Kharif pre harvest price forecasts for 2014-15

Groundnut prices may likely move above MSP in view of harvest shortfall

Groundnut is one of the major oil seed 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%). Madhya Pradesh and Tamil Nadu are the only states that have registered an increase in acreage under groundnut by about 5 - 6 per cent, while all other major cultivating states have recorded a fall in acreage. The normal area in Andhra Pradesh is 10.90 lakh ha. and the  area sown in kharif 2014-15 was 7.57 lakh ha. constituting 69.4 per cent. 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.

            To forecast the prices of groundnut for the months of November, 2014 to January, 2015 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. In view of looming harvest shortfall, coupled with econometric analysis and market survey, the prices are likely to remain firm and potentially move above the MSP in the coming months.

 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. 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 November, 2014 to January 2015, 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 3700 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.

 Maize prices likely to be around MSP from Nov 2014 to January 2015

It is expected a second straight record crop of maize that will boost domestic stockpiles already at a four-year high. Output in the U.S.A will jump 2.8 per cent to 14.314 billion bushels, the most ever. Improved output in the U.S will help boost global inventories by 8 per cent next year to 182.65 million tonnes, the highest in 15 years. Rising grain output in the U.S, the world’s largest producer, is keeping global food prices in check while boosting profit for meat producers. The picture is rosy in Brazil and Argentina too. But in India, the kharif output this year to be lower by 10-15 per cent on lower acreage. Delayed and deficit monsoon has hit the kharif acreage and the maize was planted in 57.85 lakhs hectares approximately, some 17 lakh hectares lower than last year. States such as, Karnataka and Punjab have seen a lower planting this kharif. Besidesdeficient rains, farmers have shifted to other crops such as cotton and pulses. In Andhra Pradesh and Telangana the area sown was 0.92 and 4.98 lakh he respectively which was a little more than normal area.

            Under these circumstances the Agricultural Market Intelligence Centre (AMIC) of the Department of Agricultural Economics, S.V. Agricultural College, Tirupati, has forecasted the prices of maize for the period from November 2014 to January 2015 using modal prices of maize for 14 years related to the Nizamabad Market. The analysis was also supported by market surveys. The results of analysis along with the market survey and global maize scenario have revealed that the price would be close to MSP of Rs.1310 during the months of November to January 2015. Farmers are advised to take selling decision accordingly.

Greengram price to rise in future

Kharif acreage continues to trail last year’s levels for most of the crops. The decline in the acreage is mainly on account of poor rain fall this year. Production of key crops such as are rice, pulses, oilseeds and coorse cereals may be impacted an account of lower acreage and subsequent erratic rainfall.  Pulses acreage is down by about 6 per cent at 97.24 lakh ha. over comparing 103.69 lakh ha. last year.The kharif 2014 pulses production target is 7 millions tonnes, something that may not be achieved.  In each of the last two years, actual out put in the kharif season was 6 millions tonnes. Redgram, blackgram and greengram are the major pulses grown in kharif season. Normal area under greengram in Andhra Pradesh is 0.28 lakhs ha; While the same in Telangana is 1.53 lakh ha. But the actual area sown was 0.09 lakhs in in Andhra Pradesh and 0.81 lakhs ha. in Telangana, which was 33 and 53 per cent of the normal area respectively.

            To help the farmers to take selling decision of greengram, 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 November, 2014 to January, 2015 using econometric analysis of the modal prices of Tandur an important greengram market in Andhra Pradesh. Going by the analytical results, market surveys and the present market sentiments it is understood that the price are likely to have an upward trend from Rs.6000 in the  months of December 2014 and January, 2015. Selling in January, 2015 can be a better option.

Farmers can dispose soybean in December, 2014 or January, 2015

The US is expected to continue to retain the tag of the largest producer with 103.846 million tonnes of production against 89.507 million tonnes in 2013-14. Increased sowing and favorable climatic conditions in the US, especially the Midwest which received good rains have helped boost the yield due to favorable climatic. Brazil is expected continue to remain the second-largest producer with a projected output of 91 million tonnes next season.  Argentina, on the other hand, is expected to maintain its output at last year’s levels of 54 million tones. In domestic market soybean output is expected to decline. Soybean acreage is down from the previous year by 12 lakh ha.  Erratic and inadequate rainfall widely expected to adversely affect yield too.  Compared to last year’s output of 12 million tones it is likely to fall even lower this year, possibly closer to 10 million tones.

The area sown in Telangana state in 2014-15 was 2.71 lakh ha. against 2.84 lakh ha. in 2013-14.  Supply side continues to remain tight due to last year’s lower output.

Given the global and national scenario, to forecast the prices of soybean for the month of November, 2014 to January, 2015 econometric analysis of model prices of soybean in Nizamabad market for a period of nine years was carried out by Agriculture Market Intelligence Centre (AMIC) of Department of Agrl. Economics, S.V. Agriculture College, Tirupati, the results of indicated that prices are likely to increase to Rs. 3200 to 3300 by December, 2014 and January, 2015.  Hence, farmers can take selling decision accordingly.