the Gujarat Chief Minister on the issue of development. Some said his
develoment claims are not right.
Chidambaram told the MPs during the interaction that despite the financial constraints before
the government in a scenario of global economic slow-down, the government has not
compromised anywehere so far in funding of flagship schems like MNREGA.
He said "funds would not be a problem" as the MPs wondered why only a sum of Rs 10,000
crores have been earmarked for the food scheme in the budget.
As part of the government's efforts to kickstart the growth engine, Chidambaram told
concerned ministries to get early approvals for their plans so that they could go cracking in
the year ahead.
Per capita availability of foodgrains up 6% in 2011: Govt (BL 8/3/2013)
The per capita availability of foodgrains increased to 462.9 gm per day in 2011 from 437.1
gm per day in the previous year, Parliament was informed today.
“The per capita net availability of foodgrains was 444 gm per day in 2009, 437.1 gm per day
in 2010 and 462.9 gm per day in 2011,” Agriculture Minister Sharad Pawar said in a written
reply in the Rajya Sabha.
The production of foodgrains has increased to a record 259.32 million tonnes in the 2011-12
crop year (July-June) from 244.49 million tonnes in the previous year.
In the 2009-10 crop year, foodgrains production stood at 218.11 million tonnes. Rice, wheat,
coarse cereals and pulses fall under the foodgrains category.
Subsidy on rice and wheat under TPDS touches Rs 80,491 cr (BL 11/3/2013)
Government’s subsidy bill for providing cheap rice and wheat to the poor and below poverty
line (BPL) families via ration shops touched Rs 80,491 crore so far in the current fiscal,
Parliament was informed today.
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The government’s subsidy burden in providing rice and wheat through the targeted public
distribution system (TPDS) was Rs 74,903 crore in 2011-12 fiscal, Food Minister K V
Thomas said in a written reply in Rajya Sabha.
The subsidy on rice was Rs 36,540 crore as of March 6, 2013, while, that on wheat was Rs
43,951 crore.
In the previous fiscal, subsidy on rice stood at Rs 49,041 crore and that on wheat was Rs
25,862 crore.
In a separate query, the minister told the Upper House that TPDS is operated under the joint
responsibility of the Union and State governments.
The responsibility of allocation of foodgrain with the State/UTs, issuance of ration cards and
the supervision and monitoring of fair price shops rests with the states, he added.
Cabinet may discuss revised Food Security Bill, sugar decontrol proposal this week(BL
11/3/2013)
The Government is likely to consider this week major amendments to the Food Security Bill
and also discuss a proposal on sugar decontrol.
“The changes proposed to Food Bill have been circulated to the concerned ministry for
consultation. The revised Bill may come before the Cabinet this week,” Food Minister K.V.
Thomas told reporters here today.
The amendments to the Bill have been suggested after taking into account the
recommendations of the Parliamentary Standing Committee, he added.
In the original Bill, introduced in the Lok Sabha in December 2011, the Government had
proposed giving 7 kg of wheat (Rs 2/kg) and rice (Rs 3/kg) per month per person to ‘priority
households’, while at least 3 kg of foodgrains at half of the government fixed support price
was proposed for the ‘general’ households.
Amendments to Food Bill
According to sources, more than 55 amendments have been proposed to the Bill. Major
changes include: doing away with priority and general classifications of beneficiaries and
provide uniform allocation of 5 kg foodgrains (per person) at fixed rates to 67-70 per cent of
the country’s population.
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Protection to 2.43 crore poorest of poor families under the Antodaya Anna Yojana scheme by
continuing the supply of 35 kg foodgrains per month per family and nutritional support to
pregnant women without limitation are among other changes proposed in the Bill.
Sugar decontrol
On sugar decontrol, Thomas said that the proposal on removal of levy sugar obligation may
come before the Cabinet Committee on Economic Affairs (CCEA) this week.
Under the levy sugar system, mills are required to sell 10 per cent of their output to the
Centre at cheaper rates to run ration shops, costing Rs 3,000 crore to the industry annually.
The proposal is that once this obligation is removed, the Government would buy sugar from
the open market and continue to sell at a subsidised price through ration shops.
The financial burden would be offset by either raising the excise duty on sugar or tweaking
export and import duties on the sweetener, the Minister added.
In October 2012, the expert panel headed by PMEAC Chairman C. Rangarajan had
recommended immediate removal of two major controls — regulated release mechanism and
levy sugar obligation.
Centre to set up autonomous body to tackle risk to farms from alien pests, weeds (BL
11/3/2013)
To tackle the increased risk to agriculture from ‘exotic’ foreign pests and weeds, the
Government proposes to integrate plant and animal quarantine services by creating an
autonomous authority.
The proposed move would ensure a tighter quarantine regime, an official statement said.
Agriculture Minister Sharad Pawar on Monday introduced a Bill in the Lok Sabha that seeks
to set up an autonomous authority – with adequate powers – for prevention, control,
eradication and management of pests and diseases of plants and animals and unwanted
organisms for ensuring agri bio-security.
The inflow of pests and diseases of plants and animals into countries through imports is
considered one of the biggest threats to diversity, leading to huge economic losses.
For example, weeds such as Parthenium, Phalaris minor and Lanatana camara have already
got established in the country.
Besides, the recent emergence and spread of transboundary diseases, such as avian influenza
and the Ug-99, wheat stem rust fungus pose a threat not only to animal and plant safety, but
human beings, too.
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The Agricultural Bio-security Bill 2013 provides for modernising the legal framework to
regulate safe movement of plants and animals within the country and international trade.
SAFE MOVEMENT
The Bill, when enacted into law, would also help India meet the international obligations for
facilitating imports and exports of plants, plant products, animals, animal products, aquatic
organisms and regulation of agriculturally important micro organisms.
The proposed authority - on the lines of the Food Safety and Standards Authority of India,
would help administer agri-bio-security. When implemented, India would join the league of
Australia, New Zealand and the US, which follow the integrated bio-security model.
The authority’s mandate will cover the four sectors of agricultural bio-security, - plant health,
animal health, living aquatic resources (fisheries) and agriculturally important micro-
organisms.
The proposed authority would also improve safety, efficiency, transparency and compliance
of quarantine and pest management regulations and respond swiftly to contain emergent bio-
security problems.
Sharad Pawar favours field trials of GM crops with strict safety ( ET 11/3/2013)
Agriculture Minister SharadPawar today said that agriculture scientists should be allowed to
conduct field trials of genetically modified (GM) crops by adopting strict safety measures.
In August, the Parliamentary Standing Committee on Agriculture, headed by Basudeb
Acharia, had recommended to the Government to stop all open-field trials of transgenic crops
until it develops a better system of monitoring and oversight.
"I am of the considered opinion that the distinction for-GM and anti-GM is unnecessary. We
should not analyse the scientific issues on non-scientific parameters.
"Let the science tell us what is good and what is not. And for that we must allow our
scientists to conduct the trials by observing strictest possible safety measures," Pawar said at
a conference here.
Stating that biotechnological tools possess enough potential to transform agriculture and
agro-based industry, he said the country need to ally fear of relevance and safety of such
technology.
"With the sound regulatory and testing systems, India needs to take giant steps to alley the
fear of few on relevance and safety of such technologies," Pawar said.
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The minister hoped that scientists will get full freedom for their research to ensure higher and
sustainable crop productivity, better environment and remunerative agriculture.
"It is projected that by 2030 India will require a minimum of 304 million tonnes of
foodgrains, 175 million tonnes of vegetables, 96 million tonnes of fruits, 170 million tonnes
of milk and 21 million tonnes of meat, eggs and fish.
"The proposed food security Act would increase the demand of foodgrains significantly. We
need to gear up to expand the supply side. We have to enshrine the country's food security on
domestic production and not on imports," he observed.
Pawar said the future growth in agriculture has to come from acceleration in the rate of
technological change and sustainable intensification of production systems.
"Modern science such as biotechnology, nanotechnology, remote sensing offer opportunities
to enhance genetic potential of crops, improve input-use efficiency, reduce production and
transaction costs and improve sustainable use of natural resources," he added.
Speaking on the same occasion, Minister of State for Human Resource Development Shashi
Tharoor said Indian biotech industry currently employs 50000 people. To meet the growing
demand, we need to focus on training more professionals.
"I urge the industry to partner with the government to devise right curriculum so that
graduates are ready to meet the industry demand. We need to see how biotechnology
education system evolved in Karnataka can be emulated in other states," Tharoor said.
Efforts to increase export of agricultural commodities: Govt (ET 11/3/2013)
Government today said it is making all efforts to increase export of agricultural commodities,
including wheat, rice, vegetables, meat and marine products, and India has emerged as the
second highest exporter in this sector.
"The picture being painted that there has been a fall in export of agricultural products is
incorrect. Processed agricultural products, vegetables and fruits are being exported as part of
India's foreign trade policy,"Commerce and Industry Minister Anand Sharma told the Lok
Sabha during Question Hour.
He emphasised that government is giving a 5 per cent export incentive to this sector. "It is
under Open General Licence and there are no barriers," Sharma said.
The minister claimed that government is making all efforts to increase export of agricultural
products and India is now the second highest exporter in this sector.
He, however, rued that 35 per cent of the agri-products still go waste which is a very high
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figure and hoped that with FDI coming in, the foreign players will open up more cold
storages and processing industries.
Sharma said other products being exported include wheat, non-basmati rice (where India is
the highest exporter in the world), bovine meat and marine products. He said all steps are
being taken to get good remuneration for the farmers.
He admitted that there is shortage of edible oil and pulses and these are being imported.
"About 8-9 million tonnes of edible oil and 3-4 million tonnes of pulses are being imported,"
he said.
India also imports palm oil which is sold at PDS shops at subsidised rate.
India's March 1 grains stocks substantially higher than targets: Govt ( ET 12/3/2013)
India's wheat stocks at government warehouses on March 1 were 27.1 million tonnes, more
than three times the official target of 8.2 million tonnes for the quarter ending March 31, a
government statement said on Tuesday.
Rice inventory for the same date was 35.8 million tonnes against a target of 11.8 million
tonnes.
Bumper harvests of rice and wheat since 2007 have swelled supplies, leading to a shortage of
space at government-run warehouses. Mounds of rice and wheat rotting in the open has led to
criticism of the government in a country of hundreds of millions of poor, malnourished
people.
To get rid of some of the surplus stocks, the government has allowed private traders to export
wheat and non-basmati rice. The government has also permitted state-run trading companies
to export up to 4.5 million tonnes of wheat exports from its own warehouses.
On Thursday, India allowed private traders to export an extra 5 million tonnes from
government warehouses.
The government buys grains from farmers for programmes that try to ensure cheaper food for
the poor and to meet emergencies.
Since 2009 the government has also been keeping an additional 3 million tonnes of wheat
and 2 million tonnes of rice as strategic reserves over and above the monthly stocks.
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Foodgrain output may dip 3.5% to 250 MT in FY13 (BL 17/3/2013)
The overall food grains production is expected to dip by 3.5 per cent to 250.1 million tonnes
(MT) in 2012-13 due to estimated fall in kharif production, following weak monsoon,
economic think tank CMIE has said.
“The food grain production is estimated to fall by 3.5 per cent to 250.1 MT in FY13.
Irregular monsoon rainfall in 2012 had taken a toll on kharif cultivation and productivity.
The decline in production is estimated in food grains, oilseeds, sugarcane and fibres,” Centre
for Monitoring Indian Economy (CMIE) said in its monthly report.
Rabi cultivation has picked up pace and is reported to be marginally higher than last year,
however, it has failed to compensate for kharif losses. The acreage of rabi crops grew by 0.2
per cent to 630 lakh hectares, as of March 1, 2013.
Except rice and wheat, cultivation of major rabi crops grew, compared to last year, CMIE
said. Cultivation of wheat declined marginally by 0.1 per cent to 298.4 lakh hectares as of
March 1. Rice cultivation during rabi has declined by 11.5 per cent to 28.9 lakh hectares so
far.
The Agriculture Ministry’s second advance estimates indicate a 2.9 per cent growth in pulses
production in FY’13.
“Rabi cultivation of pulses rose marginally by 0.8 per cent to 151.7 lakh hectares. Sowing of
gram grew considerably by 5.6 per cent to 95.2 lakh hectares,” it said quoting the Agriculture
Ministry’s second advance estimates.
Similarly, coarse grains area grew by 5.4 per cent to 63.8 lakh hectares by March 1, however,
an estimated fall in kharif output will offset the growth in the rabi season.
The overall coarse grains production is likely to dip by 8.5 per cent to 38.5 MT, it said.
Among the non-food crops, sugarcane is likely to be the worst affected in 2012-13. CMIE
said according to the second advance estimates, sugarcane output is expected to decline by
7.3 per cent to 334.5 MT in FY’13.
Production of major oilseeds is likely to dip by 1.1 per cent to 29.5 MT this fiscal.
According to the Agriculture Ministry, the production of groundnuts, castor and sesame
would fall because of lower kharif cultivation. However, rapeseed and soybean production is
expected to increase by 11.5 per cent to 7.4 MT.
First-ever special agriculture Budget to be presented in AP tomorrow (ET 17/3/2013)
The first-ever exclusive agriculture Budget in Andhra Pradesh, in addition to the general
Budget, would be presented in the Assembly tomorrow.
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State Agriculture Minister Kanna Laxminarayana would present the agri Budget soon after
the general Budget is read out by Finance Minister A Ramanarayana Reddy.
The farm sector budget would cover allocations for agriculture and eight allied sectors
including horticulture, animal husbandry, fisheries, marketing, cooperatives, sugar, water
supply and food processing.
According to Laxminarayana, the special agriculture budget would herald a new era in the
state's agri sector.
It would ensure better coordination among officials of various departments and instill
confidence among agriculturists with various steps for their benefits, he said.
A massive exercise preceded the presentation of the agriculture Budget.
As per the idea of Chief Minister N Kiran Kumar Reddy, a team led by Laxminarayana
visited neighbouring Karnataka and studied the concept of agriculture Budget being made
there.
Agriculture growth declined in Maharashtra: Economic Survey (ET 19/3/2013)
The annual economic survey, tabled in theMaharashtra Legislature today ahead of the
presentation of State budget for 2013-14 tomorrow, reveals a decline in agriculture growth in
the state.
"The agriculture sector growth has declined by 1.4 per cent, the growth of agriculture and
allied sectors has declined by 2.1 per cent. The industry sector is expected to grow at 7 per
cent, while the services sector is expected to grow by 8.5 per cent," it said.
Production of food grains in 2012-13 is expected to fall by 18 per cent with production of
104.39 lakh tonnes (LT) as against 127.30 LT during the previous year, it said.
The overall production of foodgrains is expected to reduce drastically during the year, it
said.
"Due to the low intensity and deficit monsoon in some parts of western Maharashtra,
Aurangabad and Nashik divisions, the sowing of major kharif crops was delayed," it said.
"Low moisture conditions and erratic rainfall in September and October has resulted in
reduction of area under Rabi crops," the survey said.
The Gross State Domestic Product ( GSDP) at constant (2004-05) prices, as per advanced
estimates, is expected to grow by 7.1 per cent during 2012-13, the survey said.
Between August 1991 and March 2012, as many as 4,246 FDI projects amounting to Rs
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97,799 crore were approved in the state, of which 45 per cent were commissioned and 10 per
cent are under execution, it said.
Paddy, wheat productivity lower than China ( ET 22/3/2013)
India's per hectare productivity of major crops like paddy, wheat, coarse grains and pulses is
much lower than China, but little higher when it comes to oil crops and sugarcane,
Parliament was informed today.
India produced 3,590 kg paddy in a hectare against 6,686 kg by China in 2011, Minister of
State forAgriculture and Food Processing Industries Tariq Anwar said in a written reply to
the Rajya Sabha.
India's productivity of the major crop is also lower when compared with other neighbouring
countries such as Bangladesh (4,219 kg) and Myanmar (4,081 kg).
India's per hectare yield of wheat is also lower by a whopping 1,661 kg per hectare compared
to China's 4,838 kg, the Minister said quoting Food and Agriculture Organisation (FAO).
Productivity of coarse grains and pulses in India stood at 1,591 kg and 699 kg compared to
China's 5,470 kg and 1,533 kg, respectively.
In fact, India's per hectare production of pulses is the lowest compared to its six neighbours -
Bangladesh, Bhutan, China, Myanmar, Nepal and Sri Lanka. However, it is higher than
Pakistan where 517 kg of pulses was produced in 2011 in a hectare.
Meanwhile, India stands tall over all its neighbours, including China in per hectare oil crops
and sugarcane productivity at 1,133 kg and 71,668 kg against China's 619 kg and 66,519 kg,
respectively.
Anwar said there was no slowdown of agricultural research activity in India with 99
institutes, five deemed universities and 79 All India Coordinated Research projects (AICRPs)
of Indian Council of Agricultural Research (ICAR) engaged in conducting research to cater
to the needs of the farmers across the country.
"During the last five years (2008-12), 645 high-yielding crop varieties/hybrids that have fair
degree of tolerance to biotic and abiotic stresses have been released," he said.
‘Food will be last in chain of schemes for direct transfer’ (BL 25/3/2013)
Food Security Bill will be passed in current session, says K.V. Thomas
Food items will be the last to be brought under the Direct Cash Transfer scheme, said K.V.
Thomas, Union Minister for State for Consumer Affairs, Food and Public Distribution.
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For now, only various pension and scholarship schemes are under the cash transfer scheme
implemented in a pilot project in select villages. Later, the proposal is to include LPG and
kerosene.
Addressing a group of journalists of The Hinduand Business Line today, he said there are a
lot of issues to be ironed out before food items are brought into the cash transfer system. The
entire system, he said, needs to be cleaned up as there are a lot of lacunae.
Dealers in the system are not getting adequate commission and leakage needs to be plugged.
“We are writing to State Governments to give a better commission to dealers, and convince
the cooperative movement, local bodies or women self help groups as much as possible to
actively participate in the system,” he said.
MODERNISING DISTRIBUTION
There is also a crying need to modernise the distribution system, sort out issues such as
storage and transportation of food, weed out bogus cards, make the system reasonably
foolproof, and bring at least 90 per cent of the population under financial inclusion. Only
then will it be possible to effect direct benefit transfer for food, said the Minister. “This will
take a while,” he added.
To dispel any apprehension that once the cash transfer system is introduced the Government
may not procure from farmers, he said the Government will continue to do so. Farmers will
get a minimum support price and the food will be distributed through the PDS, he asserted.
Talking about the Food Security Bill, Thomas said he was confident that the amended Bill
will be passed during the current session of Parliament. On the practicality of food security,
he said, “Though a big challenge, we can do it.”
According to him, the Government’s subsidy commitment for the present targeted public
distribution system is Rs 1 lakh crore. However, going by the revised estimates (according to
the 2010 Census), it will come to around Rs 1.35 lakh crore – including midday meals and
other such schemes.
The Government will have to procure 62-63 million tonnes of foodgrains. This will make at
least 67 per cent of the population (80-82 crore people) legally entitled for food.
“This won’t be a difficult task, as there will not be any major financial problem,” he said.
According to the projection given by the Ministry of Agriculture, the Government has to
procure 82 million tonnes of foodgrains every year till 2040.
“Our production is to the tune of 223 million tonnes. We are already exporting some. If we
have surplus to export, why not give it to our people,” he said.
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To a question on Justice Srikrishna’s recommendation for a unified regulator by including
the functions of the Forward Markets Commission, he said that his Ministry was studying the
issue.
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XIV AGRICULTURAL COMMODITY PRICES
Private fair price shops phase-out should be done carefully: Supreme Court
(ET 4/3/2013)
The Supreme Court today asked the government to proceed cautiously in the gradual phase-
out of the existing model of private fair price shops so that no gap is created in supply of
food grains under public distribution system.
The apex court favoured the idea of doing away with private fair price shops to make food
grain distribution in sync with the recommendations of the National Food Security
Bill (NFSB) till it becomes a law.
"We are hearing about the gradual phasing out of private fair price shop. However, there
should not be crisis in supply of food grains. The substitute should not be worse than the
existing one," a bench comprising justices T S Thakur and Fakkir M Kalifulla said.
The remarks were made by the bench during the perusal of an affidavit placed by Attorney
General G E Vahanvati in which there were 10 suggestions by the Centre based on the
recommendations of the Justice D P Wadhwa Committee which had given detailed report on
the ills and remedial measures to be adopted for the public distribution system (PDS).
Senior advocate Colin Gonsalves, appearing for NGO People's Union of Civil
Liberty (PUCL), submitted that the affidavit has not addressed the issue of Wadhwa
Committee report which has called for keeping away politicians as members in the vigilance
committee for the implementation of PDS.
Vahanvati agreed with him and said, "We have missed it and we will look into it."
The bench asked Gonsalves to go through the government's affidavit and come out with other
suggestions which were required to be followed by the state governments and union
territories in the implementation of the PDS.
Food inflation set to ease as pulses turn cheaper by 20% (ET 5/3/2013)
The price of pulses has dropped up to 20% in the wholesale market after rising rapidly for
months, and is expected to remain bearish, calming concerns of food inflation that has been a
key obstacle in reducing interest rates. India is the world's largest producer, consumer and
importer of pulses, a key source of protein in vegetarian diet.
According to the Indian Institute of Pulses Research, Kanpur, 17 million tonne of pulses are
grown on 24 million hectare, but demand far exceeds supply, leading to imports of 3 million
tonne from Australia, China, Canada, Africa and other regions. Prices are expected to remain
bearish with the onset of harvesting of tur (pigeon pea), urad (black gram) and chana in the
country.
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Wholesale traders say prices have dropped sharply since December but retailers were holding
on to huge margins. "It is only in weekly sales announcements of big retailers that you see
prices slashed for pulses.
It happens as big retailers are buying in bulk and doing inhouse packing. So they are able to
pass the benefit to consumer, which is not the case with the neighbourhoodkirana store," said
an industry person who feels strict regulation by government agencies is necessary.
Imported chana price, which was quoted at Rs4,250 a quintal in December, is now selling
at Rs3,275 a quintal.
Similarly, yellow peas (matar) prices remained stable at Rs2,500 a quintal. There was a slight
5% upward movement for tur which was currently quoted at Rs4,100 a quintal. Retail chana
dal, masur dal and tur dal prices are still ruling at Rs80-90 a kg.
Rajma, the king of pulses, remained firm at Rs120 a kg with new contracts from China for
March delivery being signed at Rs60-90 a kg. Edible oil major Adani, which sells pulses
under the Jubilee brand name, has reduced prices by 50 paise to Rs1.50 a kg across chana,
moong, masur and tur dal. These constitute 80% of the total pulses consumed in the country.
"Pulses prices will further fall as harvesting progresses in the coming months," said Angshu
Mallick, COO, Adani Wilmar. He added that retailers were not quick to pass on the benefit to
the consumer as they were not revising the MRP when prices firmed. "Pulses prices have
remained volatile owing to the changing pattern of import and local harvest," he said. The
expected arrival of vessels carrying yellow peas from Canada has mellowed down the
market.
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Pulses importer PradeepJindal of Jindal Overseas Corporation at
Delhi's Naya Bazaar mandi said buying by retailers was slow as a huge harvest was expected
for chana and imported yellow peas. Reports of crop failure in Uttar Pradesh
and Madhya Pradesh were not worrying the trader who annually imports around
one lakhtonneof pulses.
"Indians are very price-conscious and quickly shift to a pulse which is cheaper. There are so
many options," said Jindal. With the advent of pulses procurement under the minimum
support price programme by government agencies, prices should remain stable. Across nine
locations in Maharashtra, Gujarat andRajasthan, the National Spot Exchange
Limited (NSEL) has started procuring tur, urad and chana on behalf of Small Farmers Agri-
business Consortium. By next week, the agency will enter Andhra Pradesh, MadhyaPradesh.
For the first time, MSP operation will be carried out in Jharkhand. "There is no major distress
sale and we see prices stable with a good crop," said Anjani Sinha, CEO, NSEL. The MSP
for the 2013-14 marketing season for moong has been kept at Rs4,400 a quintal, for
uradRs4,300 a quintal, tur/arhar atRs3,850 a quintal, masoor at Rs2,900 a quintal and bengal
gram atRs3,000 per quintal.
National Agricultural Cooperative Marketing Federation of India (Nafed) is also set to
undertake the MSP operation engaging state procurement agencies. "Current arrivals are
slow and will pick up in a week. Certain pulses like urad are being quoted below MSP
whereas tur dal is being quoted above MSP owing to good quality and low availability," said
a Nafed official. The procurement agency will very shortly cover local gajjar variety from
Uttar Pradesh, Bihar and Jharkand to ensure remunerative prices to farmers.
Granaries full, but cereal prices up 20% (ET 16/3/2016)
The Centre is blaming state governments for a near 20% rise in cereal prices despite
overflowinggranaries that have record stocks, and suspects that hoarding and high state levies
are causing the spike.
The latest wholesale price inflation data showed that the price increase in this segment was
estimated at over 19%. According to the consumer price index, inflation is of the order of
17%. Last month, Food Corporation of India godowns had over 66 million tonnes of
foodgrains despite exports being made more liberal to offload stocks.
Simple economics would tell you that such large stocks, more than double the buffer norms,
would result in prices crashing in the market.
"There is an unexplained increase in the price of cereals. And, if we have
large stocks available and government has been on a regular basis releasing the stocks in the
market, then what is the reason for this increase? Obviously, there is at some level a lot of
hoarding taking place, which is squarely in the jurisdiction of the state governments,"
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economic affairs secretary Arvind Mayaram told TOI.
Although he did not elaborate further, he said states need to ensure that there were no
bottlenecks in the last mile connectivity between the consumer and the distribution system.
A top agriculture ministry official too blamed states but for a different reason, saying states
such as Punjab were responsible for the rise as well since they levied over 10% tax on grains.
"You can't levy more than 5% tax on food. It does not make sense," he added.
Experts said the excess stock held by Food Corporation of India (FCI) was a key reason
behind the sharp spike in cereal prices.
"The fact is holding this kind of huge stocks is equal to hoarding. Excessive procurement and
too little release of stocks will only give rise to very high prices," said Pronob Sen, chairman
of the National Statistical Commission.
"State governments have very little role as the stocks are held by the Food Corporation of
India (FCI). There is complete mismanagement of the open market operations. The way out
is more aggressive open market operations by the FCI," Sen said.
Madan Sabnavis, economist at Care ratings, said the increase in minimum support price,
which for some commodities has doubled in five years, was also to blame along with the
"hoarding by FCI".
A part of the blame also lies with the way the food ministry and state governments have
managed the situation resulting in the private sector being driven out of the market. States
such as Madhya Pradesh and Rajasthan are offering bonus over the minimum support price
that pushes up the cost further. "The entire grain trade has been nationalized by the high
minimum support price and the inefficient management is causing this," the agriculture
ministry official said.
Last month, FCI had 35 million tonnes of rice and over 30 tonnes of wheat in its warehouses
and with procurement for wheat set to begin, the stocks are projected to hit an all-time high
of 92-93 million tonnes by the end of June, beating last year's record of 82 million tonnes.
Rice gains; egg, wheat prices decline (BL 17/3/2013)
Some buying support coupled with limited arrivals in the market kept rice prices in positive
territory while reduced offtake pulled dara wheat and poultry items down last week.
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WHEAT
In the physical market, after witnessing some uptrend in recent past, dara wheat prices fell up
to Rs 10 a quintal, on account of reduced offtake and better supplies in the market. Dara
wheat ruled at Rs 1,545-1,550 a quintal while flour ruled firm at Rs 1,760-1,770 .
Wheat prices may rule around current levels for the next couple of days and then, it may
decrease further because the new crop is round the corner. Over the last couple of months,
FCI has started giving stocks to BPL families in the first couple of days of every month,
earlier stocks used to come by the end of second week of every month. Early arrivals of the
BPL stocks may also put some pressure on the market.
On the National Commodity and Derivatives Exchange, wheat futures and spot market traded
in a tight range last week. Wheat for March and April contracts ended up with a negative
note following lack of buying interest and increased supplies in the physical market.
Similarly, spot market remained bearish and went down by Rs 10 last week.
RICE
Inadequate supplies and rising domestic demand pushed up aromatic and non basmati rice
prices by Rs 50-300 a quintal last week, which were at their highest levels of the season.
Active participation by bulk buyers to meet the ongoing demand and restricted arrivals in the
market are giving good support to the market.
However, traders expect that the market may not sustain the current momentum for long and
may rule sideways in near future. Market may witness some good buying in April, said
market experts.
POULTRY
Higher supplies in the market and decline in buying support dragged poultry items down last
week.
Egg prices decreased by 40 paise over the last one week and settled at Rs 2.53, broiler eased
by Rs 5 to Rs 80 a kg, while chick sold at Rs 17, down Rs 3.
Govt jittery over rising food prices ahead of state polls (ET 18/3/2013)
The runaway food inflation has set the alarm bells ringing in government that faces many
state elections in the next few months and a general election next summer. The finance
ministry has shot off a missive to food and consumer affairs ministry to take a stock of food
stocks situation, releases and reasons behind the price rise in food grains as consumer
inflation climbed into double digits.
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Arvind Mayaram, department of economic affairs secretary, has written to food secretary to
review the current situation and the reasons behind the flare up especially when a good Rabi
crop was expected in the market, said a finance ministry official privy to the communication.
The food and beverages sub-index in the consumer price index was up 13.73% in February
from 13.36% in January. And this time, unlike the last couple of years, the rise is being
driven by cereals even as government sits on massive stocks of wheat and rice. Retail
inflation in cereals and pulses was 17% in February.
The stock of food grains (rice and wheat) in India's central pool as on February 1 this year
was 661.93 lakhs tons comprising 353.84 lakh tons of rice and 308.09 lakh tons of wheat.
"There is no reason for rise in food grains," said the official, adding that the government is
also worried that higher food inflation could reignite inflation that has been tamed with much
difficulty. The Reserve Bank of India may cut rates on Tuesday after core inflation, a
measure of consumer demand, dropped to below 4%, but may find further cuts difficult if
food inflation remains elevated.
C Rangarajan, chairman of Prime Minister's Economic Advisory Council, also called for
faster releases from the government stock in open market to dampen prices. "We really need
to take action to push more of the foodgrain into the market," he told ET in an interview.
However, that may not suffice unless states, which have the power over retail trade, check
hoarding and speculation.
After a review of the food stock situation, the centre is expected to ask states to crackdown
on any hoarding. The centre has in past imposed stock holding limits to prevent hoarding of
food items by restricting traders to store stock in excess of a government presescribed limit.
Food inflation negative for India's credit ratings: Moody's (FE 18/3/2013)
India's high food inflation is a negative for the country's sovereign ratings as it filters through
the broader economy, with adverse consequences for growth and the country's large fiscal
and current account deficits, Moody's said on Monday.
Moody's Investors Service is the only one of the three major credit agencies to rate India with
a "stable" outlook. Fitch Ratings and Standard and Poor's Ratings Services downgraded their
outlook on India to "negative" from "stable" last year.
Higher food prices can accelerate broader inflation by pushing up wages, while negatively
impacting the government finances and reducing monetary policy flexibility, Moody's said in
a report.
The report comes after S&P last week said the slowdown in domestic economic growth is
less supportive for India's sovereign ratings.
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"Sustained food inflation is credit negative because it exacerbates India's macroeconomic
challenges of slowing growth, high inflation and large fiscal and current account deficits,"
Moody's said.
India last week said consumer price inflation rose 10.9 percent in February, accelerating
slightly from January, while wholesale price inflation rose 6.84 percent from a year earlier.
Although food inflation slowed down to 11.38 percent last month from 11.88 percent in
January, it stayed in double-digits for the third straight month, tempering expectations of any
aggressive monetary easing.
Moody's estimates food accounts for more than 50 percent of the average household
spending in India, a worry for an economy that relies largely on private consumption.
Sustained food inflation over several quarters also has the potential to push up wages,
reducing the extent through which the central bank can lower interest rates, while reducing
the competitiveness of exports and import-competing sectors.
Food inflation also worsens the country's budget deficit given the government subsidises
prices for a large portion of the population, Moody's added.
Increasing food supply could be a solution, but India is constrained by poor rural
infrastructure, inefficient food distribution and storage systems and by agricultural
productivity, Moody's also warned.
