Removal of MEP positive for basmati rice exporters.

UR Associates has come out with its report on agri sector.

As rightly predicted by our Indian Meteorological Department, the monsoons have further advanced into Central and North Western India last week and now covered most of India. However, the good news ends there. The rainfall deficiency over the June 01-July 04 monsoon season is 30% below normal with Northwestern and Central India having deficient rainfall of 71% and 33% respectively. The situation looks much worse when coupled with 31% rainfall deficiency during the pre-monsoon season. The late advance of monsoon has impacted the crop sowing and it is lagging behind compared to last year.

IMD has forecasted favorable conditions for further advancement of monsoon and regular rains over most parts of India over the next one week. If monsoon picks up during the July month, we can be hopeful that the Kharif sowing would pickup and reach the desired acreage.

Meanwhile, the government has removed the minimum export price on basmati rice, a move which is expected to provide more flexibility to Indian basmati rice companies. The higher MEP was acting as a hindrance for basmati rice exporters who could not sell rice below the MEP and in this process they were losing their business to other countries like Pakistan. However, with the present move of the government the companies can export the rice at a lower price if required, which will aid in ramping up their volumes.

Insecticides (India) Ltd. launches 3 products in Rajasthan:
Agro chemical manufacturing company Insecticides (India) Ltd (IIL) launched three agro chemical products in the Rajasthan market. “The products- Nuvan, Hakama and Pulsor- are popular and potential products and will help farmers to protect their crops,” Mr. Rajesh Aggarwal, MD of the company said here. Nuvan, insecticide brand used in major crops, has been launched after IIL’s technical collaboration with US- based American Vanguard Corporation (AMVAC) under which the product will be now manufactured and marketed by domestic company, he said. IIL also introduced PULSOR, a new generation fungicide, and Hakama, an herbicide, both from Japanese company Nissan Chemical Industries Ltd. The company also introduced Pulsor in Andhra Pradesh.

Urea import rule eased for fertilizer use: The government has allowed private companies to import urea for preparation of complex fertilizers used in agriculture. Till now, such companies could only import urea for industrial use, in preparation of chemicals. For agricultural purposes, private companies used to source urea from imports made by government canalising agents, such as Indian Potash Ltd and state trading houses MMTC and STC. Two Indian companies, Coromandal International and Zuari Industries, are allowed to import urea for agricultural purposes. Now, these companies can directly import without involving canalising agents, official sources said.

India’s cotton output may fall 20% as rains turn patchy: Cotton output in India is likely to fall as much as 20% in the year from October, hit by poor monsoon rains, trade and government officials said, cutting exports of the fiber from India. Patchy rains and better returns on crops such as guar and oilseeds had previously prompted trade officials to forecast a drop of 10% in cotton acreage. "There were no rains in the key producing regions of western and northern India. And both cotton acreage and output could fall by around 20%," Arvind Patel, vice-president of industry body the Saurashtra Ginners' Association, told Reuters. In 2011/12, higher prices encouraged farmers to plant cotton on a record 12 million hectares, helping India harvest 34.7 million bales of 170 kg each.

India to be largest rice exporter in Asia- Kohinoor Foods: Rice stocks are likely to remain upbeat following news that the government has removed the minimum export price (MEP) ceiling for some of the rice companies. Gurnam Arora, joint MD of Kohinoor Foods deems this as very good news for the rice industry. With the removal of MSP, Arora believes that they will be doing exports full throttle. With expectations of basmati export touching about 3 million tonne and export of non-basmati another 5-6 million tonne, Arora informs that India will be the largest export of rice in the continent.

Poor rains may hit pulses production this year: Pawar- The less-than-expected rains in the country are likely to bring down the total pulses production this year, Union Agriculture Minister Sharad Pawar said. The country had produced 17.02 million tonnes (MT) of pulses in the 2011-12 crop year (July-June), slightly lower than the annual demand of around 18-20 MT. "The June rainfall was not satisfactory for agriculture and water reservoirs. This could affect the overall production of pulses in 2012-13," Pawar told reporters on the sidelines of a function.

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