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TRANSCRIPT
COMMODITY OUTLOOK AND
SITUATION ANALYSIS
Weekly Report 14 – 20 July, 2019
Basmati price down 12% on higher acreage, no fresh payments from Iran
Basmati rice has become cheaper 12 per cent during the past
one month due to an increase in the area under cultivation and
cessation of fresh payments from US sanction-hit Iran, the largest
buyer of India’s aromatic rice. The fair average quality (FAQ)
variety is currently quoting at Rs 72 a kg in the benchmark physical
Delhi wholesale market, as compared to Rs 82 about a month ago.
With satisfactory progress of monsoon rainfalls prompting
farmers to bring in additional area under basmati sowing, prices
are set to fall lower going forward. The
ongoing payment stoppage by Iranian
importers may pare India’s basmati exports
to that country, which is facing economic
sanctions from the United States.
“Indian exporters are currently executing old orders. Hence, there
is no export problem as of now. But, importers in Iran have stopped
fresh payments for the past one month, bringing new orders to a
complete halt. As long as advance payments to their accounts
continue, exporters would face no issues. But, fresh exports would
be difficult. Indian markets have already started responding to
Iran’s payment stoppage, and basmati prices shed Rs 10 a kg or 12
per cent the past one month,” said Sushil Jain, Vice President, All
India Rice Exporters’ Association (AIREA).
Informed sources said advance amounts of Rs 1,800 crore
received from Iranian importers are lying in various banks
accounts held by the Iranians in India. India’s basmati
rice exporters would continue till payments from these accounts
are exhausted. “Basmati prices have declined in the last one month.
But, future price movement would depend upon the progress of
this year’s monsoon rain and farmers’ interest in sowing of basmati
paddy,” said Anand Goyal, Owner, Akash Rice Mills, a Delhi-
based basmati rice miller, trader and exporter.
Meanwhile, India’s two commodity exchanges, National
Commodity & Derivatives Exchange (NCDEX) and Indian
Commodity Exchange (ICEX) have started futures trading in 1,121
varieties of basmati. The ongoing uncertainty and price volatility
offer immense opportunities for traders, exporters and rice mills
to hedge their price risk in
futures.
Being a compulsory delivery
contract with small trading
unit of 10 tonnes and basic
delivery centres in Karnal and
Haryana, basmati paddy is
trading at about Rs 42 a kg in
the futures market. “Apart from the Iran issue, Indian basmati rice
exporters are also facing phytosanitary issues with the European
Union, which poses a threat to ongoing exports. While there arr
negotiations with the European Union on pesticide residue issues,
overall basmati exports may decline this year,” said Gurnam Arora,
Joint Managing Director, Kohinoor Foods Ltd, the producer of
Kohinoor brand basmati rice. Basmati prices have been volatile the
past few months. Prices fell when the US withdrew the waiver on
India's dealings with Iran, then rose and are falling again.
Sanjit Prasad, MD & CEO, ICEX, said, “Basmati exhibits large
price volatility, and could impact market participants to the point
of business closure. The futures contracts in 1,121 varieties will
help them deal with price uncertainty.” India produces some 6.5
million tonnes of basmati rice, two-thirds of which are exported.
Iran is the largest buyer of basmati rice, contributing nearly 25 per
cent of India’s annual basmati exports.
High Demand, Low Stock Stoke Grain Prices
New Delhi: Lower stock of maize, bajra and broken rice and higher
demand of wheat and soya bean have increased the prices of these
commodities in recent weeks. Maize is up almost 25% in a month
while broken rice and wheat have gained 8% in the past two
months in the spot market. Grains prices also have an impact on
both poultry and cattle feed. Higher prices of the grains prompted
dairies to increase the price of milk both for consumers and
farmers who sell it.
“There is shortage of maize, bajra and broken rice, which we
expect will continue till the new crop is harvested in October-
November,” said Ramesh Chandra Khatri, president of Poultry
Federation of India. Chicken is selling at ₹200 a kg in retail while
farmers are getting ₹60-75 a kg, he said. Maize prices has increased
by almost 25% within one month to ₹22 per kg, wheat and broken
rice by 8% to ₹20 per kg and ₹22 a kg in the past two months, bajra
by 10% in last two months to ₹21and soya bean de-oiled cake by
5% to ₹33 a kg in the spot market, said Khatri. According to the
industry, the ripple effect of shortage of maize, mainly because of
drought, pest attacks and significant reduction in cultivable areas
last year across Maharashtra and Karnataka, continues. “Last year,
production was 2.5 million tonnes less than the annual
requirement of 23 MT. This has led to firm prices of maize and
simultaneously boosted demand and price of other grains used is
the feed sector,” said Prerana Desai, head of research at Edelweiss
Agri Services and Credit. The government move to permit import
of 4,00,000 tonne of feed grade maize at a concessional import duty
of 15% early this month and of over 1,00,000 tonne in June under
advance licensing system has also not helped in easing down the
prices, said analysts.
Supply shortage raises veggie prices in wholesale markets in Mumbai, Delhi
Vegetables prices in Mumbai and Delhi wholesale markets
increased in July after supply fell because of poor rainfall in
western India and floods in Bihar and the north-east. Hybrid
tomato in the Mumbai wholesale market was selling at Rs 18 a kg
on Wednesday--a 50 per cent
rise from early this month. The
price of locally-grown tomato in
the Delhi wholesale market
increased by 82 per cent to Rs
30.50 a kg on Wednesday
compared to the price early July.
Cabbage, cauliflower, brinjal prices too have sharply increased,
worrying policy makers and consumers alike.
“While some pockets in Maharashtra have received good rainfalls
this monsoon season,
major vegetable
supplying regions
including Nashik
remained deficient.
Farmers were quick to
assess deficiency after
almost three weeks of
delay in the onset of monsoon rains this year. Consumers would
have no respite from high vegetables prices till widespread
monsoon rainfalls resume across major producing regions,” said
Anil Chavan, secretary of Agricultural Produce Market Committee
(APMC) in Mumbai. Sources said farmers in Maharashtra are
reluctant to start sowing after many of them lost crops in some
parts of Maharashtra last year when rains failed. Farmers in other
parts in the state could not harvest vegetables after the first round
of picking, resulting into crop failure of over 50-60 per cent.
“Consumers are unlikely to get respite from high vegetables prices
for over a month. Farmers, who have sown seed with the onset of
the monsoon rainfalls, will get the first output in the next 45 days
with an average crop cycle of 90 days. Hence, vegetables supply is
going to boost only in 30-45 days,” said Shriram Gadhave,
president of the Pune-based Vegetable Growers Association.
Vegetable supply from Uttar Pradesh and Bihar is poor because of
heavy rainfall and flood in the two states respectively.
Cauliflower supply, for example, slumped to 18.2 tonnes on July 17
compared to 22.5 tonnes in the beginning of the month. Bitter
gourd supply fell to a 2.6 tonnes from 6.1 tonnes. Retail vegetable
markets, however, have not been impacted as price movement
from the wholesale market takes about a week to spill over.
Meanwhile, vegetables demand is going to pick up during the holy
month of Shravan amid supply concerns. Data compiled by the
Indian Meteorological Department (IMD) showed 14 per cent
deficiency in cumulative rainfalls during the period between June
1 and July 10. With the rainfalls have started gradually improving,
the overall sowing of vegetables is likely to improve in the weeks
to come.
Mother Dairy to sell tomatoes at Rs 40/kg in Delhi to contain price rise
The Delhi government has also been asked to "exhort traders
and logistic providers to increase the supply of tomatoes to the
mandis to ensure immediate control of price rise," the Union
Consumer Affairs Ministry said in a statement.
In a bid to check rising tomato prices
in the national capital, the Centre
Friday asked state-owned Mother
Dairy to boost its availability and sell
the key kitchen staple at Rs 40 per kg.
The Delhi government has also been
asked to “exhort traders and logistic providers to increase the
supply of tomatoes to the mandis to ensure immediate control of
price rise,” the Union Consumer Affairs Ministry said in a
statement. A decision in this regard was taken by a high-level Inter-
Ministerial Committee meeting chaired by Consumer Affairs
Secretary Avinash K Srivastava, it said. Tomato prices in the retail
markets of Delhi-NCR have shot up to Rs 60-80 per kg owing to
supply disruptions following rains in key producing states. “It was
indicated by Horticulture Division that the situation is only
momentary and augmenting of supplies which has commenced
shall further increase. Due to the rains the supply of tomatoes in
the market, which was delayed, will be back to normal,” the
ministry added. The committee, which reviewed the price and
availability of tomatoes in Delhi with stakeholders, observed that
prices rose sharply since July 10 and took two decisions to
immediately control the rise in prices. Firstly, Mother Dairy has
been directed to immediately begin selling quality tomatoes
through its retail outlets at Rs 40 per kg. It has also been asked to
increase the supply in the market to ensure that quality tomatoes
are available to consumers at lower prices. Secondly, the Delhi
government’s Food and Civil Supplies Department has been
instructed to exhort traders and logistic providers to increase the
supply of tomatoes to the mandis to ensure immediate control of
price rise. Mother Dairy sells fruits and vegetables in about 100
Safal outlets in the Delhi-NCR region.
Project to empower women in agriculture
Training in bee rearing and millet cultivation also proposed
The FICCI Ladies Organisation (FLO) recently launched a project to
empower women in agriculture and is working on key three
initiatives. Harjinder Kaur Talwar, national president of FLO,
told The Hindu on Wednesday that “FLO Agriculture Initiative” was
launched in April this year in association with the Union Ministry
of Agriculture. Of the total women population in the country, 71 %
is associated with agriculture.
They need to be trained and
empowered. At the policy-level,
the Organisation is trying to
talking to two States for
amendments in the laws
concerned so that women who
take up agriculture can be classified as farmers and can avail of all
the benefits. It also tied up with a non-governmental organisation
to train women hailing from Telangana, Rajasthan, and Madhya
Pradesh in extracting and preserving custard apple pulp. “We will
talk to ice cream makers and work on a tie-up so that they can buy
the pulp to make ice creams,” she said. Another initiative is to train
women in bee rearing. It was started on a pilot basis in Ludhiana
and will be launched across the country by the end of next month.
“Our international delegation this year will visit Israel to study its
technologies in agriculture. Israel has a few centres of excellence in
agriculture in India. We will look at technology transfer and
training women in agriculture technologies,” Ms. Talwar added.
Another project to be launched nation-wide is training of young
girls in Information Technology. “The aim of FLO is to empower
women economically. Young girls will be trained to become
employable. This will be done by all the FLO chapters. The plan is
to train 1,000 young women this year.”
The Organisation also conducts workshops and programmes
for professionals. It will conduct sessions for women who are
members of Corporate company boards and train women to
become members. It will host on its website the names of women
whom it has trained. Poonam Bafna, chairperson of FLO
- Coimbatore, said it plans to launch soon programmes for women
in the district in bee rearing and millet cultivation. With investment
opportunities present across the country, the organisation
members wants to know about the potential and opportunities
here. The two-day FLO programme here on Thursday and Friday,
with 157 participants from other States, also has an expo of
products made by the Organisation members. Inaugurating the
event, District Collector K. Rajamani said the district is unique and
has opportunities for growth in healthcare, education,
manufacturing, and textiles.
Assam tea output may drop 8% on rain,
floods
Kolkata: Tea production in Assam is expected to decline 8 per
cent this year owing to heavy rainfall and floods, said planters
and industry executives. It has been raining incessantly in the
north eastern state for the past
10 days and planters fear that if
this situation continues for
another week, output will be
further hit.
Assam’s tea estates produced 645.14 million kg of tea in 2018,
accounting for nearly 49 per cent of the country’s production of
1,338.63 million kg. “Heavy rains in July, coupled with floods, will
bring down production by 8 per cent. But if the rain does not stop
within the next five-seven days, crop loss will be more,” said Vivek
Goenka, chairman, Indian Tea Association. “Information trickling
in from planters reveals that the tea estates located close to the
Brahmaputra river have been flooded and the crop loss may be as
high as 15 per cent, particularly in these estates.”
The situation in Assam deteriorated this week as floodwaters
submerged 153,211hectares of farmland in 30 districts. About 90
per cent of Kaziranga National Park is inundated. “Excessive rains
in July will take a toll on crop size,” said DP Maheshwari, managing
director, Jayashree Tea & Industries. “There is no sunshine at all
and, even if it is not raining, the sky is overcast with clouds. In July,
bushes require a temperature of 35 degrees for producing teas. But
the temperature is much lower now due to rains.” Although
planters are upset over the loss of crop, black tea prices may move
up in the coming months as there will be less supply. Prices of
common variety black tea or CTC have remained depressed this
year.
Source : Verbatim reproduced from different sources