Agri Picks Report September 11, 2024: Geojit Financial Services

commodities

Geojit Financial Services's report on Daily Agri Picks

Production of crude palm oil in Malaysia rose 2.9% on month to 1.89 mln tn in August, according to preliminary data from the Malaysian Palm Oil Board. Production during Aug-Oct accounts for approximately 30% of Malaysia's annual crude palm oil output. Oil palm trees have a seasonal fruiting pattern, with peak production often occurring during the second half of the year. The fruit bunches, which are harvested to extract palm oil, are abundant in these months. Exports of palm oil in August declined 9.7% on month to 1.53 mln tn. However, biodiesel exports rose 189.6% on month to 29,963 tn, the data showed. Palm oil is also used to make biofuel. Total stocks of palm oil in the country rose 7.3% on month to 1.88 mln tn in August, reflecting increased production and sluggish exports. Malaysia is the world's second-largest producer of crude palm oil, and India is the largest consumer of edible oils. • Farmers across the country have sown kharif crops across 109.2 mln ha as of Monday, up 2.2% from a year ago, with notable increases in acreage of paddy and pulses, data from the agriculture ministry showed. Sowing has improved since July due to higher rainfall after a slow start in June. The area under paddy, one of the most important kharif crops, rose 4% on year to nearly 41 mln ha as of today. Progress in the sowing of paddy and current rice stocks with the Centre have led the government to allow grain-deficient states to buy rice from Food Corp of India through open market sales, without participating in electronic auctions. Given the surplus availability of rice with Food Corp of India, the Centre has allowed ethanol distilleries to participate in the corporation's weekly rice auctions. Distilleries can buy a maximum of 2.3 mln tn of rice from the auctions. As of Aug 1, rice stocks with the Centre were the highest since 2005 at 32.8 mln tn. Rice stocks have risen nearly 35% on year and are far above the Jul-Sep buffer norm of 13.5 mln tn--operational stock of 11.5 mln tn and strategic reserve of 2 mln tn. Apart from rice, FCI has 19.00 mln tn of unmilled paddy. After deficient production last year, the area under pulses was up nearly 8% on year at 12.6 mln ha as of Monday. Within pulses, acreage under tur was significantly up by over 12% on year at 4.6 mln ha, data from the ministry showed. Experts say good rainfall in the current monsoon season is expected to improve the cultivation of pulses. India is heavily reliant on other countries to meet the domestic demand for certain pulses such as tur and urad. A rise in sowing this year is expected to bring down imports of these pulses, industry officials say. India, the third-largest importer of tur dal in the world after the US and Canada, imports most of its tur from Mozambique, Malawi and Myanmar. The sharp increase in tur acreage was mainly due to the early onset of the southwest monsoon in top turproducing states such as Karnataka. During the previous kharif season, sowing of crops was delayed owing to the erratic monsoon. Tur acreage in Karnataka was up 23% on year at 1.6 mln ha as of Aug 30, the state's sowing data showed. Similarly, the area under maize in Karnataka was at 1.6 mln ha as of Aug 30, against 1.5 mln ha a year ago. Maize acreage across the country was up 5.4% at 8.7 mln ha as of Monday. The area under oilseeds was 19.2 mln ha as of Monday, up nearly 2% from a year ago. Soybean acreage rose 1% on year to 12.5 mln ha. The area under cotton was 11.2 mln ha, down 9% from a year ago. Groundnut acreage increased over 9% to 4.7 mln ha. In September, rainfall is likely to be above normal in most parts of India at over 109% of the long-period average, the India Meterological Department said. However, some parts of extreme north India, south peninsular India, and most parts of northeast are likely to receive below-normal rainfall, the department said in its monthly forecast for September. The forecast indicates a higher likelihood of La Nina conditions developing during the end of the monsoon season, it said, adding that there was a 66% chance of La Nina during Sep-Nov. The La Nina weather phenomenon will set in after a year of El Nino conditions over India. While the La Nina brings good rainfall in India, the El Nino is associated with hotter and drier climate over the country.

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