Barring wheat and sugar, all other agri commodities have turned bearish since the beginning of the new year, providing much needed relief to consumers and policy makers.
Prices of agricultural commodities have declined by up to 11 per cent since January 1 which analysts attribute to a downward turn in the global markets. Also, fresh arrivals, including pulses, have provided relief to the government.
Record output estimates of corn and soybean in the US had put pressure on these commodities at the Chicago Board of Trade (CBOT) with most active near-month contracts falling 7.1 per cent and 3.2 per cent to $3.925 per bushel (1 bushel corn = 25.40 kgs) and $9.78 per bushel respectively.
The US Department of Agriculture (USDA) estimates domestic corn output in 2009 at 13.151 billion bushels (yield at 165.2 bushel an acre) as against 12.101 billion bushels (yield at 153.9 bushels an acre) during 2008. Experts believe that soybean prices could continue to decline on record high crop in South America.
In Chicago, wheat and rice market also joined the slump as prices fell 6.4 per cent to $5.3575 per bushel and 3.1 per cent at $14.35 per hundredweight (1 hundredweight = 50.80 kg) respectively.
Robust economic growth in China and India, however, continued persuading consumers of regional commodities to switch to global ones including rice and wheat. Therefore, demand of such commodities would continue to rise in the days to come.
New pulses crop arrivals have started in Maharashtra which, for sometime, will keep prices under pressure. But, since the country is highly dependent on imports, prices would rule in tandem with global movement, a Vashi-based pulses trader Himat Chandra of Trimurthy trader said.
More From This Section
K C Bharatiya, President of Pulses Importers’ Association, however, blamed tenders floated by Indian public sector companies, to import 500,000 tonnes, which created a downward sentiment in the market. The dollar depreciated against the rupee to the level of 45.63 as against 46.62 on January 1. The rise has set a parity for pulses importers, said Bharatiya. He hopes the current price level to be maintained for the time being.
Sugar and wheat, however, were victimised by wrong government policies. Delay in government tenders coupled with higher quotes kept wheat prices firm while unavailability of cane for crushing pushed prices of sugar up. Had the government anticipated the situation in the beginning of crushing season and effected policies accordingly, prices of sugar might have been in control.
Prices of sugar have surged by Rs 800 a quintal in Vashi mandi at Rs 4,400 a quintal on Wednesday from Rs 3,600 a quintal about 12 days ago.
Despite bumper crop at over 78 million tonnes last year against consumption between 74 million tonnes, prices ruled high this year. Since another record crop at 80 million tonnes will hit the market in less than a month, prices are likely to remain upbeat by then. According to a Vashi-based trader, wheat prices have surged by Rs 200 a quintal of MP Sihor variety to Rs 2,400 a quintal in the last couple of days.