Agri Commodity Technical Report 01 September 2023 - Geojit Financial Services
MARKET NEWS/UPDATES
• Data from the Department of Agriculture and Farmers Welfare show that 105.4 million hectares of land have been planted with kharif crops so far in the 2023–24 (Jul–Jun) season, up from 105.0 million ha during the same time last year. The acreage of paddy, the key grain in the kharif season, was up 4% on year at 38.4 mln ha. Paddy sowing has picked up pace in the last few weeks, aided by rainfall across the country, especially in the east and northeastern parts of the country. Monsoon rains, important for sowing rice in non-irrigated areas, were 7% below the long-period average as of Friday. Since Jun 1, the country has received 611.4 mm rainfall, 7% below the normal weighted average of 657.8 mm for the period. Concerns remain as the key paddy growing regions of east Uttar Pradesh, Bihar, Jharkhand, and West Bengal have received deficient precipitation so far. The weather department has projected that rainfall will be normal to above normal in some parts of northeast India during Aug-Sep. Experts say untimely rainfall could damage the standing crop in the region in the ongoing season. However, rice planting in eastern states of the country has not suffered much this season despite patchy monsoon rainfall and its uneven distribution due to efficient irrigation facilities in the region. The area under coarse cereals was at 17.8 mln ha, slightly up from 17.6 mln ha a year ago, ministry data showed. The area under oilseeds was down 1% at 18.9 mln ha and pulses acreage fell 8% to 11.7 mln ha. Pulses sowing has taken a hit this season because erratic rain in key growing regions made farmers look at other remunerative crops such as soybean and small millets in hope of better returns. Soybean acreage in the country is 1% higher on year as of today, according to the data. Sowing of cotton fell 2% to 12.3 mln ha as of today, the data showed.
• Rainfall over India in September is expected to be normal at 91-109% of the long-period average, with normal to above-normal precipitation over east and northeast India and some areas of east-central and south peninsular regions, the India Meteorological Department on Aug 31 said in its monthly forecast. The weather bureau, however, expects rainfall to be below normal over most of the other parts of the country.
• The normal for September based on data from 1971-2020 is 167.9 mm, according to the weather bureau. The government late on Friday imposed a 20% duty on the export of parboiled rice variety with immediate effect in order to ensure availability of stocks in the domestic market, according to an official notification. Last month, the government had imposed a ban on exports of non-basmati rice amid soaring prices in domestic markets, following a ban on broken rice exports in 2022. According to the official notification, the export duty of 20% on parboiled rice will not be applicable to those shipments, which have entered the custom station before Aug 25, and an order permitting clearance has not been issued by the proper officer. Also, shipments at the customs station with "letter(s) of credit", which have been issued before Aug 25 will be exempted from the 20% duty, the government said in the notification. India accounts for more than 40% of global rice exports, and the latest announcement is likely to reduce shipments to other countries.
• According to private weather forecaster Skymet, India fears a 'drought' this year. A seasonal rainfall deficit of more than 10% of the long-term average is classified as 'drought' or 'deficient'. "El Nino has knocked down the core monsoon month of August, beyond recovery," the private weather agency said. The southwest monsoon season runs from June to September. Skymet had earlier said that there is a possibility that the monsoon season may end in India with a rainfall deficit of more than 10%. El Nino, a natural climate phenomenon marked by warmerthan-average sea surface temperatures in the central and eastern Pacific Ocean near the equator, is typically associated with lower monsoon rains in India. "El Nino impact will continue without dilution and may tighten grip during the second half of September," Skymet said. If rainfall in September is normal or even if there is a modest shortfall of about 10%, the scare of 'drought' can be averted, said Skymet. Since Jun 1, the country has received 628.7 mm of rainfall, 9% below the normal of 693.9 mm for the period, IMD data shows.
• The area under paddy in Telangana this kharif season was 4.9 mln acres as of Aug 23, up 15.2% from that a year ago, according to official data. The overall kharif acreage in the state was 10.9 mln acres, up 2.3% on year but 11.6% lower than the normal acreage for the period. One acre is around 0.40 hectare. Cotton, the major kharif crop of the state, was sown across 4.50 mln acres, down from 4.83 mln acres a year ago. The area under pulses, including red gram, green gram, and black gram, was 17.4% lower on year at 529,362 acres. The area under coarse grains was at 540,449 acres, down from 559,898 acres a year ago. Food grain acreage rose to 5.9 mln acres from 5.4 mln acres in the previous year. Oilseeds were sown across 453,747 acres, higher than 401,986 acres a year ago. The area under soybean was 14% higher on year at 443,625 acres, but that under groundnut down 30% at 7,059 acres. Sugarcane acreage was at 31,925 acres, up from 28,375 acres a year ago, the data showed.
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