Agri Picks Report November 07, 2023: Geojit

commodities

Geojit's report on Agri Picks

The Solvent Extractors' Association of India has signed a memorandum-of-understanding with the Brazilian Association of Vegetable Oil Industries to foster trade opportunities between Indian importers and exporters from Brazil, according to an SEA release. The memorandum was signed on Thursday at the embassy of Brazil in New Delhi. Both countries will exchange information on production periodically and cooperate on the supply side to enhance value addition in oilseeds and its derivatives. India annually imports 16 mln tn of vegetable oil, with a major share of soybean oil of 3.5-4.0 mln tn from Latin America, the agency said in a letter. India imports soybean oil majorly from Brazil, a Latin American country. Brazil exported 1.2 mln tn of soybean oil to India during Jan-Sep. Last year, soybean exports from Brazil were at 1.4 mln tn. Cotton production in India for 2023-24 (Oct-Sep) is seen at its lowest level in 15 years at 29.5 mln bales (1 bale = 170 kg) owing to a drop in acreage and El Nino-induced dry spells in Aug-Sep, said Atul Ganatra, president of the Cotton Association of India. Last year, cotton production in India was at 31.9 mln bales. India's annual cotton consumption is 31.1 mln bales. Due to lower production, the country is likely to have to import 2.2 mln cotton bales, a three-year high, Ganatra told Informist. "The main reason for loss in production is that cotton sowing reduced by 5% compared to last year," Ganatra said. The area under cotton in 2023-24 (Jul-Jun) fell to 12.4 mln ha from 13.1 mln ha in 2022-23, according to the agriculture ministry. Apart from lower acreage, cotton crop yield fell drastically owing to attacks from the pink bollworm across North India. Production of cotton in the north zone, which comprises Punjab, Haryana, and Rajasthan, was initially estimated at 6.3 mln bales by regional associations. "In July, crop conditions in the north zone were very good and the (regional) associations were expecting 6.3 mln bales. But due to this pink bollworm attack, they are now expecting only 3.8-4.3 mln bales," Ganatra had said on Oct 29 at a conference in Hyderabad. Unlike earlier, the Cotton Association of India has not conducted on-ground surveys and has simply collated surveys from regional cotton associations. The association has retained cotton production in the north zone at 4.3 mln bales, the same as last year. The central zone, the country's major cotton-growing region comprising Gujarat, Maharashtra, and Madhya Pradesh, is expected to produce 18.0 mln bales, lower than 19.5 mln bales last year. Gujarat, the country's top cotton grower, is expected to see a 20% loss in yield owing to damage to standing crops in Saurashtra and north Gujarat caused by heavy rain in September, Ganatra said. The association sees cotton production in Gujarat at 8.5 mln bales, against 9.4 mln bales in 2022-23 (Oct-Sep). Maharashtra, the country's second biggest cotton grower, also registered a yield loss of 15-20% on account of poor rainfall in the Marathwada region. The crop is expected at 7.6 mln bales, against 8.0 mln bales in 2022-23. Patchy rains in August left the land dry with no strength in cotton plants to bear high temperatures. Madhya Pradesh reported losses in the first picking on account of heavy rains on standing crops in September. Cotton production in the south zone is also seen lower at 6.8 mln bales, from 7.5 mln bales last year. Telangana, Andhra Pradesh, and Karnataka have reported lower sowing amidst drought-like conditions. Of the 10 states growing cotton, Tamil Nadu is the only one where a little more output is expected this year in December, said Ganatra. In Tamil Nadu, the major portion of the irrigated crop is planted in Sep-Oct, whereas the sowing of the rainfed crop in the southern districts extends up to November. Karnataka, Tamil Nadu, and Andhra Pradesh see summer sowing during Feb-Mar. However, in Karnataka, due to lack of water availability for irrigation, the state might report lower summer sowing and so production might fall further from 1.85 mln bales, said Ganatra.

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