Posts Tagged ‘sugar prices’

Farm Production likely to Go Down

Farm Production likely to Go Down

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Due to decline in kharif production on account of drought and floods in several parts of India,the output from agriculture sector is expected to decrease by 0.2% in the current fiscal against 1.6% growth in the previous year stated the Central Statistical Organization (CSO).

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However, late last month, the RBI in its Q3 review of the monetary policy had projected that the agricultural GDP growth in 2009-10 is likely to be near zero.

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Production of foodgrains and oilseeds is likely to decline by 8% and 5% in the 2009-10 crop year compared with the previous year.

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The sugarcane output is likely to dip by 11.8% and that could add up to pressure on the sugar prices.

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Meanwhile, among the horticultural crops, production of fruits and vegetables is expected to increase by 2.5% and 4.8%, respectively, in 2009-10.

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Rice production is estimated to be 71.65 million tonnes in the 2009-10 kharif season as compared to the actual production of 84.58 million tonnes in the previous season.

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On the other hand, production of coarse cereals is also likely to fall to 22.76 million tonnes from the actual production of 28.34 million tonnes in the 2008-09 kharif season.

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Farmers in Upbeat Mood over Prospects of Commercial Crops

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

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Farmers in Upbeat Mood over Prospects of Commercial Crops

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Farmers in upbeat mood over prospects of commercial crops

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Vagaries of nature may have dampened the mood of farmers in the district of Guntur in Andhra Pradesh with fears lingering over decrease in the yield, but the first signs in the yield of commercial crops are already indicating towards a record production.

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The prolonged drought which delayed the sowing operations in kharif last year meant that the acreage has decreased by about 20,000 acres.

The year 2008-2009, the paddy yield has shot up to 12.96 MT in 2009-2010.

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The drought, however, seems to have hit the prospects of cotton farmers as the yield had been reduced by 1.25 lakh MT.

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As against the total yield of 6.61 lakh MT in the year 2008-2009, the yield has fallen to 5.36 lakh MT in the year 2009-2010.

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In comparison, chilli farmers are smiling as both the acreage and production have shot up considerably.

The yield has shot up by 40,000 MT and the acreage too has increased by about 40,000 hectares.

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In the year 2008-2009, statistics available with the Agriculture Department showed that, chilli was sown in 63, 628 hectares and the cultivable area went up by 67, 867 hectares.

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In Other major Commodities Update, there is a news of soyabeans and corn rice rising the most last week and on the other news, sugar prices surging up by Rs 14/kg in Kerala after the subsidy rollback by state govt.

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Soybeans, Corn Rise Ahead of U.S. Forecasts for Crop Reserves:

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Soybeans rose the most in almost a week on speculation that U.S. crop reserves may be lower than earlier estimates.

Corn and wheat also advanced.

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Soybeans for March delivery rose as much as 13.25 cents, or 1.5 percent, on the Chicago Board of Trade, the biggest intraday gain since Feb. 2.

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The U.S. Department of Agriculture is expected to cut its projection for soybeans reserves before the 2010 harvests to 221 million bushels in a report on Feb. 9, from the 245 million estimated last month, a Bloomberg News survey showed.

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Subsidy rollback pushes sugar prices by Rs 14/kg in Kerala:

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Kerala government’s recent decision to stop Rs 28-crore subsidy to its grocery retailing arm Supplyco has pushed sugar prices by around Rs 14 per kg in Supplyco’s outfits.

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Though, sugar prices in state-run shops is still lower than the open market price of around Rs 45 per kg or even Nafed-fixed price of Rs 41 per kg, but low stocks have minimized the benefit of low prices.

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Rajasthan Exempts VAT on Sugar

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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Rajasthan exempts VAT on sugar

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Rajasthan exempts VAT on Sugar:

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Now sugar would be cheaper by Rs 2 in Rajasthan.

Rajasthan government has decided to exempt VAT on imported sugar in the state till June 30.

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This will help in reining the spiralling sugar prices in a week’s time.

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“The state imposes 4% VAT on sugar. With this exemption, the prices will go down by Rs 160 per quintal,’ says a government official.

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According to Indian Sugar Mills Association, the world sugar economy is facing significant gap between world consumption and production for the second consecutive year.

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The first revision of the world sugar balance for October 2009 to September 2010 puts world production at 159.887 million tonnes, raw value, up by 6.911 million tonnes or 4.5% from the last season.

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The global use of sugar is expected to reach 167.134 mn tonnes.

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Therefore, the world statistical deficit is expected to reach 7.247 million tonnes as against 8.404 million tonnes projected in September 2009.

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Sugar Trade Association of Rajasthan secretary Ballabh Kabra said that this decision can make way for sugar mills to buy imported sugar. “This is the first step to cool down the prices.

We are waiting for government’s nod for importing sugar on our own.

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Sugar prices in Rajasthan are hovering around Rs 41- 43 a kg.

Apart from 4% VAT, sugar attracts mandi tax of 1.6% and an entry tax of 0.25% in Rajasthan,” he said.

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In Other major Commodities Update, we have news about the easing of food prices in coming days as signaled by the Food and Agriculture Minister Sharad Pawar.

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Food prices to ease next fiscal: Pawar

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Food prices are expected to decline in the next fiscal on the back of higher farm output and the only worry then for the government would be on storage, Food and Agriculture Minister Sharad Pawar has said.

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He, however, said that the country would remain import dependent when it came to pulses and edible oils for the next 10 years.

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On the possibility of prices coming down in the next financial year beginning April one, Pawar told in an interview to a news channel: “100 per cent”.

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In 2011-12 the problem which the government of India will have to worry about (is) what to do and where to store”.

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Food inflation touched 17.40 per cent for the week ended January 16 on account of high prices of vegetables and pulses.

On controlling prices of pulses, the minister said.

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Banks Warned Regarding Insurance to Farmers

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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Banks Warned Regarding Insurance to Farmers

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Banks Warned Regarding Insurance to Farmers:

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Severe action will be taken against banks if they adjust the amounts payable to farmers under crop insurance scheme (Rs. 801 crore) and input subsidy (Rs. 600 crore), against their old loan dues.

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Collectors have been asked to convene meetings of district level bankers’ committees to warn them against withholding these sums, affecting sowing of fresh crops.

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Also, they have been asked to take steps for re-scheduling of crop loans in 1,068 mandals declared as affected by drought or floods.

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The conference also decided to provide road connectivity to all SC and ST habitations with Rs 1,200 crore available for the purpose, begin procurement of kharif produce to build up buffer stocks for subsidizsd schemes.

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Mr Rao said a decision was taken to announce a new tribal policy aiming at empowerment of the tribals.

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In Other major Commodities Updates we can read that retail prices have sugar have started showing some signs of moderation in the national capital of the country.

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Retail sugar prices moderate in Delhi, high in other cities:

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In some good news for consumers, retail prices of sugar which have climbed by more than Rs 6 per kg since January 1 have shown some signs of moderation at least in the national capital Delhi, which has been bearing the brunt of the price spike.

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Latest data from food and consumer affairs ministry shows that retail sugar prices in the capital, which had risen to almost Rs 47 per kg around January 15 has dropped by Rs 2 per kg to Rs 45 in the last couple of days.

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In other major cities though there is hardly any big change.

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In Jammu, government data showed that retail sugar prices have climbed by Rs 8 per kg since January 11, while in Lucknow prices have hardened by Rs 6 and in Jaipur, Aizwal and Dehradun prices have moved by whopping Rs 9 to Rs 10 per kg since January 11.

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NABARD Favours Increasing Credit Flow by Rs. 10,000 cr. in 2010-11

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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NABARD favours increasing credit flow by Rs. 10,000 cr. in 2010-11

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NABARD favours increasing Credit Flow by Rs. 10,000 cr. in 2010-11

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Chairman of the National Bank for Agriculture and Rural Development (NABARD),Umesh Chandra Sarangi on Wednesday stressed the need for enhancing the credit potential in the State by at least by Rs. 10,000 crore in 2010-11 over the previous year’s Rs. 27,543 crore.

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NABARD’s regional office has estimated a credit flow potential at Rs. 31,254.74 crore for 2010-11.

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Crop loans of farmers affected by floods would be rescheduled.

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These credit estimates provided the basis for preparation of district credit plans by lead banks in each district, he said.

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In Other major Commodities Updates we have news of Agri Commodities turning bearish since the beginning of the new year and downward revision of reserve price of wheat by the Centre.

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Agri commodities FALL on global cues

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Barring wheat and sugar, all other agri commodities have turned bearish since the beginning of the new year, providing much needed relief to consumers and policy makers.

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Prices of agricultural commodities have declined by up to 11 per cent since January 1 which analysts attribute to a downward turn in the global markets.

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Also, fresh arrivals, including pulses, have provided relief to the government.

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New pulses crop arrivals have started in Maharashtra which, for sometime, will keep prices under pressure.

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Delay in government tenders coupled with higher quotes kept wheat prices firm while unavailability of cane for crushing pushed prices of sugar up.

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Lower price of wheat cheers roller flour mills:

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The roller flour mills in Punjab, Haryana and Chandigarh got a new beginning in the new year with the downward revision of reserve price of wheat by the Centre for bulk buyers.

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The price cut of Rs 200 per quintal under the open market sales scheme(OMSS) from Rs 1,440 per quintal to Rs 1,240 per quintal has helped over 80 roller flour mil is in the region to streamline their operations.

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Under OMSS the states are given a specific quantity of wheat.

Punjab got 140,000 tonnes and Chandigarh got about 14,000 tonnes.

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The roller flour mills and big chakkis get an allocation of about 1,000 tonne per month at the price quoted in the tender.

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The price at which the millers buy wheat under OMSS is slightly higher than the reserved price but substantially lower than the price offered by private players.

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Marginal Dip in December’s Rubber Production

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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Marginal Dip in December's Rubber Production

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Marginal dip in Dec rubber production:-

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Midway through the peak period, rubber production dipped marginally by 2 per cent to 98,000 tonnes in December against 1.00225 lakh tonnes last year.

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However, with industrial recovery firmly under way, rubber consumption remains robust, growing 17 per cent to 79,500 tonnes.

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Preliminary indications show severe slippage in Malaysia’s rubber production and India is likely to become the world’s third-largest producer of natural rubber after Thailand and Indonesia.

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In Other major Commodities Updates we can read that domestic pepper futures market continues to remain highly volatile and Sugar prices expected to remain higher in the coming month.

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Pepper futures continue to remain volatile:-

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The domestic pepper futures market continued to remain highly volatile because of the tug of war between the bulls and the bears.

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The prices were falling without any co-relation to the fundamentals.

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Spot prices fell from Rs 15,000 a quintal to Rs 13,700 in about a month.

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The reasons attributed included arrivals of the new crop, huge outstanding position in the January delivery and easing of other origins and so on.

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Around 1,200 tonnes of pepper would have its validity expired on Feb 5 and that is expected to be tendered for delivery and thus it might also enter the market.

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Sugar prices may remain firm in coming months:-

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Sugar prices are expected to remain higher in the coming months as lower acreage and poor rains will keep India’soutput at 15.3 million tonnes,

falling severely short of domestic consumption of about 23 million tonnes in the 2009/10 season.

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Sweetness Of Sugar – Part 1 :)

Hello Friends here we come up with our another write up on “Commodity Corner Series” 🙂

Sweetness of Sugar

Sweetness of Sugar

We would touch upon aspects like seasonality,cyclic nature and analysis of price trend of Sugar.

The Commodity

Sugar is the most plentiful economic sweetener and India’s second largest agro-processing industry.

There are more than 600 installed sugar mills in the country.

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The Seasonality & Cyclic Nature

The crushing season in the country generally starts from October and reaches its peak in January before March end or April of the next year.

It has been seen that during this period, supply arrives in the market and resultantly prices starts falling.

The cyclic pattern of the sugar industry lasts for 3-5 years.

Currently, the domestic sugar market is entering into a severe shortage phase due to sharp decline in production.

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Analysis Of Price Trend

Tracking short term movements as well as the longer term trends seen in and over the last years, one can analyse and assess its prices.

Since 2006, Sugar has been widely talked displaying a continuous bullish rally both in domestic & international market.

In domestic markets, Sugar prices remained bearish in the most part of the year 2007.

Prices surged by almost 30% in the first half of 2008 & regained its sweetness with supportive factors like lower production estimates and rise in export demand.

From July 2008 sugar prices have been maintaining its bullish trend.

In January, 2009 sugar prices reached record high levels.

With an eye on the rising prices, the Central Government announced measures with aim to control sugar prices.

In the month of May, 2009 world sugar prices have surged to a near-three year high, on the back of speculative buying by
funds betting on supply shortfalls in India and Pakistan.

Since October (the beginning of the 2008-09 sugar season), prices in spot and futures market have witnessed a bull run due to lower production estimates for the season.

Market has already breached the long term bearish trend line and presently trading in an interim bullish trend channel.

Speculators, and especially large traders, have really embraced the long side of the Sugar market.

The commodity has one of the best fundamental pictures right now and it is getting a good deal of solid buying.
The sugar market is overbought but it seems that it still has room to move higher in the longterm bull market than imagined.

It has been one of the better performers of the commodities market.

The price of Sugar has more than tripled in about 3 years.

Though, Sugar seems set to lose some of its sweetness for consumers in the time to come.

Sugar prices recently touched a 28-year high of 25.39 cents per pound on September 30, 2009.

This is likely to climb up going forward, because imports by countries such as China, Russia, Mexico and India are set to rise. These countries are consuming more, but producing less of the commodity.

Sugar futures tended to do well in these years.
An investor could have increased his return variability in these years without sacrificing any of his return.

Stay Tuned for more on Sugar Market in commodity corner 😉

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