KHARIF PRE-HARVEST PRICE FORECASTS FOR 2013-14

Sell Groundnut upon harvest

            Groundnut is one of the vastly produced oilseed crops as it is cultivated in more than 100 countries in the world and that is why it is referred to as a universal crop. In addition to oil extraction, it is used for making edible products for human consumption, protein rich meal, and fodder for live stock. Groundnut or peanut is commonly called the poor man’s nut. The major exporters of groundnut are Indonesia (45 percent), Philippines (16 percent), Malaysia (14 percent), Persian Gulf (5 percent) and UK (4 percent).

            Gujarat is the leading producer contributing 29.63% of the total production followed by Tamil Nadu (20.78%), Andhra Pradesh (15.23%), Rajasthan (8.23%), Maharashtra (8.23%) and Karnataka (7.82%). Ananthapur, Kurnool, Chittoor, Kadapa and Mahabubnagar districts contribute nearly 80 percent of groundnut production in Andhra Pradesh with a production of 15.52 lakh tonnes.

            The total oil seeds acreage stood at 186.59 lakh hectares against last year’s 162.01 lakh hectares. During 2013-14, groundnut area has increased in all the growing states. Besides ,the weather Gods were also kind enough for an optimistic view of expected groundnut production. This situation is encouraging to release more stocks by the stockists.

            As per the estimates of higher groundnut production coupled with the interaction of market sources, the present prices are likely to continue for some more time and downtrend may set in with the total arrivals.

            To forecast the prices of groundnut for the months of October 2013 to January 2014, econometric analysis of modal prices of groundnut that prevailed in Kurnool market for a period of 14 years and Yemmiganoor market for 11 years was attempted. Besides, international prices of edible oils, Government policy on oil imports and market analysis were also considered to support the price forecasts. These results have indicated that the prices of groundnut would hover around Rs 4000 per Quintal. There are limited chances for the prices to increase. Hence the farmers are recommended to sell groundnut upon harvest.

Sell sunflower upon harvest

            Sunflower oil is mainly used in South and Western India. The educated and higher income group people buy it. A better crop prospects in Ukraine and Russia are certainly going to influence sunflower oil prices. Oil traders expect that the import of sunflower oil will increase to 12.5 lakh tonnes in the next oil year, which begins in November 2013 and ends in October 2014. The acceptability of sunflower oil is increasing among Indians. In India, demand is expected to go up to 12.5 lakh tonnes in the next oil year. For the past three years, domestic sunflower oil production is on the decline as farmers do not find it remunerative to grow Sunflower.

            The major states growing sunflower in India are Karnataka, Andhra Pradesh, Maharashtra, Tamil Nadu and Haryana. The major trading centers for sunflower oil are Mumbai, Chennai, and Hyderabad. In Andhra Pradesh, major sunflower growing districts are Kurnool,  Anantapur, Kadapa, Chittoor, Prakasam and Mahabubnagar.

            To forecast the prices of sunflower for the months of October 2013 to January 2014, an econometric analysis of modal prices of sunflower in Kurnool market for a period of 14 years and Yemmiganoor market for a period of 11 years was carried out. Based on the model and market surveys it is estimated that the prices are likely to range between Rs 3500 to Rs 3800 per Quintal of sunflower seed during the said months. Results of the analysis and the present market sentiments show that the sunflower seed prices may not be increasing in the next three months. Therefore disposal at the current market prices can be a better option.

Record Output of Maize – Sell the maize on harvest

            According to the Ministry of Agriculture, Government of India 80.74 lakh ha have been brought under maize against 73. 37 lakh ha last year comparing the normal area of  72.28 lakh ha. Maize cultivation has increased sharply in the last 4-5 years with the introduction of new hybrids whose yield is high.

            The problem with maize this year is the projection of record crop in the US. In Black Sea region, particularly in Ukraine the crop is good. The world would face a glut as far as maize is concerned. One advantage India enjoys is that it is able to deliver in the smaller lots , while exports from US and other American countries are in bulk only. This year the crop in Myanmar is good. Countries such as Vietnam and Indonesia allow imports of Myanmar  maize at 5 per cent customs duty, whereas the duty for Indian maize is 35 per cent. This could put maize prices under pressure. Maize is one of the fastest growing cereal crops in India and its acreage has increased to 8.07 million hectares with production exceeding 20 million tonnes on the rising demand from  segments such as poultry, livestock feed and starch makers.

            US farmers are poised to reap their biggest- ever maize crop , expanding  global stockpiles to the most in 13 years. The harvest in the largest growing country will jump 30 per cent to 14.036 billion bushels ( 356.5 million tonnes) .

            Global supply of maize is likely to rise following record crop in Argentina and Brazil which compete with India for exports to Vietnam,  Indonesia and Malaysia. With monsoon rains already covering entire country  much ahead of the schedule and the forecast of the normal monsoon, acreage and output in Kharif 2013 is also expected to be higher which would further put pressure  on the prices. States such as Karnataka, Madhya Pradesh and Andhra Pradesh have registered higher acreage over last year.

            Against this background , Agricultural market Intelligence Centre (AMIC) functioning in S. V. Agricultural College , Tirupati has under taken econometric analysis of modal prices of maize at the key market of Nizamabad to forecast the prices of maize during the harvest period from October 2013 to January 2014 . The price of maize per quintal is around MSP i.e Rs. 1300 / qtl. Prices will also be impacted because of higher global supply which may further increase following record crop. The price will be around Minimum Support Price only. There are no chances for prices to increase in the next three months. Hence the farmers are recommended to sell maize upon harvest without going for storage.

Sell soyabean immediately or store upto January, 2014

According to the Ministry of Agriculture, Government of India the area under soyabean has increased to 121.81 lakh hectares this year against 108.42 lakh hectares last year. The country has produced  a record 11.5 million tonnes during 2012-13. Soyabean processors have pegged this year’s crop size at 12.98 million tonnes, 17% less than the Agricultural Ministry’s first advanced estimate of 15.68 million tonnes. This is due to lower yields in Madhya Pradesh, the key producer in the country. Despite the increase in acreage in Madhya Pradesh at 62.60 lakh hectares against previous year’s average of 58.12 lakh hectares the output is expected to be 5.94 million tonnes, a 11% drop over last year’s 6.68 million tonnes. However in Maharashtra, the soyabean production is expected to increase to 4.86 million tonnes from 3.9 million tonnes of last year’s production. Soyabean acreage in Rajasthan is pegged at 12.17 lakh hectares marginally lower than 12.32 lakh hectares of 2012-13. The output in Andhra Pradesh and Karnataka is projected to rise to 3.47 lakh tonnes and 3 lakh tonnes respectively. Looking at global scenario the International Grains Council (IGC) has forecasted soyabean output for 2013-14 at a new high of 285 million tonnes up by 6.3 percent from an estimated 268 million tonnes produced in 2012-13.

Given the global and national scenario, to forecast the prices of soyabean for the months of October 2013 to January 2014, an econometric analysis of modal prices of soyabean in Nizamabad market for a period of nine years was carried out by Agricultural Market Intelligence Centre(AMIC) of Department of Agricultural Economics, S.V.Agricultural College, Tirupati, the results of which indicated that prices are likely to increase by Rs 200 to Rs 300 per quintal by January 2014. Until that period, there is less likelihood of prices to increase. Hence, farmers are recommended to sell immediately or store and sell during January, 2014.

Farm Gate price of Greengram are more likely to be stable

The area under kharif pulses has increased substantially to 99.6 lakh hectares this year against 85.3 lakh hectares last year. However this is lower than the normal area of about 110 lakh hectares. The south-west monsoon has been well spread this year promising an increase of production of pulses by nearly 20 percent.  Kharif production accounts for 35 percent of the annual pulses production in the country. Redgram, Blackgram and Greengram are the major pulses grown in Kharif  season. India is the world’s largest consumer of pulses, with a demand of 18.5 to 20 million tonnes. It is also the world’s biggest producer with an output of 15-18 million tonnes as well as the biggest importer, buying 2.5-3 million tonnes of pulses, which are an important source of protein for most vegetarians in  the country. Greengram, an important pulse crop was supposed to be affected in Rajasthan sending signals of price rise. But since the area under Greengram has increased over the last year an increased output is expected. Therefore the situation does not promise much of an increase in prices in the coming months.

            Under these circumstances the Agricultural Market Intelligence Centre functioning in the Department of Agricultural Economics, S.V.Agricultural college, Tirupati analyzed the likely prices to prevail during the months of October 2013 to December 2013 using econometric analysis of the modal prices of important Greengram markets in Andhra Pradesh. Going by the analytical results ,market survey and the present market sentiments it is confirmed  that the prices are likely to revolve around Rs 4500 to Rs 4800 and immediate sales could better option.