Posts Tagged ‘sugarcane’

MAIZE……… “A-maize-ing”

The changing desires of eating taste have changed the periphery of the cereal. The change of label from “makka” on the road side to “masala corn” or “sweet corn” in the shopping malls across the country, has given an edge to this commodity.

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ACERAGE REPORT – INDIA

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Area, production and yield of maize in India had been increasing for the last five decades and India had reached near self sufficiency in production. “But this year there is a small twist in the story”.

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Maize is grown in both kharif and rabi seasons. According to data provided by industry players, kharif maize output is estimated at 12.5 million tonnes for 2009-10 as compared to 14 million tonnes in the previous year. The rabi season output is estimated at 4.68 million tonnes as against 5.60 million tonnes in the previous year. Overall, maize production in 2009-10 is likely to be 17.28 per cent lower, or 3.41 million tonnes less, at 16.32 million tonnes, from 19.73 million tonnes in 2008-09.

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Punjab: Maize acreage in Punjab is expected to increase by about 1.50 lakh hectares to 2.82 lakh hectare this season. In the last few years, maize is also grown in spring, particularly in the potato belt of the state.

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Haryana: Haryana farmers have increased the corn acreage to 40,000 hectares against the government target of 4000 hectares. This might not have an impact on domestic corn prices for the reason that Haryana is not a major corn producer and acreage in major corn producing states Karnataka and Andhra Pradesh has declined..

Tamil Nadu: Acreage of corn in Tamil Nadu has increased by around 71% till June 7, 2010 compared to last year.

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Andhra Pradesh: Despite of the normal rains in Andhra Pradesh, acreage under maize as on 16/06/10 has reduced significantly. Lucrative returns in other crops like sugarcane, sesamum have attracted farmers to shift corn area into those crops. Area covered under maize in Andhra Pradesh as on 16/06/10 is reported at 8945 hectares compared to the normal area covered till date 31403 hectares..

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On the whole, the total sowing acreage of maize as on 26th June 2010, reduced by 35% to 5.39 lakh hectares due to delayed monsoon in northern and central part of India..

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ACERAGE REPORT – WORLD.

Global maize production was likely to be a record 822 million tonne (MT) in the 2010-11 season, the International Grains Council (IGC) said in its latest report. “The world maize production forecast for 2010-11 is increased by 15 MT to a record 822 MT, up from 807 MT last season, due to improved prospects in US, Mexico and parts of Africa” the IGC report said.

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In its weekly crop ratings report, USDA said 73 percent of the corn crop was in good or excellent condition, down from 75 percent a week before.

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FUNDAMENTAL OUTLOOK

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·Chicago Board Of Trade (CBOT)

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U.S. corn futures market is caught between pressure from expectations for a big U.S.crop and support from uncertainty about weather and Chinese demand. Corn futures headed for the biggest monthly decline in three months as planting advances in the U.S., the world’s largest exporter, boosting expectations that the next harvest may exceed last year’s record. The USDA kept its estimate on the nation’s corn production unchanged at 13.37 billion bushels in the year beginning September, with 88.8 million acres planted, beating last harvest’s record of 13.11 billion bushels.

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·National Commodity Derivative Exchange (NCDEX)

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Maize NCDEX July future prices had seen consolidation in a range of 1010-1025. Recently, the counter making a technical break out, made a high of 1034.50. Despite of the higher acerage reports, the prices have maintained a continuous uptrend journey. Maize futures have given a profit return of about 9% in a span of six months dwelling between both bulls & bears. Most interestingly, the July contract has registered a profit of more than 11.69% within 8 weeks – 48 trading sessions – 336 hours of trade (approx.). Prices maintaining an upright stand & expecting the same with continuous buying from the consuming industries, the cereal is anticipated to make new highs. Maize NCDEX July future prices are in CONTANGO situation as
against June contract.

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Therefore to sum-up, there is a lot’s potential for corn futures supported by the fact of upcoming demand & rising consumption from every corner of the world. The day is not very far for the cereal to be the most “A-maize-thing” amazing commodity on trading platforms, giving their best returns.

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India’s Sugar Output Could Rise by 16 Million Tonnes : Pawar

Food and Agriculture Minister Sharad Pawar stated that due to improved yields in key growing states, India’s sugar output in the current season could rise by 16 million tonnes (MT). 🙂

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The output is still much short of India’s annual demand of 23 MT.

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Sugar season runs from October to September.

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He said that the productivity of sugarcane has boosted considerably in Karnataka and Gujarat along with the top 2 producers Maharashtra and Uttar Pradesh..

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The encouraging trend is that sugarcane productivity particularly in Uttar Pradesh, Maharashtra, Karnataka and Gujarat has improved substantially.

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Meanwhile, Maharashtra and UP produce nearly 60% of India’s total sugar output.

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He added that the government may revise upwards the sugar estimates after reports of higher cane yield from these states.

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On the other hand, the government has estimated sugar output in the 2009-10 season (October-September) at 16 MT, against 14.7 MT in the previous season.

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Earlier, Biscuit makers stated that the government’s decision to reduce stock limits of sugar to 10 days will have an unfavorable impact on their production and also that they should be allowed to keep supplies for minimum 30 days.

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Federation of Biscuits Manufacturers of India (FBIM) Secretary Mallika Verma stated that any control imposed on stock limit of sugar will restrict manufacturer’s freedom in the manufacture of finished goods.

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Previously, Kanhaiyalal Gidwani, a senior Maharashtra Congress leader has urged the Prime Minister to limit industrial users from consuming domestically produced sugar, stating that sugar prices could touch a high Rs 60 a kg if supply is not hiked.

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Such a step can augment the supply by a hefty 40 lakh tonne as 20% of the domestic demand come from industrial users.

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He said the Centre should change sugar control policy by restricting industrial users like manufacturers of soft drinks, fruit-juices, alcohol, chocolates and ice-creams from using locally produced sugar and instead allow them to import the sweetener.

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Moreover, the Centre has extended the stock limit order for sugar till September for Sugar, where the states are authorized to take action against the hoarders and black marketers.

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Earlier the validity of the anti-hoarding order was issued in March, 2009 and was supposed to expire on 31st of January, which has been further extended till September. Previously, the order was extended for 6 months till July, 2009.

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However, earlier, it was said that inspite of the promise made by Mr. Sharad Pawar, Food Minister of the country, to reduce the retail prices of sugar, still the prices are increasing.

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Therefore, to boost the domestic supply and temper prices, the Prime Minister – Dr. Manmohan Singh approved the proposal to sell imported raw sugar stocks lying at Mundra and Kandla ports.

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Meanwhile, the government had announced a vital repose of norms for the import of raw sugar, where the sugar could be refined anywhere in the country and not only by the mill that had imported it.

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Mr. Sharad Pawar, Agriculture Minister said to accelerate the refining of raw sugar and improve its availability in the market, the government has relaxed the central excise rules to enable the processing of sugar in any mills of the state.

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On the other hand, Mr. Sharad Pawar our Food Minister has said, the country will have enough sugar this year, but the prices of sugar will continue to be higher because of the low output in sugar. Further he said rising prices of sugar is a big concern for the government.

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Along with the Food Minister our Prime Minister Man Mohan Singh in a meeting with the Indian Sugar Mills Association (ISMA) has also expressed concern regarding rising of sugar prices and their possible impact on consumer prices.

Stay Tuned for More updates :)

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Global Coffee Output May Dip 3.6 Per cent in the 2009-10

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

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Global Coffee Output May Dip 3.6 Per cent in the 2009-10

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Global coffee output may dip 3.6% : ICO

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Global coffee output may dip 3.6 per cent to 7.41 million tonnes (mt) in the 2009-10 crop year on fall in production in Brazil and Africa, the International Coffee Organisation (ICO) said.

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Adverse climatic conditions in few growing regions may also affect crop quality, it added.

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Last year, world coffee output had stood at 7.69 mt, it said, adding that the estimate for this year is preliminary as data from Colombia and Vietnam is pending.

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“With factors such as a prolonged dry season and high levels of coffee berry borer infestation, there appears to be little possibility of an increase in global production,” ICO said in its latest market report.

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In Other major Commodities Update, there are news of rabi productions falling short of expectations and Uttarakhand government seems not to be increasing the sugar price.

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Rabi output may fail to meet estimates:

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All eyes are now on the estimates for the rabi crop this year.

A good winter crop (rabi) will help augment the foodgrain supply and ease food prices.

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Hopes of a good crop have been fuelled by favourable weather conditions and the greater thrust on increasing the rabi crop.

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The Union agriculture ministry has already indicated that the rabi season, this year, may see an additional 10 million tonne (mt) of output over the past year’s production, implying a growth of 8%.

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This optimism on the rabi crop has prompted the Central Statistical Organisation or CSO — the government’s statistics arm — to estimate a meagre fall of 0.2% in agri output this year despite a 16% fall in the kharif (or summer crop) output due to the deficient monsoon.

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Uttarakhand not to increase sugarcane price:

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The Uttarakhand government seems to be in no mood to increase the price of Rs 215-220 per quintal for sugarcane despite a hefty increase by private sugar mills.

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In the first week of December, the government announced the state advised price (SAP) of Rs 192-197 at a time when farmers were agitating for a price of Rs 250.

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But soon, the private mills began paying heavy bonuses to farmers in the face of acute shortfall in a desperate bid to keep the factories running.

The government too decided to give bonus with a final price of Rs 215-220.

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COMMODITY WEEKLY COMMENTARY

Most of the commodities finished lower last week on heavy profit booking. Recent bounce back in dollar index compelled commodity traders to quit their long positions. However, some commodities viz., aluminum, nickel and natural gas moved on their own fundamentals and ignored the upside of dollar index. Threat of closure of two mines of Alcoa amid the concern that about three quarters of LME  stockpiles have been tied up by long term financing deals by traders and merchants, raised the premium
on aluminum, sent aluminum prices higher.

Likewise, nickel surged on lower level buying. Rest of the  base metals erased their previous gains to some extent on rise in dollar index amid some negative data.

Gold and silver gave up their previous gain due to the improvement in dollar value. However, recent fall in gold prices brought back smile on consumers face and there is an expectation that import will increase. Negative data, fall in GDP of Japanese economy, higher dollar amid expectation of slower demand of crude in 2010 by EIA hammered crude oil prices and it touched two months low. On the contrary, natural gas jumped on increased seasonal demand. Cold snaps in northwest and Midwest revived the demand of natural gas and it recovered across the bourses, where natural gas is used 72% for heating purpose.

Coming to agro commodities, bears completely dominated all commodities. Selling pressure was witnessed throughout the week. Some short covering in many agro commodities witnessed on Friday.
Less demand from processors amid declining export queries exerted pressure on guar complex. Oil seeds and edible oil complex reacted on improvement in dollar amid new crop estimation by Brazil and Argentina generated selling in futures as well spot market across the board. Fall in crude oil prices gave further pressure on prices. Spices made lower trading range last week. Higher Indian parity, lower export queries in the middle of subdued domestic demand compelled spices to trade low.

Speculative activities in turmeric were on high last week. Throughout the week, December contract traded into upper circuits and April contracts traded moreover on lower side, which increased the gap between contracts to more than 3400 level. Wheat futures cooled down owing to increased supply in spot market. Crushing season of sugarcane has already started which has led to a nonstop decline since last three weeks.

Crop Forecasting – “Past – Present – Future Part 2″

Hello Friends here we come up with an extension of our previous blog, “Crop Forecasting – “Past – Present – Future Part 1”.

Crop Forecasting - “Past - Present – Future Part 2

Crop Forecasting - “Past - Present – Future Part 2

Here we would get to know of that what are the procedures of crop estimation survey and on what basis ,final estimates arrived at !

PROCEDURE

In India, the Directorate of Economics and Statistics (DES) releases estimates of area, production and yield in respect of principal crops of food grains, oilseeds, sugarcane, fibers and important commercial and horticulture crops.

DES estimates the crop production by multiplying the area estimates by corresponding yield estimates.

From the point of view of collection of area statistics, the States in the country are divided into three broad categories:

i. States and U.Ts. which have been cad-astrally surveyed and where area and land use statistics are built up as a part of the land records maintained by the revenue agencies (referred to as “Land Record States” or temporarily settled states).

ii. The states where area statistics are collected on the basis of sample surveys.

iii. In the hilly districts where no reporting agency had been functioning, the work of collection of Agricultural Statistics is entrusted with the village headmen of the reporting area.

The second most important component of production statistics is yield rates.

The yield estimates of major crops are obtained through analysis of Crop Cutting Experiments (CCE) conducted under scientifically designed General Crop Estimation Surveys (GCES).

The primary objective of GCES is to obtain fairly reliable estimates of average yield of principal food and non-food crops for each of state and UTs which are important from the point of view of crop production.

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BASIS OF FINAL FIGURES

Final estimates of production based on complete enumeration of area and yield through crop cutting experiments become available much after the crops are actually harvested.

However, the Government requires advance estimates of production for taking various policy decisions relating to pricing, marketing, export/import, distribution, etc.

The government releases four advance estimates of farm production across the year apart from making a final projection.

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First Adv. Estimates for Crop Production: Released

·The Government on 3rd November, 2009 released First Advance Estimates of production of major crops grown in the country.

The production figures of various crops are as follows in Million Tonnes (MT):

·Kharif Foodgrains – 96.63 MT

o Rice – 69.45 MT o Coarse Cereals – 22.76 MT o Maize – 12.61 MT o Jowar – 2.55 MT

o Bajra – 5.83 MT o Kharif Pulses – 4.42 MT o Tur – 2.47 MT o Urad – 0.88 MT

o Moong – 0.52 MT

·Kharif Oilseeds – 15.23 MT

o Soyabean – 8.93 MT o Groundnut – 4.53 MT

·Cotton – 23.66 million bales of 170 kg each.

·Jute & Mesta 10.24 million bales of 180 kg each

·Sugarcane – 249.48 MT

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The first advance estimates put the kharif foodgrains estimates for 2009-10 at 96.63 million tonnes (MT) as against 115.33 MT in the first advance estimate of 2008-09.

Estimated rice output is lowered by 13.8 million tonnes, total coarse cereals output by 4.6 million tonnes while that of pulses is down by 0.3 million tonnes.

The reason for lowering may be that the drought in about half the country has jeopardized the fate of most summer-sown crops.

The low crop estimates are expected to firm up prices & will further impact food prices for key farm commodities, fuelling food inflation higher,which are already witnessing new levels.

Monsoon Deficit Narrows But Just Slightly

monsoon deficit

The rainfall in India seems to have improved a little with the monsoon shortage being at 28% below average for the week ended August 16.

While as on August 12, the overall rainfall in the country was 29% below normal.

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However, rainfall during June 1 to August 16 was at 434.6 mm against the historical average of 602.1 mm while the rainfall in the northwest was 40% below average as on August 16 while in northeast it eased slightly to 32%.

However, the shortfall in central India increased to 21%.

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The Impact Of Significant Below Normal Monsoon:

The current situation definitely does not bode well for the agriculture output.

While in the past, the drought like situation has severely impacted the economic growth (1%-2%), this time the impact could be lower due to:

1. Agri contribution to the overall GDP has been coming down and now stands at ~17% (v/s > 45% in 1970s and > 30% in 1990s)

2. Irrigated land to total land ratio has been improving,

3. National Rural Employment Guarantee Scheme (NREGS) and Farm loan waiver,

4. Significant increase in budgetary allocation to rural development.

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However, if the overall monsoon remains 20-25% below normal and the spatial distribution does not improve, it is likely that FY10 GDP forecasts may be revised downward by 50-100bps.

Increased spending by the Govt and faster implementation of some of the infrastructure projects may limit the damage to ex-agri GDP growth as mentioned above.

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However, Worst affected monsoon deficit areas will have problems of food availability, employment, and drinking water.

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Moreover, India is at a risk of 60-100 basis points drop in GDP growth forecast of 6.4% for FY 2010 while agriculture growth is decreasing by around 5-8% in the current fiscal.

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In addition, rice production during the kharif season this year may decrease by about 10 million tonnes due to declining monsoon in the country while it produced nearly 100 million tonnes of rice in both rabi and kharif seasons in 2008-09.

However, some shortage in production of oilseeds and sugarcane is also expected.

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However, macroeconomic consequences may not be very serious due to the weak monsoon owing to the reasons stated above.

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The Impact Of Significant Below Normal Monsoon: