October futures indicate further rise in chana, barley, chilli.
Prices of agricultural commodities have risen 23 per cent so far this month following poor rains, the main source of irrigation for kharif crops.
Since most parts of the country are dependent on monsoon, its deficiency has resulted in a reduction in area under cultivation for agricultural commodities, including paddy, oilseeds and sugarcane, during the current sowing season. Though the area under maize and pulses has increased, analysts estimate a dramatic decline in their total output because of deficient rain during the sprouting period in July and August. Spices were the most affected with significant price rise on fears of lower crop.
| MOVING NORTH Price indicator (near month contract, Rs/ quintal) | |||
| Commodity | August 1 | August 11 | Change (%) |
| Barley | 900.80 | 983.60 | 9.19 |
| Castorseed | 2537.50 | 2649.50 | 4.41 |
| Chana | 2478.00 | 2514.00 | 1.45 |
| Chilli | 5409.00 | 6516.00 | 20.47 |
| Coriander | 4300.00 | 4651.00 | 8.16 |
| Groundnut (shell) | 2602.00 | 2643.00 | 1.58 |
| Guarseed | 2222.00 | 2298.00 | 3.42 |
| Jeera | 11991.00 | 12472.00 | 4.00 |
| Maize | 932.50 | 1006.50 | 7.94 |
| Mustardseed | 538.20 | 561.25 | 4.28 |
| Pepper | 13514.00 | 15214.00 | 12.58 |
| Potato | 976.00 | 1082.70 | 9.63 |
| Refined soyoil | 458.60 | 486.35 | 6.11 |
| Soybean | 2316.00 | 2415.00 | 4.27 |
| Sugar M | 2490.00 | 2595.00 | 4.22 |
| Turmeric | 6324.00 | 7754.00 | 22.61 |
| Wheat | 1149.40 | 1191.00 | 3.66 |
Turmeric for delivery in September jumped 22.61 per cent, while chilli and pepper went up by 20.47 per cent and 12.58 per cent, respectively. The monsoon scare affected turmeric sowing during this season, said Milan Shah, a Sangli-based trader.
Trends in far month futures indicate that the prices may shoot up further. A study of October futures compared to spot prices shows that barley, chana, chilli and wheat may go up by 5-8 per cent as they are quoted at a premium in October futures while turmeric is at over 10 per cent discount to futures.
Guar, jeera, mustard seeds, black pepper are showing 2-4 per cent premium. This means that futures are not giving the signals for a steep price rise.
The Indian Meteorological Department (IMD) has allowed states to declare drought in rain-deficient districts and has forecast rains to be 87 per cent of the 50-year average (five-year low) as compared to 93 per cent estimated in June.
According to an estimate, about 60 per cent of kharif acreage depends on the monsoon for sowing. Between June 1 and July 9, the country witnessed 34 per cent less rainfall. With underdeveloped irrigation facilities, Indian farmers have little choice but to depend on rains for their livelihood.
A bad monsoon meant a bad harvest and more debt for these farmers, said Mehul Agrawal, a commodity analyst with Sharekhan. An uncertain monsoon has raised the spectre of drought and its adverse impact on agriculture and overall economic growth, Agrawal added.
Poor monsoon has taken a toll on paddy sowing, the main cereal crop of kharif, which declined to 191.30 lakh hectare (ha) as on July 30 against 256.76 lakh ha as on the same day last year. Area under oilseeds too declined to 141.79 lakh ha as on July 30 from 144.66 lakh ha, while sugarcane acreage declined to 42.50 lakh ha from 43.79 lakh ha.
Lower sowing area is directly proportional to overall output of agri commodities. Sugar output was expected to be close to 17 million tonnes or even lower in 2009-10, down from a previous forecast of 19 million tonnes, said Tarun Satsangi, assistant vice-president of Bonanza Commodity.
Sugar prices tested an all-time high of Rs 2,533 per quintal on the NCDEX on August 10 due to tight supply coupled with firm demand. Now, Satsangi believes that its price may test Rs 2,600-2,850 in a few weeks on low acreage.
