Sowing of Kharif crop improves, fall in yields big concern

The monsoon rainfall was good last week (July 26th-August 1st) at 63.2 mm (which is just 4% below normal), improving the overall monsoon deficiency situation from 22% to 19%. More importantly, the rainfall was better in Northwest, Central and South Peninsula India where the deficiency decreased from 39% to 35%, 22% to 15% and 24% to 23% respectively. Although the overall situation is no where near normal, these incremental improvements in rainfall still leave a ray of hope that the situation will improve further.

Meanwhile the Kharif sowing continues and the gap between the sowing acreage this season and normal sowing acreage is steadily decreasing although it is still less for coarse cereals (3.36 million hectares below normal) and pulses (1.14 million hectares below normal).

Although the sowing is improving the more worrisome factor would be the fall in yields of crops. The deficient rainfall might have already affected the yields of crops and the situation will worsen if the rainfall does not improve during the remaining period of the monsoon season. The fall in yields will result in fall in total crop output resulting in higher prices and inflationary pressures.

EID Parry posts 44% profit on Q1 FY 13 on sugar price rise and monsoon concerns- EID Parry (India) Ltd, a Murugappa Group, has reported a net profit of Rs 719 million in Q1 FY13, up 44%, against Rs 498 million in Q1 FY 12. The recent sugar price rise of 20% over the last one month due to rising demand ahead of festival season and monsoon concerns has helped the company post rising numbers. Cane crushing during the first quarter was at 1.82 Million tonne (up 19% YoY) on a consolidated basis and has sugar inventory of 0.11 MT. However, sugar realization for the quarter has been at Rs 27.4 per kg, levy at Rs 19 per kg and export realization at Rs 28.5 per kg. The company had an ethanol sales volume of 9.2 mn liters on a standalone basis and 14.8 mn liters on a consolidated basis at an average realization of Rs 24.8 litre.

Poor rain may hit cotton output by 12 pc this year: USDA- Cotton production in the country is likely to decline by 12% to 30 million bales in the 2012-13 marketing year starting this month, according to a latest US Department of Agriculture (USDA) report. India had produced a record 34.25 million bales in the 2011-12 marketing year (August-July). In its first estimate in April, the USDA had pegged India's cotton production at 32.3 million bales for 2012-13. It has now revised downwards its forecast to 30 million bales. "While August rains could spur farmers to plant more cotton, persistent dry conditions at this late stage suggest that planted area will drop further. Yields are also expected to drop further to 480 kg per hectare, lowering production to 30 million bales, down 7,00,000 bales from the current estimate," the USDA said in its latest report.

CCI approves JK Sugar's merger with Dhampur Sugar Mills - Competition watchdog CCI has approved the proposed merger of JK Sugar with Dhampur Sugar Mills Ltd (DSML). "The assessment of the proposed combination, the Commission is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore, the Commission approves the proposed combination," Competition Commission of India (CCI) said in its order. JK Sugar has sugarcane crushing capacity of over 4,000 tonnes per day. Dhampur Sugar Mills has capacity to crush 39,500 tonnes of cane per day.