If Kharif production in foodgrains declines, inflation will rise

- Commodity Current : Jayavadan Gandhi

Production of kharif crops for the year 2022-23 is estimated to decline by an average of two percent. The government is keeping a close eye on the survey of the production of spices, telebia and grain crops. However, according to the survey, there is a possibility of a significant decrease in grain production by 13 to 14 percent. However, the possibility of increasing kharif production of crops like cotton, maize and soybeans has also been expressed. In the year 2022-23, out of the total production estimated to be around 64 crore tonnes, it has been revealed that the lack of rain in the major grain producing states like Uttar Pradesh, West Bengal, Bihar is responsible for the decrease in grain production to around 9.60 crore tonnes. A decrease of 3 to 7 percent is observed in the total production of castor and groundnut in oilseed rape. However, with an average rise of 4 to 5 per cent in soybean production, this year's kharif season is likely to be around 125 lakh tonnes. Apart from this, there is a significant increase of eight to nine percent in cotton. There are reports of three per cent increase in mug this year against Tuvar-Udd in pulses.

Soybean earnings have already started to hit agricultural markets. Soybean production is estimated to be around 125 to 130 lakh tonnes this year. Which was around 120 lakh tonnes last year. The soybean market has fallen by an average of 20 percent in the last one and a half months. The market, which is currently at Rs 5100 to Rs 5200 per quintal, is likely to collapse to around Rs 4500 in the near future due to income pressure. However, the market is also expected to improve if the take-up at low prices increases. At present, the boom in soybean income is continuously increasing in the agricultural markets of Maharashtra and Madhya Pradesh.

Along with soybeans, Surajmukhi is also expected to produce around 1.40 lakh tonnes in the Kharif season this year. The kharif season this year is the highest in the last eight years due to the government's appeal and incentives to farmers to increase sunflower production in the country to become self-sufficient in the Telibia sector. It is estimated that the production has increased by 80% more than the target of the government. 85% of surajmukhi has been cultivated in Karnataka, the highest in the country. This year more than half of Surajmukhi was planted in Kharif. After the Russia-Ukraine war, sunflower oil prices rose to a high of Rs 180 per kg. The country imports 22 to 25 lakh tonnes of raw sunflower oil per year. This year till last month around 16 lakh tonnes of sunflower oil has been imported into the country.

This year, the production of cotton crop has increased from 75 lakh bales to 100 lakh bales in the Kharif season. Plantation increased as farmers preferred cotton to higher cotton prices. A bumper production is expected in cotton due to forecast that rains till last week have benefited the cotton crop. Currently the market is in the range of 1500 to 1900 per mane. Most of the 600 ginning mills in the state are currently closed but are expected to start after Dussehra. Pakistan, the largest producer of cotton in the neighboring country, is afraid of heavy loss of the cotton crop due to the terrible flood situation this year. Under these circumstances, if the governments of both the countries agree to the cotton trade, India will benefit in the export market this year. Expectations are also prevailing in the market that out of the average production of 100 lakh bales of cotton, half of the goods will be exported.

Meanwhile other telebia castors are currently experiencing a sluggish trade due to the upside. Dussehra, Diwali festivals are around the corner but markets are in a range bound state due to lack of expected demand in spice crops like cumin, fennel, turmeric. Coriander is promising around Rs 103 to 105 per kg, with no reason to rise at present. Cumin futures bearish pressure is a bearish market hovering around 24500. If cumin futures break the level of 26500, a big boom is expected, but at present there is no support from fundamentals due to lack of consumption. Traders have met Mandai on the planting of cumin after Diwali and it is debatable that the next bullish depression is based on it.