Quick review of agri sector: UR Associates

UR Associates has come out with its report on agri sectors.

The rainfall during the pre monsoon period (March 1st- May 31st) that stood at 90.3 mm, which was 31% below normal and the delay in advent of Southwest monsoons might have created a lot of uneasiness among our farmer community. However, finally the monsoon rains have entered the Indian Territory on June 5th and has advanced mainly along the western coast and over northeastern states. While the north eastern states have received excess rainfall during the last one week, Western Rajasthan, Jammu & Kashmir and Bihar have received normal rainfall but the rainfall in the rest of the regions has been deficient. Overall the rainfall during the week (June 01-07, 2012) was 16.3 mm which was lower than the normal rainfall of 23.9 mm. Our metrological department has predicted fairly widespread rainfall along west coast and northeastern states over the next one week but the rainfall is expected to remain subdued over interior peninsula during first half of the week. 

This year there is a fear that the El Nino effect might be strong resulting in deficient rainfall in the later half of monsoon. Since, a well distributed rainfall is essential for the kharif crop to show good yields one can only hope that the rainfall will be normal across the country and will be properly distributed through the monsoon reason.
 
Meanwhile the sowing of oil seeds has commenced and has been cultivated in 84,000 hectares till now. Groundnut has been cultivated in 24,200 hectares and sesamum in 38,600 hectares. Pulses have been sown in 1.51 million hectares compared to the target of 1.749 million hectares and sugarcane has been planted in 5.06 million hectares and jute in 0.79 million hectares so far. 

Record rice and wheat levels in the central pool: The Food Corporation of India along with other government agencies has procured a record 32.3 million tonnes of wheat during the Rabi marketing season till 24th May 2012. This has resulted in sudden spike in wheat reserves in the central pool and is at the highest ever level. Even though the rice reserves have slightly fallen, they are still higher compared to the period before January 2012.

Bajaj Hindusthan posted net loss in H1 FY'12: Bajaj Hindusthan reported a net loss of Rs 356.5 million for the first six months of the 2011-12 fiscal compared to net profit of Rs 1,306.8 million in the same period of 2010-11 fiscal. The net sales declined by 35% to Rs 17.57 billion during the period compared to Rs 27.28 billion in the same period last year. "The operating and financial performance of the company during the first half of FY 2011-12 underscores the difficult sugar industry scenario this season characterized by higher sugarcane prices, lower recovery and subdued prices," Bajaj Hindusthan said in a filing to the BSE. Revenue from sugar segment dipped by 22% to Rs 14.43 billion during the period under review due to lower volumes. The company sold about 5.085 million quintals of sugar during the period and the average free sale realization was Rs 29.38 per kg.

Tea production declined 13% in January-March quarter: The lower pre monsoon rainfall has affected the volumes of tea production and has also hit the quality of the Darjeeling tea, which is the highest revenue earner for the industry. According to the Tea Board of India estimates, production during the January-March quarter has fallen 13% to 82.29 million kg from 94.39 million kg in 2011. North India tea production during the period was down 17.6% to 37.52 million kg from 45.58 million kg in the corresponding period of the previous fiscal. Production in South India during the quarter was down 8.32% to 44.77 million kg from 48.84 million kg in 2011.

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