UR Associates has come out with its report on agri sector. As per the research firm, The area under sugar cane is expected to decline from 10.22 lakh ha in 2011-12 to about 8 lakh ha in 2012-13 while the sugar production is likely to go down from 90 lakh tonne to about 80 lakh tonnes.
After making a delayed entry on June 5th, the monsoon rains have been anything but satisfactory. The weekly rainfall for the country as a whole during the last one week ending June 15th, 2012 was 15.3 mm, which is 50% below the normal rainfall of 30.6%. The rainfall was below normal across all the regions with the deficit ranging from 44% to 53%. If this trend continues it would a disaster for farmers who heavily rely on monsoon rains for their kharif crops. This would further increase the uneasiness of the policy makers and middle class society who are already grappling with high inflation which shows no signs of receding. The annual rate of inflation, based on monthly wholesale price index rose 7.55% during the month of May compared to 7.23% inflation in April, 2012. The inflation in food articles was higher at 10.74% with inflation in pulses at 16.61% and vegetables at 49.43%. However, Indian Meteorological Department has predicted that monsoon will further advance in the coming weeks into interior regions and hopefully should pickup as the week progresses. The weekend rains have already been strong in certain parts of the country and we hope that it picks in the days to come.
Meanwhile, our government has increased the minimum support price of kharif crops, in order to provide some relief and provide some savings for farmers who are grappling with increased labour costs and higher fertilizer prices which have increased exponentially over the last one year. The government has increased the MSP of paddy (common) and paddy (Grade A) by over 15% to Rs1,250 per quintal. The prices of Jowar (hybrid) and Ragi have been raised by 53.1% and 42.9% respectively to Rs 1,500. The price of urad has been increased by 30.3% to Rs 4,300 per quintal and prices of groundnut-in-shell, sunflowerseed, sesamum and nigerseed have been raised in the range of 21% to 30%. The MSP on cotton has been raised by 18.2% and 28.6% to Rs 3,300 and Rs 2,800 for the long staple and medium staple varieties. However, the flip side to this move is the higher food subsidy burden on the government which will further deplete its already weakening financial resources. Also, consumers will have to shell out more for pulses and oil seeds which are already witnessing elevated inflation levels.
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READ MORE ON UR Associates, agri sectors, sugar cane, inflation, MSP, McLeod Russel, UK based Borelli Tea Holdings Ltd, NSL, IPO, M Prabhakar Rao
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