Late sowing keeps trade guessing but supply could be staggered
One of the fallouts of the monsoon playing truant in June and July is the effect it has had on coarse cereals cultivation. Monsoon’s late surge has led to some re-sowing, especially that of maize (corn) in Maharashtra and Karnataka, but fingers are crossed over the outcome of it.
This time, the area under coarse cereals came under pressure from other crops, particularly guar in Rajasthan and soyabean in Madhya Pradesh.
All the above factors are borne in the sowing figures from Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.
For example, the area under jowar in Maharashtra, which accounts for 53 per cent of the total production in the country, is down by almost half as on Friday. Again in the case of bajra, the acreage in Rajasthan that accounts for nearly one-third of the total production, is down by 33 per cent.
According to officials, the area under bajra is only 61 per cent of normal area in Gujarat, while in the case of jowar sowing is 33 per cent lower. Even maize, a crop that doesn’t need much water, is seeing a coverage lower by 11 per cent.
In Rajasthan, jowar’s sowing is three per cent lower than last year but maize acreage is 12 per cent lower. Sowing in millets is also lagging by over 10 per cent.
In Maharashtra, area under Bajra is lower by 57 per cent but it higher by 63 per cent in the case of maize. Ragi acreage is down by 16 per cent.
In Madhya Pradesh, jowar cultivation is lower at 3.51 lakh hectares against 4.20 lakh hectares a year ago.
“The coarse cereals crop will be delayed this year due to the growing regions receiving rain late. In regions such as Davangere in Karanataka, the coarse cereal crop was still being sown last week,” said Amit Sachdev, India representative of the US Grains Council.
“Production of coarse cereals, especially that of maize, will be lower than last year. But the fall may not be sharp,” said A. Rajkumar of Alagendran Group of Companies that is into exports of agricultural produce.
Production in the South, particularly Karnataka, could be sharply down but that could be made up by late sowing in Maharashtra, said Rajkumar. The statement is testified by the 63 per cent increase in acreage.
Late sowing in some areas of coarse cereals may not lead to problems since these crops generally need low maintenance. Last year, kharif and rabi production of coarse cereals was 41.91 million tonnes with maize output being 21.33 million tonnes. The output was lower than the record harvest in 2010-11.
“One thing is for sure. Arrivals will be delayed to October-end or early November,” said Rajkumar.
“We don’t know what to expect. But arrivals in markets will not be with a bang,” said Sachdev. “This year, we will see staggered supply of crops such as maize and it is good,” he said.
Arrivals have begun in some areas but they are expected to pick up after Diwali. “We will see batches of arrivals this year. Next, we could see crop from Karnataka, then Maharashtra and by the time they get over, the Tamil Nadu crop sown in October-November will be ready to arrive in markets,” said Rajkumar.
“Such arrivals would mean that prices will rule firm. Though yield could be higher, how much is anyone’s guess,” said Sachdev.
Currently, maize delivered at Chennai is around Rs 17,000-18,000 a tonne. In the growing areas, it is quoted around Rs 13,000 a tonne. Bajra is also ruling around the the same level, while jowar is quoted over Rs 17,000.
Prices would remain firm also in view of a higher minimum support price (MSP) fixed by the Centre. This year, the Government has fixed the MSP for maize and bajra at Rs 11,750 a tonne for maize (up Rs 1,950 over last year). For jowar and ragi, it is higher at Rs 15,000.
Maize is the only coarse cereal that is being exported. Currently, there are no buyers with the rupee gaining against the dollar.
“Prices have gone up by $20-25. They have increased too fast too soon,” said Rajkumar.
But Sachdev said exports will continue and Indian maize prices will be lower than the US or Brazil or Argentine corn. “But it will be hard to say how much India will export,” he said.
On the other hand, global prices have begun to soften with harvest in progress in the US. “It has also affected prices here. But things could change once a clear picture emerges on the US harvest as well as acreage of crops here,” said a trade source.