Financial Daily from THE HINDU group of publications
Monday, Dec 12, 2005
Agri-Biz & Commodities - Cultivation
Record wheat crop likely this year
Chennai , Dec. 11
A RECORD wheat crop could be in the offing going by the current sowing trend but experts are cautious waiting for a clear picture to emerge.
According to the Agriculture Ministry, the area under wheat has increased to 142.05 lakh hectares (lh) against 119.5 lh during the corresponding period a year ago.
Ruling high: Experts say farmers in the North have gone in for wheat on a large scale in view of the good prices that are prevailing in the open market currently.
During the weekend, wheat (dara) ruled at Rs 880-882 a quintal. During the same time last year, the prices were around Rs 762 and the year before, it was at Rs 742.
The open market prices are well above the minimum support price (MSP) of Rs 650 a quintal fixed by the Centre for the current rabi season. Futures price is also above the MSP with wheat quoting at Rs 776 a quintal on National Commodities and Derivatives Exchange for delivery in March.
Stocks low: Prices are up as wheat stocks in the country are critically lower than 10 million tonnes and by April it could be down to around one million tonnes.
Though wheat crop had looked promising during the last two seasons, early end to winter in 2003 and late start to winter last season hurt production. Last year, wheat production was 72 million tonnes, lower by 0.11 million tonnes compared with the previous year.
Currently, the weather conditions are excellent for germination of wheat.
"The prime reason for the rise in area under wheat is the price it is commanding in the open market now," an expert, who did not wish to be identified, said. Also, good rains during the south-west monsoon seem to have helped matters.
Cultivation area up: For example, the area under wheat in Gujarat is up primarily because of the good rainfall. In absolute terms, the area under wheat in Gujarat is up 1.3 lh. An interesting feature of the sowing trend is that the area is down in traditional States such as Punjab (-3.7 lh) and Haryana (-50,000 ha).
Uttaranchal (50,000 ha), Uttar Pradesh (20 lh) and Madhya Pradesh (90,000 ha) are the other States where the wheat crop is seem to be making gains.
"It is too early to make any assessment on the crop," said the expert.
The water level in the reservoirs is also an encouraging trend for an overall improvement in rabi sowing, barring coarse cereals. The storage level in the 76 major reservoirs is higher by 36 per cent compared with the same period a year ago and 21 per cent compared with the average level in the last 10 years. The water level in these reservoirs is 100.26 billion cubic metres (bcm) against the full level of 133.02 bcm.
Other crops: Rice sowing is up marginally but a clear picture is awaited in view of the havoc wreaked by rains in Tamil Nadu and Andhra Pradesh. The latest figures, however, show the area up by 70,000 hectares in Tamil Nadu.
Among coarse cereals, the area under jowar is down to 46.84 lh (50.13 lh) but sowing of maize and barley is up marginally.
Oilseeds crop is another that is promising during the current rabi season. The area under rapeseed/mustard is up 4.87 lh to 67.28 lh with sowing mainly rising in Madhya Pradesh and Rajasthan. The area under groundnut and safflower is down marginally but is up in the case of sesame, linseed and sunflower.
"Rapeseed is headed for a 65 lakh tonnes plus crop with the increase in area and good water availability," said Mr B.V. Mehta, Executive Director, Solvent Extractors Association of India.
Acreage under pulses is up at 94 lh against 92.68 lh during the year-ago period.
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