The National Agricultural Cooperative Marketing Federation of India (Nafed) has procured less than 10% of its target of five lakh tonnes of onions for price stabilization but aims to meet the goal by offering competitive prices to farmers. As the Rabi-2024 onion harvest began, the government instructed Nafed and the National Cooperative Consumers' Federation (NCCF) to procure onions directly from farmers. Rabi onions, making up 72-75% of annual production, have a superior shelf life compared to Kharif onions, ensuring year-round availability. Nafed member Keda Tanaji Aher stated that procurement agencies could not reach their target because government rates were lower than market prices, prompting farmers to sell elsewhere. The government now offers ₹2,555 per quintal, but Maharashtra State Onion Growers' Association President Bharat Dighole is skeptical, pointing out that market prices are higher and urging the government to offer better rates. To achieve the procurement target under the Price Stabilisation Fund, Nafed and NCCF are working with local agencies to facilitate procurement and storage. The Department of Consumer Affairs has also increased the quantity of onions to be irradiated and cold-stored, with support from the Bhabha Atomic Research Centre (BARC).
Despite a surplus stock and export restrictions, rice inflation has remained in double digits since October 2022. The food ministry is conducting a comprehensive assessment to map the consumption and production of high-value non-basmati rice varieties like Sona Masuri and Ponni. This research aims to identify demand-supply gaps and production patterns. Retail rice prices rose by 12.51% in April 2024, contributing to overall cereal inflation. The government has initiated measures such as subsidized rice sales but faces challenges due to a lack of variety-specific data. The Food Corporation of India (FCI) holds significant rice stocks, but quality concerns and procurement issues persist.
In the first six months of the oil year 2023-24, India's edible oil imports fell by 11.65% to 70.69 lakh tonnes, compared to 80.02 lakh tonnes in the same period last year. However, April saw a 27.67% increase in imports with 13.04 lakh tonnes. Lower international prices in April spurred the rise, with reductions in palm and soybean oils. Experts predict fluctuating future prices influenced by various global factors. India also saw changes in the specific types of oils imported, with variations in palm oil, soybean oil, and sunflower oil imports during the period.
This year's wheat production is expected to exceed that of the last two years, with estimates ranging from 105 to 112.5 million tonnes. Despite this, farmers are withholding wheat from markets in anticipation of higher prices, affecting millers and traders. The situation is exacerbated by record yields in some regions like Punjab and artificial price inflations, with current market prices exceeding government support prices. As a result, procurement levels are below last year's, and strategic withholding by traders aims to fetch better prices later. Some regional policies and quality issues in places like Madhya Pradesh also complicate the market dynamics, with suggestions that permitting imports could help lower domestic prices.
With chana prices exceeding the Minimum Support Price (MSP), the government has directed cooperatives Nafed and NCCF to buy the crop from farmers in Madhya Pradesh, Rajasthan, and Maharashtra using market-driven prices under mechanisms like the Minimum Assured Procurement Price (MAPP). Procurement is set to begin next week with prices ranging from ₹5,900 to ₹6,035 per quintal, compared to the MSP of ₹5,440. This move aims to stabilize the market and support farmers against price volatility. Current market conditions have seen chana trading between ₹5,800 and ₹6,000 per quintal, with procurement targets falling short due to high market prices.
Rice procurement in India for the 2023-24 season reached 47.03 million tonnes by April 30, a slight decrease of 6% compared to last year's 49.88 million tonnes. Despite a 38% reduction in West Bengal, the overall procurement is bolstered by a significant increase from the rabi crop in Telangana. The government aims to meet the annual requirement of 40-41 million tonnes for welfare programs under the National Food Security Act, anticipating a surplus carryover into the next year. The target for this year includes 52.485 million tonnes from the kharif crop and 10.315 million tonnes from the rabi season. While kharif procurement in some states like Andhra Pradesh and Uttar Pradesh fell short of targets, Chhattisgarh exceeded its goal, contributing a record 8.3 million tonnes to the Central Pool. The procurement season continues in some states, with the situation regarding wheat allocations to be clearer post the wheat procurement season.
Turmeric futures are on the rise again due to lower production this year, leading to demand surpassing supplies. Traders and industry insiders report a surge in futures, with prices fluctuating between 18,500 and 19,500 per quintal. This sharp increase, from ₹16,000 to *20,000, reflects the imbalance between demand and supply. Concerns about tight supplies persist, with uncertainties regarding May's supply levels. Experts suggest that timely monsoon rains could alleviate prices to levels around ¥17,000-18,000. Despite good export demand, high prices hinder growth. The resurgence of La Nina is anticipated to influence next year's crop and price dynamics, with hopes pinned on favorable monsoon conditions.
Wheat procurement in India has accelerated, reducing the deficit from 25% a week ago to 8% as of April 30, with total procurement reaching 205.42 lakh tonnes compared to 222.89 lakh tonnes the previous year. However, lower-than-expected procurement in key states like Madhya Pradesh, Rajasthan, and Uttar Pradesh may challenge the central government's target of 372.9 lakh tonnes for the season. Despite increases in some areas, significant drops in others and potential holding back of grain by farmers could impact the overall procurement goals. The government has relaxed quality specifications and offered bonuses to boost purchases in certain states.
In the fiscal year 2023-24, the value of cashew exports hit a seven-year low of $339.21 million, down 4.8% from the previous year's $356.32 million. In rupee terms, exports declined by 2.09% to ₹2,808.80 crore. Volume decreased to 60,222 tonnes from last year's 59,575 tonnes. The decline is attributed to increased local processing in African countries and higher processing costs in India. Key markets for Indian cashew kernels included the UAE, Japan, Netherlands, Spain, and Saudi Arabia.
Millet prices have surged due to strong demand, government initiatives, social media influence, and a slight drop in production. Inflation for ragi and related products hit 16.6% in March, nearly the highest in over six years. Ragi's production fell from 1.69 million tonnes in 2022-23 to 1.39 million tonnes in 2023-24, even as the government promoted millet consumption. Meanwhile, jowar saw a modest increase in both production and cultivation area, with a production of 4.03 million tonnes in 2023-24. Food companies, including major players like ITC, Tata, and Nestle, are expanding their millet-based product lines due to rising health consciousness. The government continues to boost millet consumption through initiatives like the Shree Anna Scheme, and despite a forecast for better monsoon rains, ongoing high demand and climate challenges may continue to pressure millet supply and prices.
Ravi Gupta, Vice-Chairman of All India Sugar Trade Association (AISTA), believes there's no shortage of ethanol in India despite restrictions on sugarcane juice and B-heavy molasses. He suggests permitting 1 million tonnes of sugar exports this season, anticipating a surplus of over 7 mt. Gupta emphasizes sustainable growth in the sugar sector, urging for improved mechanization and varietal enhancement. He also stresses aligning sugar prices with sugarcane rates for industry development. Despite current ethanol blending at 12%, Gupta remains optimistic about reaching the 20% target by 2025-26, aided by government interventions and surplus sugar stocks. With favorable monsoon forecasts, he foresees potential for expanded ethanol production and advocates for allowing sugar exports to manage surplus stocks.
The Spices Board has issued a stern warning to cardamom dealers, urging them not to purchase capsules from unauthorized traders. They emphasized adherence to the Cardamom Licensing and Marketing Rules of 1987, which require licensed dealers to buy cardamom only from registered estate owners/growers or licensed auctioneers. Any entity conducting cardamom auctions without a license from the Spices Board will face consequences according to the rules. Licensed dealers are now required to obtain an auctioneer license from the board before participating in any cardamom auctions, whether electronic or manual, to maintain transparency and prevent financial complications.
Prolonged dry spells and higher than normal temperatures in India's main coffee regions, including Karnataka and Kerala, threaten the 2024-25 crop, particularly after insufficient pre-monsoon rainfall. Key districts like Kodagu, Chikkamagaluru, Hassan, and Wayanad have experienced significant rainfall shortages, impacting crucial growth stages of coffee plants. The drought conditions also foster the spread of the white stem borer, further endangering the crop, especially the arabica variety. Growers are concerned as these adverse conditions come despite this year's high coffee prices and global demand. Immediate rainfall is critical to mitigate these impacts and preserve the health of the upcoming crop cycle.
During FY24, India's oilmeals export surged by 13% in quantity and 35% in value, as per data from the Solvent Extractors' Association of India (SEA). India exported 48.85 lakh tonnes (lt) of oilmeals worth 15,370 crore in the financial year 2023-24, a significant increase from the previous year's 43.36 lt valued at 11,400 crore. BV Mehta, Executive Director of SEA, highlighted that this marks the highest export volume and value since 2013-14. The export of soyabean meal notably revived during the period, reaching 21.33 lt compared to 10.22 lt in the preceding year, making Indian soyabean meal highly competitive internationally. Despite this, the competitiveness of Indian soyabean meal faced challenges, with Argentine soyabean meal offering strong competition. Export of rapeseed meal decreased slightly to 22.13 lt from 22.97 lt, attributed to growing competition from soyabean meal globally. The ban on exports from July 28, 2023, to July 31, 2024, particularly affected the ricebran processing industry in eastern India, potentially impacting rice milling and ricebran oil production. Despite fluctuations in prices and a slight appreciation of the rupee against the dollar, Bangladesh emerged as the largest importer of Indian oilmeals, followed by South Korea and Thailand. Notably, Iran emerged as a significant importer of Indian soyabean meal during FY24.
After facing a turbulent year in the last fiscal, the cotton yarn spinning industry is poised for relief in the current fiscal. Projections from CRISIL Ratings suggest that operating margins for cotton yarn spinners are anticipated to rebound by 150-200 basis points, following a decade-low performance of 8.5-9% last fiscal. This projection is supported by an analysis of 95 cotton yarn spinners, representing 35-40% of industry revenue. The profitability was hampered in fiscal 2024 due to diminished cotton yarn spreads and inventory losses.
Despite incentives to boost domestic production, India's pulse imports soared to USD 3.74 billion in 2023-24, nearly doubling from the previous year's 24.5 lakh tonnes to over 45 lakh tonnes. Government efforts include negotiating long-term import contracts with Brazil, Argentina, Mozambique, Tanzania, and Myanmar to stabilize prices. Amid rising inflation, with pulses increasing by up to 19% earlier this year, the government has removed import duties on some pulses and set stock limits to curb hoarding. Yet, domestic pulse production is declining, with experts citing erratic weather and a significant reduction in sowing areas as major factors.
A surge in export demand has led to a notable increase in prices of orthodox teas at Kochi auctions, drawing active participation from buyers in North India. Traders attribute this rise to a shortage of tea in the North during winter holidays, prompting buyers to turn to southern sources, thereby driving up demand. In sale 15, the demand remained robust, with sales reaching 92 percent of the offered quantity of 174,778 kg. The average price realization saw an uptick of ₹2 per kg, reaching ₹164 compared to ₹162 in the previous week. Auctioneers Forbes, Ewart & Figgis noted active participation from exporters to CIS and Middle East countries, as well as Tunisia. Whole leaf and Fannings saw firm to dearer prices owing to quality considerations. Additionally, there was significant demand for CTC leaf, with 83 percent of the offered quantity of 46,000 kg being sold. Best and medium brokens commanded firm to dearer prices, supported by major packeteers and buyers from Kerala. In the realm of CTC dust, select best liquoring teas witnessed firm to dearer trends, particularly in SRD grade. The total CTC quantity offered was 530,029 kg, with 80 percent being sold, and blenders collectively absorbed 62 percent of the total quantity sold.
India's robusta coffee industry is seeing historic highs, with prices hitting Rs 10,080 per 50 kg bag, marking a significant milestone since the establishment of coffee estates in the Western Ghats region in the 1860s. This surge is a boon for Indian coffee growers who heavily rely on robusta due to its cost-effectiveness. Unlike the traditionally stable Arabica prices, which are known for their smooth taste, robusta prices have remained relatively low, fluctuating between Rs 2,500 to Rs 3,500 per 50 kg bag over the past 15 years. Despite a slight dip in export quantities by 2.5% to 3.88 lakh tonnes compared to the previous year, the Indian coffee sector is benefitting from soaring global robusta prices, driven by supply disruptions in major producing countries like Vietnam and Brazil. Mr. M J Dinesh, Chairman of the Coffee Board, attributes this to global temperature changes impacting coffee production in Vietnam, which is boosting India's instant coffee market and benefiting small growers and laborers. This surge in robusta prices has led to a 20% increase in per unit realization for Indian exporters, reaching ₹2.7 lakh per tonne during the 2023-24 period, up from ₹2.26 lakh in the previous fiscal year.
The US has profited from India's restrictions on rice exports, causing rough rice futures prices on the Chicago Board of Trade (CBOT) to surge to $18.66 per cwt ($367.30/tonne) in February. Research agency BMI attributes this price increase to heightened export demand for US rice, prompting them to raise their price forecast for CBOT-listed second-month rough rice futures to $16.50. Additionally, they predict a price outlook of $15.85 per cwt for 2025. The International Grains Council anticipates a 3% decline in global rice trade in 2024 due to India's export ban, while the US Department of Agriculture forecasts record world consumption in 2023-24 despite reductions in Chinese consumption. Consequently, the global rice market is expected to return to surplus in 2024-25, with prices possibly easing from 2026 onwards.
During the first six months of the 2023-24 oil year, India's soyameal exports surged by 14% to 13.47 lakh tonnes, compared to 11.79 lakh tonnes in the same period last year, driven by robust demand from Asian nations. The Soyabean Processors Association of India (SOPA) estimates total soyameal exports for the oil year to reach around 18 lakh tonnes. DN Pathak, Executive Director of SOPA, highlighted Iran, UAE, Bangladesh, and Nepal as the primary destinations for Indian soyameal exports. Despite higher production of soyameal at 53.16 lakh tonnes, domestic feed and food sector offtake saw slight declines compared to the previous year. Soyameal stocks stood at 1.80 lakh tonnes as of April 1. Market arrivals of soyabean remained steady, while SOPA projected a crop size of 118.74 lakh tonnes for the 2023-24 season. Soyabean crushing for the first six months reached 67.50 lakh tonnes, slightly up from the previous year. Current soyabean stocks are estimated at 64.83 lakh tonnes as of April 1, 2024.
Nafed's copra procurement from the open market has driven up coconut oil prices in Kerala and Tamil Nadu after a prolonged period. The initiative, initiated before the Lok Sabha polls, coupled with festive demand, is expected to sustain prices until government procurement concludes. Despite the harvest season's start in major producing regions, upcountry demand remains low. The government has set minimum support prices for copra, aiming to stabilize the market. However, concerns persist about how long the current price surge can last, given anticipated copra arrivals and potential price declines. Meanwhile, sunflower and soya oil prices are slightly lower, driven by increased sunflower oil imports amid falling palm oil inventories. Overall, consumers benefit from stable retail prices across most edible oils, except gingely oil, providing them with various options.
India's National Cooperative Export Ltd, backed by the nation's top cooperative organizations, is set to export 1,600 tonnes of white rice to Singapore after successful negotiations with the country's aggregator. Jayen Mehta, Managing Director of Gujarat Cooperative Milk Marketing Federation (GCMMF), stated plans for an additional 2,000-tonne export. Singapore, though not facing rice shortages, seeks Indian exports for food security. Despite holding orders worth ₹10,000 crore for various commodities, including rice, customs duty issues hamper exports. In response to lower domestic production and rising food prices, India had banned white rice
The government announced measures to tackle hoarding and price hikes in pulses, requiring traders, importers, millers, and stockholders to declare stocks starting April 15. Suspecting significant quantities of imported pulses are held in customs warehouses, the Department of Consumer Affairs initiated meetings to evaluate real-time stock positions. Secretary Nidhi Khare stated that while there's vigilance, there's no immediate concern regarding chana output, with crop yields seemingly intact despite a slight decrease in total output. Recent crop assessments in Gujarat indicate stable chana yields, leading to market price softening. However, rising demand for chana, particularly from state welfare schemes, strains the available buffer stock. The government currently maintains a 1 MT raw chana buffer acquired under the price stabilization fund, with Nafed procuring from farmers to replenish it. Discussions are underway with states to enhance procurement strategies, focusing on non-traditional pulse-growing regions. Additionally, duty-free import of yellow peas, an alternative to chana, was extended till June 30 to meet demand.
Amidst a ban on onion exports, the Indian government has allowed shipments to the UAE, resulting in outrage among farmers and traders. They claim that while Indian farmers are paid a meager ₹12 to ₹15 per kilogram for onions destined for export, the same onions fetch over ₹120 per kilogram in UAE markets. This stark difference in prices has led to windfall profits for select importers in the UAE. Despite concerns over a potential domestic shortage, the government has extended the export ban indefinitely but has permitted limited exports to certain countries, including the UAE. Recent data shows that while global onion prices have surged, Indian exports to the UAE have been significantly lower, leading to suspicions of profiteering. The exports are managed by the National Cooperative Exports Limited (NCEL), with procurement conducted through an e-tendering process. However, exporters allege that the prices set for exports are considerably below international rates, raising questions about the transparency of the process. Despite inquiries from various sources, government officials have remained silent on the matter. Exporters fear the existence of an importer-exporter nexus, advocating for a system that aligns export prices with market rates.
Rice procurement by the Food Corporation of India (FCI) has seen significant declines in Andhra Pradesh by 36% and Telangana by 28%. Overall, procurement has reached 45.44 million tonnes as of March 31, down 7.3% from the previous year's 49.01 million tonnes. However, Chhattisgarh exceeded expectations, raising concerns about the procurement process. With procurement ongoing in certain states until April and even June, the government aims to acquire an additional 4-5 million tonnes. Procurement has concluded in some northern and western states, with Punjab and Haryana reporting slight increases. Conversely, Uttar Pradesh and Telangana experienced decreases in procurement. The Agriculture Ministry estimates a 1% decrease in rice production for the 2023-24 crop year compared to the previous year. Rice procurement plays a crucial role in the government's food security program, having replaced wheat in several states in 2021-22.
In preparation for the summer season and heightened demand during the election campaign, the Indian Government has increased the monthly sugar quota to 25 lakh tonnes (lt) for April, up from 23.5 lt in March and 22 lt in February. The government determines the monthly sugar allocation for domestic sales and distributes quotas to individual mills accordingly. According to the Food Ministry’s notification, Maharashtra's 198 mills have been allocated 9.37 lt, Uttar Pradesh's 119 mills received 7.28 lt, and Karnataka's 71 mills got 4.10 lt for April. Between October 2023 and April 2024, a total of 168.5 lt sugar has been allocated to mills for domestic sales, with reports of some mills exceeding their quotas in December and January. The increased demand due to summer and the election campaign has influenced the April quota decision. There's speculation about potential further allocations for April 2024, as seen in previous years. The government has also reduced the allocation of some sugar mills by 25 percent after they exceeded their January quotas, affecting 36 mills. Despite requests, some mills' quotas remain unchanged due to factors such as overproduction and quota violations. The government has instructed all mills to verify their stocks by March 31 and submit necessary forms by April 15 to ensure quota allocation for May.
Current temperature increases are not posing a threat to India's wheat crop, particularly in key producing states like Punjab, Haryana, Uttar Pradesh, and Rajasthan, where harvesting is largely completed. Gyanendra Singh from IIWBR reassures that temperatures below 38°C pose no risk, and harvesting is expected to proceed smoothly. IMD data shows stable temperatures in northwest India, with slight fluctuations expected. The government anticipates a robust wheat harvest, with procurement targets set accordingly, including increased targets for states like Punjab and Uttar Pradesh. Early procurement efforts have already begun, with significant purchases made in Madhya Pradesh and Rajasthan ahead of the usual schedule.
Chana prices experienced a slight decrease in March compared to the previous month, attributed to various factors including the government's initiative to offer Bharat dal at ₹60 a kg, heightened imports of yellow peas, and increased market arrivals of the new chana crop. According to Agmarknet data, average mandi prices have decreased across most producing states this month, with several mandis in Madhya Pradesh and Rajasthan recording prices below or around the minimum support price (MSP). Bimal Kothari, Chairman of the India Pulses and Grains Association, noted that chana prices remain stable, with demand being sluggish. Expectations suggest a surge in chana arrivals post-Holi, likely limiting price increases due to ample supply and ongoing yellow pea imports, which have been extended duty-free until April. Rahul Chauhan of Igrain India highlighted the significant imports of yellow peas primarily from Russia and Canada, contributing to the easing price trend alongside government interventions to ensure availability of chana dal in the retail market. Additionally, government estimates forecast chana production at 121.61 lakh tonnes for the 2023-24 rabi season.
Customs authorities are demanding duty differentials from domestic rice exporters for shipments made over the past 18 months, posing a significant threat to India's rice exports. This demand follows the imposition of a 20% export duty on white rice in September 2022 and parboiled rice in August 2023, aimed at stabilizing domestic prices before key elections in 2024. Exporters, who were originally paying duties based on the free on board (FOB) value, are now required to factor in transaction values, resulting in additional duty payments. The estimated total cost of this unexpected duty is approximately 1,500 crore rupees. Exporters, particularly those in Andhra Pradesh, express concern over their inability to afford these unexpected expenses, which could force them out of business. Despite inquiries, neither the finance ministry nor the Central Board of Indirect Taxes and Customs have responded. This move puts immense financial strain on exporters, as they face demands for additional duties that overseas buyers are unlikely to cover, jeopardizing the viability of their operations.
Wheat stocks in the central pool have dwindled to a 16-year low of 7.73 million tonnes due to decreased procurement over the past two years and aggressive open market sales by the Food Corporation of India (FCI) this fiscal year. Sources indicate that stocks may dangerously hover near the buffer level of 7.46 million tonnes by April 1. The last time stocks were this low was in 2008 when they dropped to 5.8 million tonnes. Despite early commencement of wheat procurement in Rajasthan and Madhya Pradesh for the 2024-25 season, concerns persist. Government procurement under the minimum support price (MSP) scheme hit a record low of 18.8 million tonnes in the 2022-23 season but rose by around 40% to 26.2 million tonnes in 2023-24. Factors such as lower production and increased domestic demand have led to reduced MSP operations. The government's halt of open market wheat sales aims to stabilize retail prices. Despite projections of improved wheat output, maintaining sufficient stocks for future sales remains a priority.