Agri Picks Report October 17, 2024: Geojit Financial Services

commodities

Geojit Financial Services's report on Daily Agri Picks

The Union Cabinet Wednesday approved a 2-7% hike in the minimum support price of six rabi crops for the marketing season starting in April. The MSP hike will cost the government an additional INR 876.57 billion, according to the announcement. The minimum support price for wheat, a key rabi crop, was increased by INR 150 or 7% to INR 2,425 per 100 kg, while that of chana, a largest rabi pulse, was raised by 4% or INR 210 to INR 5,650 per 100 kg, as per the announcement. Wheat, the crucial rabi crop, accounts for over 70% of the rabi food grain output. The hike for wheat has come at a time when the country is facing significant price pressures in the grain with low availability in markets. The government's wheat reserves have been falling over the past two years as it failed to reach its procurement targets in rabi marketing seasons 2022-23 (Apr-Mar) and 2023-24, with heatwaves reducing the size of the crop. The government this year is looking to make up for the depleted stocks and is promoting larger sowing on account of sustained soil moisture due to a good southwest monsoon. The government, as of Oct. 1, had a stock of 23.80 million tonnes, a shade above the buffer norm of 20.52 million tonnes prescribed for Oct-Dec. The stock was down 5.4% on month and 1.0% on year. Meanwhile, the hike in chana prices is crucial as the centre is looking to increase its acreage and promote farmers to plant more of it. Chana sowing fell significantly last year to 25.8 million hectares in 2023-24 from 30.7 million hectares in 2021-22. The Cabinet also approved increasing the minimum support price of mustard by 5% or 300 rupees to INR 5,950 per 100 kg and for masur by 4% or INR 275 to INR 6,700 per 100 kg. The support price for barley has been increased by 7% or INR 130 to INR 1,980 per 100 kg, while that of safflower has been raised by 2% or INR 140 to INR 5,940 per 100 kg. "The increase in MSP for mandated rabi crops for marketing season 2025-26 is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 1.5 times of the all-India weighted average cost of production," the government said in an official release. Minimum support prices, the price at which the government buys crops from farmers in case market prices fall, gives security and direction to growers in terms of realisation of their produce. • The southwest monsoon withdrew from the entire country on Wednesday, private weather agency Skymet said in a report. "The depression off Oman's coast is expected to weaken gradually in a well-marked low-pressure area," it said. The India Meteorological Department said the southwest monsoon had withdrawn from the entire country on Tuesday.

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17102024 - co