Wheat, sugar, other crops price to remain sluggish in 2017-18: NCML

Upside in mustard seed and maize prices too might be capped

The country's wheat output could drop by 2.31 per cent to 96.1 million tonnes in the 2017-18 crop year due to shift in the area to other crops but it won’t stop prices from remaining sluggish, research done by private agri-commodities management and services firm National Collateral Management Services Ltd (NCML)  said on Tuesday.

Not only wheat, the research showed that chana prices are expected to remain below the Minimum Support Price (MSP) of Rs 4,400 per quintal for most of the season and upside will be capped at Rs 4,600 per quintal.

Sugar prices will trade in the band of Rs 2,780-3,250 per quintal with a pressure on any upper movement.

The price and crop outlook by NCML, India largest private warehousing and weather data provider also showed that though cotton production in 2017-18 might suffer due to pink bollworm attack, the price increase won’t be too sharp due to supply pressures and any upside would be capped at Rs 23,000 a bale while on the downside it might slide upto Rs 18,900 per bale. 

Soybean rates too would consolidate around Rs 3,100-3,400 per quintal levels with a negative bias. 

The MSP of soybean is Rs 3,050 per quintal. 

In case of mustard seed, the study which is based on NCML’s in-house commodity research and market feedback shows that prices are expected to stay around Rs 3,800 per quintal till March and then gradually move upwards to Rs 4,300 per quintal till October 2018.  

The MSP of mustard is Rs 4,000 per quintal for 2018-19 marketing season. 

In case of maize, the research showed that prices are expected to remain sideways to negative around Rs 1,000 per quintal and then move higher towards Rs 1,350 per quintal. The MSP of maize is RS 1425 per quintal for the 2016-17 season.

On the production front, NCML said that although the government is hopeful of a record 100 million tonnes of wheat output this year, their estimates show that output won’t be more than 96.1 million tonnes.

Wheat output stood at 98.38 million tonnes in the 2016-17 crop year, as per official data.

The reason is around 4 per cent lower wheat area sown as the farmers shifted to other crops, majorly chana, it said.

Even soybean production is estimated to decline sharply to 9.15 million tonnes in the rabi season of this year, as against 13.79 million tonnes a year ago.

Rapeseed-mustard seed output is pegged lower at 7.64 million tonnes as against 7.97 million tonnes in the said period.

'Farmers' disillusionment with the low prices last year resulted in them shifting away from rapeseed-mustard seed resulting in its production estimate is lower by 4.2 per cent," the NCML added.

However, production of rice is likely to increase to 14.5 million tonnes in the rabi season of this year as against 13.76 million tonnes in the year-ago.

In case of pulses, gram (chana) output is pegged higher at 9.71 million tonnes in the rabi season of the 2017-18 crop year as against 9.33 million tonnes in the same period last year, due to higher acreage.

"Driven mainly by higher gram production, the total rabi pulses production is expected to increase slightly over last year even as the Kharif pulses registered a significant decline of 9.8 per cent over last year," it said.

Among cash crops, NCML has pegged cotton output at 36.5 million bales for this year, as against 33 million bales in 2016-17.