Pulses Monthly Overview July 2012

Transcription

1 Neha Sinha Economist Knowledge Management, NCDEX Pulses Monthly Overview July 2012 Highlights Area under kharif pulses was lakh hectares as on July 13, 2012 Acreage under kharif pulses stands lower than acreage of lakh hectares as on 15 th July 2010 and lakh hectares as on July 15 th India produced record 7.12 million MT and 6.19 million MT of kharif pulses in and The main kharif pulses producing states of Maharashtra, Madhya Pradesh, Karnataka and Uttar Pradesh are experiencing deficient rainfall Minimum support price of urad was raised 30% to Rs 4,300 per quintal from Rs 3,300 per quintal in the marketing season Decision on hike in MSP of tur and moong has been deferred Annual inflation in pulses group jumped to 20.48% in June 2012 from 16.61% in May India imported Rs 9,434 crore of pulses in higher than Rs 7,386 crore imported in the previous year Chickpea production by major producers Australia and Canada is expected to rise in Area under kharif pulses was lakh hectares as on July 13, 2012, a jump of 6 lakh hectares from a week ago but nearly 38% less than normal acreage for this time of the year. The main kharif pulses are tur, moong and urad. The acreage under kharif pulses stands lower than acreage of lakh hectares as on 15 th July 2010 and lakh hectares as on July 15 th India produced record 7.12 million MT and 6.19 million MT of kharif pulses (Figure 1) in and Slow progress of monsoon has been a dampener to crop sowing; although substantial progress in monsoon in the week ended 11 th July reduced deficiency on a cumulative basis to 22% from 30% till the prior week. Figure 1: Production of Pulses (million MT) Source: Ministry of Agriculture, GOI * Third Advance Estimate

2 The main kharif pulses producing states of Maharashtra, Madhya Pradesh, Karnataka and Uttar Pradesh are experiencing deficient rainfall. As of July 15, 2012, cumulative rainfall deficiency in Maharashtra and Karnataka seems particularly acute with deficiency in most of Karnataka (excluding the coastal belt) was above 50% while rainfall in Madhya Maharashtra, Marathwada and Vidarbha was 40%, 34% and 21% below normal. Minimum support price (MSP) of urad was raised 30% to Rs 4,300 per quintal from Rs 3,300 per quintal in the marketing season Decision on hike in MSP of tur/arahar and moong has been deferred and the Committee on Agricultural Costs and Prices (CACP) has been asked to send a fresh proposal in this regard to the ministry. CACP had initially proposed to raise MSP of moong and tur to Rs 4,500 and Rs 4,000 per quintal for Table 1: Minimum Support Price of Pulses (`/Quintal) Pulses Chana Tur Urad Moong Masur Year MSP Change MSP Change MSP Change MSP Change MSP Change % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Source: Ministry of Agriculture Figure 2: Inflation in Pulses Annual inflation in pulses group jumped to 20.48% in June 2012 from 16.61% in May Inflationary pressure accentuated as the two pulses - chana and masur experienced double digit inflation offsetting negative inflation in moong and urad (Figure 2). Masur experienced two successive months of double digit inflation (11% in May 2012 and 19% in June 2012) after posting multiple months of negative inflation. Tur experienced mild positive inflation of 0.54% in June. Chana continued to experience high inflation of 59% in June Inflation in urad and moong stood at -17% and -6% in June Source: Office of the Economic Adviser, GOI 2

3 Table 2: Trade in Pulses (MT) ,701 2,270, ,200 2,833, ,275 2,474, ,999 3,509, ,693 2,591, (April- Jan)^ NA 2,660,000 ^ Reply to a Query in Parliament Source: CMIE According to Ministry of Commerce and Industry, lakh MT of peas, 2.03 lakh MT of chana, 4.32 lakh MT of urad and moong, 1.12 lakh MT of masur and 4.26 lakh MT of tur has been imported by India during April March In value terms, India imported Rs 9,434 crore of pulses in higher than Rs 7,386 crore imported in the previous year. Dry peas and chickpeas beans accounted for 51% of total imports by value as against share of 32% in the previous year. Sharp depreciation in rupee by 17% from the peak of Rs in April 2012 to the trough of Rs in December 2012 added to the import cost of pulses. Chana (Bengal Gram) Country s chana output is estimated to be 7.4 million MT in as against 8.22 million MT in the previous year. Prices remained firm as lower produce and collective holding back of stocks by farmers in Bikaner supported rise in prices. Surveys in Bikaner have revealed that some farmers have held back stocks in anticipation of rise in prices as observed through marked decline in arrivals during May 2012 as against the same month last year (Figure 4). Arrivals in Bikaner peaks in April and May but arrivals this year broke the usual trend witnessed in this key physical trade centre. Mandis in Bikaner district received arrival of 4,451 MT in May 2012 as against 12,982 MT last year. Consequently, prices in Bikaner rose from an average of Rs 3,607 per quintal in April 2012 to Rs 4,184 in May due to low supplies. Source: Ministry of Agriculture, GOI * Third Advance Estimate Figure 3: Production of Chana Arrivals improved in the following month i.e. June 2012 to 6,043 MT, higher than arrival of 5,703 MT in June 2011 as unlike last year the season s produce had not been fully offloaded in the mandis. Consequently, prices slid to Rs 4,090 in June 2012 since supplies shored up. Prices moved up in early July to near Rs 4,400 per quintal in Bikaner. Arrivals of 3

4 chana in the first 12 days of July 2012 totaled 2,730 MT as against month s total arrival of 1,832 MT in July 2011, another sign that farmers are offloading their produce late at higher prices this season rather than selling the produce immediately after harvest in April and May. Figure 4: Chana Arrivals at Bikaner Fig 5: Spot Price of Chana in Bikaner Futures trading an early warning system Source: Agmarknet Source: Reuters Chana prices in Delhi, a consumption centre of the pulse, rose steadily from Rs 4,210 per quintal in May to Rs 4,248 in June. Prices hovered around Rs 4,523 in early July. Chana prices on futures platform tracked its physical market counterpart reflecting the scarcity of the pulse in the market. August chana is trading close to Rs 4,600 a quintal amid expectation of festival demand during Ramzan. Chana futures with expiry in and September and October 2012 are trading above Rs 4,700 as expected poor supplies in the lean arrival and festival season demand are priced in. Figure 6: Spot versus Near Month Futures Price of Chana Figure 7: Chana - Futures Price Movement 4

5 A fourth of the volume and open interest in NCDEX chana futures was observed during June and first half of July thereby allowing adequate liquidity in mid and far month futures. Figure 8: Near Month Prices, Volume and Open Interest in NCDEX Chana Contract On a month-on-month basis, volume and open interest in NCDEX chana have declined after April indicating significantly lower activity in futures markets after March. The lower volumes are probably a reflection of thin physical market activity in the absence of adequate supplies and likely effect of higher margins and lower position limit imposed as a regulatory measure. Figure 9: Daily Average Monthly Volume and OI 5

6 Fig 10: Price of kabuli chana - Indore Kabuli chana (dollar chana) prices, though higher in 2012 as against 2011, have seen a different price trend than its desi counterpart. The primary reason for this different pattern is abundant supplies of this variety of chana. Produce of kabuli chana is estimated to have jumped phenominally from lakh MT to 6 lakh MT. Madhya Pradesh led the states by producing near 60 per cent of the total domestic produce. Indore, the main trading centre of kabuli chana, saw prices fall slightly from Rs 6,654 per quintal in April 2012 to Rs 6,502 in May 2012 and Rs 5,814 in June as markets received adequate supply of this pulse since output tripled. Source: Agmarknet Prices of yellow pea, viewed as a cheap substitute to chana, remained steady through arrival season of February to April. Yellow peas traded near Rs 2,960 in May and June 2012, but breached the Rs 3,000 mark in early July reflecting rise in end user demand for this substitute. Figure 11: Spot Price Movement of Yellow Peas (Kanpur) Table 3 Trade in Chana (MT) , , , , , , , , (April- Sep) 115, , Table 4: Trade in Dry Pea (MT) ,738, ,215, ,655, ,504, (April- Sep) , Source: DGFT, GOI

7 Outlook on International Production of chana (Desi and Kabuli) and dry peas (yellow pea and green pea) Chickpea production by major producers Australia and Canada is expected to rise in Table 5: Australia and Canada statistics Area (ha) Yield (MT/ha) Production (MT) Export (MT) Canada 51, , , ,000 50,000 95,000 Australia 327, , , , , ,000 Source: ABARES (Australia), Agriculture and Agri-Food Canada (Canada) According to Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), chickpea output in Australia is estimated at 797,000 MT much higher than 485,000 MT produced last year as well as an average produce of 421,000 MT in the last five years. The rise in output is primarily attributed to 70% rise in acreage to 554,000 hectares as against the planted area of 327,000 hectares in Consequent to the estimated rise in production, Australia is expected to export 700,000 MT, 35% higher than the amount shipped last year. In Canada, area sown under chickpea is estimated to increase sharply as farmers are expected to divert area to chickpea after relatively higher crop returns last year. According to Agriculture and Agri-Food Canada, Canada s production and export of chickpea is expected to double to 200,000 MT and 95,000 MT in US chickpea production is expected to rise by 24% to 120,000 MT in Sowing of dry peas is expected to rise by 42% from in Canada due to a higher than expected returns relative to other crops and low carry-in stocks. Production is estimated to rise from 2.12 million MT in to 2.90 million MT in of which 2.30 million MT may be exported. Dry pea production is expected to double to 0.5 million MT in

8 Tur (Red Gram) and Urad (Black Matpe) Figure 12: Spot Price Movement of Tur Figure 13: Spot Price Movement of Urad Figure 14: Production of Tur Figure 15: Production of Urad Source: Ministry of Agriculture, GOI * Third Advance Estimate Table 6: Trade in Tur (MT) , , , , (April- Sep) , Source: DGFT, GOI Source: Ministry of Agriculture, GOI * Third Advance Estimate Disclaimer: This report has been prepared by the Knowledge Management Department of NCDEX Limited for the purpose of information dissemination. The news reported is from the stated sources and does not necessarily reflect the views of NCDEX. The facts are reported from publications and have not been checked for authenticity. NCDEX and its employees will not be responsible for any decision taken by the reader based on this report and are advised to take independent advise on the commodity(is) dealt in this report. 8 Table 7: Trade in Urad (MT) , , , , (April- Sep) , Source: DGFT, GOI