Agri update 1stadvanceestimates2016-17

Agri-Update – 1st Advance Estimate (2016-17)

Tuesday, September 27, 2016

www.angelcommodities.com

Kharif crop production at record high as acreage

surpasses average of last five years

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Prepared by RiteshKumar Sahu Analyst - Agri Commodities [email protected] (022) 2921 2000 Extn. 6165

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First Advance estimate

Department of Agriculture & Cooperation (DAC) has

released the First Advance Estimates for production of

major kharif crops for 2016-17 and targets for all major

crops on September 22, 2016.

According to the estimate, country is likely to harvest

record foodgrain, pulses and oilseeds crops in the 2016-17

kharif season, as rainfall during the monsoon months have

been well distributed compared to last year. Last two

years have been drought years witnessed by the country

owing to El Nino phenomenon.

As per the government data, total sowing in the ongoing

kharif season so far has surpassed both last year’s acreage

and the normal area — the average of total sown area in

the previous five years. Sowing of rice, pulses, coarse

cereals and oilseeds have exceeded last year’s acreage by

significant margins, while sugar, cotton and jute are lower.

The total sown area as on September 23, 2016 stands at

1,067.53 lakh hectares compared to 1,030.89 lakh

hectares last year same time and total normal area of

1,062.50 lakh hectares.

The weather during planting and growing season of kharif

i.e. June-September 2016 was mostly favorable for all the

kharif crops except above normal rains recorded in Central

Kharif Crops 2016-17 * 2015-16 ** % chg

Rice 93.88 91.31 2.8

Maize 19.30 15.24 26.6

Coarse Cereals 32.45 27.20 19.3

Tur 4.29 2.46 74.4

Total Pulses 8.70 5.54 57.0

Total Food Grains 135.03 124.01 8.9

Groundnut 6.50 5.34 21.7

Soybean 14.20 8.60 65.1

Total Oilseeds 23.40 16.60 41.0

Cotton # 32.12 30.15 6.5

Sugarcane 305.20 352.10 (13.3)

1st Adv Estimates* Vs 4th Advance Estimates**

(Million tonnes)

Source: Ministry of Agriculture # Million Bales

and North-west India during first week of July.

In 2016-17, country witnessed unprecedented increase in

pulses acreage by almost 30 per cent while the yield factor

will see jump in oilseed crop in the country.

Thus, the production of kharif pulses estimated to increase

by 57 per cent compared to last year production estimates

while 19 per cent increase for in coarse grains. The

production of kharif oilseeds too estimated to increase by

41 per cent.

Monsoon near perfect in 2016-17

In the Jun-Sep monsoon season so far, IMD data shows that

the country has received 820.5 mm of weighted-average

rainfall, 4% below the normal of 853.9 mm for the period.

Near-normal monsoon rains have raised country’s kharif

crops acreage by 3.6 per cent on year to 106.75 mln

according to latest data from the agriculture ministry.

The agricultural production and sowing is almost entirely

dependent on monsoon rains, as nearly two-thirds of the

agricultural land not having the irrigation facilities. In the

current monsoon season, only 8 subdivisions of the country

receive deficient rains while 28 have received normal-to-

excess rains.

This year's monsoon rains are crucial for the agriculture in

the country, as the two previous years 2015 and 2014-were

hit by drought.

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Weekly Rainfall Departure - INDIA - Monsoon 2016

Country Above Normal Below NormalSource: IMD




Targets will be Achieved

For 2016-17, the target for kharif oilseed deviates only

slightly due to reports of wet weather in the oilseed

growing areas in the state of Madhya Pradesh and

Maharashtra. However, targets of kharif Pulses and kharif

coarse cereals will be achieved due to higher area and

good weather conditions.

Foodgrains

In the first advance estimate for the 2016-17, the total

kharif foodgrains, which includes rice, coarse cereals and

pulses, estimated to increase by 8.9 % compared to last

year production at 135.03 million tonnes (mt).

Rice is the most important kharif crop, which account for

almost 70 % of the kharif food grain output. Government

forecasts kharif rice at 93.88 mt higher by 2.8 % compared

to last year production. As per latest kharif area report

published by agricultural department, rice acreage across

the country rose 2.6 % on year to 38.2 million hectares as

on 23 September 2016. The acreage rose due to good rains

this year.

However, the acreage for rice this year is lower than the

normal area for the period. The normal area for the entire

Kharif Crops 2016-17 Target %chg

Oilseeds 23.40 23.50 (0.4)

Pulses 8.70 7.25 20.0

Coarse Cereals 32.45 32.50 0.00

Food Grains 135.03 132.75 1.7

Production (in Million tonnes)

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Kharif Food Grains Production in India (million tonnes)

Source: Agriculture Department

based on the average of last five years, is 39.27 million

hectares.

In the current year, the acreage is higher in the states of

Uttar Pradesh, West Bengal, Punjab Haryana and

Jharkhand. Uttar Pradesh recorded the largest acreage at

59.6 lakh Hectares (lh), up 0.6 % compared to last year

while West Bengal recorded 9.8 % increase in area to 42.3

lh.

Coarse Cereals

Production of coarse cereals during kharif is estimated at

32.45 mt, higher by 19.3 % compared to last year

production. Last year, the production was 27.2 mt. Kharif

coarse cereals include – Maize, Jowar, Bajara, Ragi, small

millets. Among coarse cereals, Maize is the highest

producing cereals account for about 60 % production by

volume.

The production of Maize estimated to rise by 26.6 % to

19.3 mt during this kharif compared to last years’

production of 15.24 mt. Maize acreage in the country is up

9 % at 83.2 lh according to latest data released by the

agriculture ministry.

The top maize sowing states in the current kharif season

are Karnataka, Madhya Pradesh and Rajasthan. Acreage in

Karnataka up 22 % on year at 12.6 lh while Madhya

Pradesh area is higher by 15 % at 12.6 lh. The normal

acreage for the period is 73.5 lh. This is based on the

average of data for sowing over the last five years. The

acreage this year is higher than last year due to

widespread rains in sowing states.

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Kharif Coarse cereals Production in India (million tonnes)





Pulses

According to first advance estimate for 2016-17,

Country’s kharif pulses output during the current season

is likely to reach an all-time high of 8.7 mt, almost 57 %

more than last year. The Centre’s target for pulses

production in the coming rabi (winter) season is 13.5 mt .

This could also mean a record pulses crop in 2016-17.

The acreage as been higher for pulses as Cabinet

Committee on Economic Affairs hike Minimum Support

Price (MSP) for kharif pulses. The MSP of moong and urad

hike by Rs. 150 to Rs. 4,800 per quintal and Rs. 4,575

respectively while for tur it raised by Rs. 200 to Rs. 4,625

per quintal. Pulses consist of tur, gram, urad and moong

where tur, urad and moong are predominantly a kharif

crop while gram is mainly sown in rabi. Urad and Moong

also sown in rabi season in some parts of country.

In its 1st advance estimate, production of most important

grown pulses in kharif season, Tur (Pigeon pea, red

gram), is estimated to increase by whopping 74.4 % or

18.3 lt to 42.9 lt 2016-17 compared to last year

production figures.

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Kharif Pulses Production in India (million tonnes)


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Tur Production in India (million tonnes)


The production is pegged higher compared to previous

year production mainly due to higher acreage and

favorable weather conditions during sowing and growing

season. India's tur acreage stood at 52.4 lh as on 16th Sep,

2016, up 47% from last year as per data released by the

agriculture ministry. The acreage is also higher than the

normal area for the corresponding week, based on

average of five years, which is 40 lh.

This year, farmers have been inclined towards sowing tur

and other pulses due to increase in MSP by the

government coupled with forecast of good monsoon

rains. The largest tur growing state is Maharashtra where

the acreage is up 48 % at 15.3 lh on year, while in

Karnataka, it was 11.8 lh, against 579,000 hectares a year

ago. In another major growing state, Madhya Pradesh,

acreage is up 21.1 % on year at 690,000 hectares.

Oilseeds

In the first advance estimate 2016-17, kharif Oilseeds

output is forecsted at 23.4 mt, which is higher by 6.8 mt

or 40 % compared to last year’s production of 16.6 mt.

Kharif oilseeds comprised of Soybean, Groundnut, Castor

seed, sesamum, Niger Seed and Sunflower.

As per the latest advance estimates for 2016-17

production of major oilseeds – Soybean and Groundnut

estimated to jump by about 58.5 % and 21.7 %

respectively. The production of soybean estimated at

136.15 lt compared to last years’ production of 85.9 lt

while the production of groundnut estimated at 64.98 lt

during the kharif, compared to 53.4 lt in 2016-16.

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Cotton production

As per the first Advance Estimates for 2016-17, cotton

production is estimated higher at 321 lakh bales (1 bale = 170

kg), up 6.5 % or 19.5 lakh bales compared to last year

production. The production is pegged higher this year

compared to 4th estimate of last year despite lower acreage

in the government estimates due to expectation of higher

yield and lower pest incidences recorded in the country.

Cotton acreage in the country is lower this year as farmers

get lower prices cotton last year and due to fear of pest

attacks which will affect their profits. As per the latest

sowing reports from the government, cotton area across the

country in kharif 2016-17 is about 11.6 % lower at 102.55 lh

against 115.98 lh last year. The average cotton acreage for

the entire season based on data for the last five years is

120.3 lh.

The top cotton growing states in the country are

Maharashtra, Gujarat and Telangana. India's top cotton

producer, Gujarat, crop was sown across 23.8 lh, down 13.8

% from a year ago, while in Maharashtra, the acreage was at

38.1 lh, slightly lower than 38.2 lh last year.

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Major Kharif Oilseeds Production in India (lakh tonnes)

Kharif Groundnut Soybean


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Cotton Production in India (lakh bales)


In Madhya Pradesh, the area under the cotton crop was at

6 lh higher by 9.5 % on year, while in Haryana and

Karnataka, it was down 14.3 % and 10.4 % respectively.

Similarly, acreage in Andhra and Punjab also lower this

year by 30 % and 43 % respectively.

Sugarcane production

Sugarcane is an important cash crop in India, mainly grown

in Uttar Pradesh, Maharashtra, Karnataka and Tamil Nadu.

Sugar cane acreage in the country is mainly depends on

the monsoon rains.

According the first Advance Estimates for 2016-17

released by the Ministry of Agriculture, sugarcane

production is expected to decline to 305.2 mt in 2016-17,

as against 352.2 mt last year, a decline of 13.3 percent.

The agriculture ministry has set sugarcane production

target at 355 mt, which may not be met, due to lower

area.

The decline in production is due to intense drought

conditions in the sugarcane producing states of

Maharashtra and Karnataka since last two years.

The largest cane-growing state, Uttar Pradesh, planted

cane in 21.8 lh, up 6.2 % on year, while acreage in

countries largest sugar producer, Maharashtra, down 35.9

% at 6,33,000 hectares. Similarly, acreage in Karnataka was

down 20.7 % on year at 399,000 hectares, while in

Tamilnadu, area under sugarcane was down 8.8%.at

268,000 ha.

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Agri update 1stadvanceestimates2016-17