IIFL Agriculture Aug2010

8/9/2019 IIFL Agriculture Aug2010

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August 09 to 13, 2010Top Stories

Sugar decontrol...Govt to ensure interest of poorRepresentation has been received from sugar industry demanding, inter alia,the following:

Sugarcane price be related to realization from sugar and direct realization

from by-products on the basis of a suitable formula. Minimum priceprotection shall come from Government during years of low sugar realization;

PDS sugar be procured from the open market;Sugar be removed from the purview of Essential Commodities Act;

Sugar be decontrolled and release mechanism be dispensed with. Further,there shall be no stock holding limits on trade or bulk consumers.

A decision will be taken only after taking into consideration all the aspectsincluding availability, price situation, its impact on cane growers, impact onthe consumers of sugar and distribution of sugar through the Public

Distribution System. Government will ensure that interest of poor consumersis protected.

Kharif crops sown in 826 lakh hectaresKharif crops have been sown in 826 lakh ha area so far. It is about 55 lakhha more than the acreage on this date last year (762.36 lakh ha). Thiscomes to 8.4% increase in acreage.

As per data received from States, paddy has been sown in 244.83 lakhhectare as compared to 225.75 lakh ha on this date last year, showing anincrease of about 19 lakh ha over the same period.

Pulses have been sown in 88.38 lakh ha so far which is 11.83 lakh ha morethan this time last season. This represents an increase of 15.5 %.

Coarse cereals have been sown in 181.43 lakh ha, about 15.42 lakh ha moreas compared to last year (9.3%). Among the coarse cereals, acreage of bajrahas sown the highest increase as compared to last year (from 64.16 lakh hato 75.9 lakh ha or increase of 18.3%).

We e k l y I n d u s t r y N e w s le t t e r

Leader Speak

Mr. Chandrakant P. Sanghvi,Chairman and ManagingDirector of Sanghvi Movers LtdIn an exclusive conversation withHemant P. Maradia of IIFL, Mr.Sanghvi says, "We hope to attain

utilization levels of 80-85% by theend of FY11. EBIDTA margins willbe at around 75%."...More K. Ramanathan, CIO, INGInvestment ManagementReplying to Yash Ved of IIFL, K.Ramanathan says"Valuationswould look fair if the marketestimates of earnings growth ofaround 25% in FY11 and around20% in FY12 materialize."...More Mr. Sameer Nagpal, VP -

Strategy & Business Creation,Ingersoll Rand India Ltd. In an exclusive interaction withHemant P. Maradia of IIFL, Mr.Nagpal says, "We have a short-term target of more than doublingour turnover in India to overUS$500mn in the next threeyears."...More

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Ar ticles

Is all well with the funds? Retail investors accounted for only26.6% of the total mutual fundinvestments, a marginal increasefrom 21% the previous year. This,despite the 84% growth in the

AUM of retail investors, the highestfor any segment....More

Hypertension may cause Kidney

failureIt is surprising to know thatHypertension is the second majorcause, after diabetes, of end stagerenal diseases or kidney failureand is responsible for 25-30% ofall reported cases...More

Is all well with the funds?Retail investors accounted for only26.6% of the total mutual fundinvestments, a marginal increasefrom 21% the previous year. This,despite the 84% growth in the

AUM of retail investors, the highestfor any segment...More

http://www.indiainfoline.com/news/inrledspk.asp?lmn=1&cat=1http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Chandrakant-P.-Shanghvi-Chairman-and-Managing-Director-of-Shanghvi-Movers-Ltd/19683587http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Chandrakant-P.-Shanghvi-Chairman-and-Managing-Director-of-Shanghvi-Movers-Ltd/19683587http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Chandrakant-P.-Shanghvi-Chairman-and-Managing-Director-of-Shanghvi-Movers-Ltd/19683587http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Chandrakant-P.-Shanghvi-Chairman-and-Managing-Director-of-Shanghvi-Movers-Ltd/19683587http://www.indiainfoline.com/Research/LeaderSpeak/K.-Ramanathan-CIO-ING-Investment-Management/19652479http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Sameer-Nagpal-VP-Strategy-and-Business-Creation-Ingersoll-Rand-India-Ltd./19636925http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Sameer-Nagpal-VP-Strategy-and-Business-Creation-Ingersoll-Rand-India-Ltd./19636925http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Sameer-Nagpal-VP-Strategy-and-Business-Creation-Ingersoll-Rand-India-Ltd./19636925http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Sameer-Nagpal-VP-Strategy-and-Business-Creation-Ingersoll-Rand-India-Ltd./19636925http://archives.indiainfoline.com/industry/innersection.asp?lmn=5&cat=5http://archives.indiainfoline.com/industry/innersection.asp?lmn=5&cat=5http://archives.indiainfoline.com/industry/innersection.asp?lmn=5&cat=5http://www.indiainfoline.com/news/inrledspk.asp?lmn=1&cat=1http://www.indiainfoline.com/Research/Articles/Is-all-well-with-the-funds/19605817http://www.indiainfoline.com/Research/Articles/Is-all-well-with-the-funds/19605817http://www.indiainfoline.com/Markets/News/Hypertension-may-cause-Kidney-failure/4904471726http://www.indiainfoline.com/Markets/News/Hypertension-may-cause-Kidney-failure/4904471726http://www.indiainfoline.com/Markets/News/Hypertension-may-cause-Kidney-failure/4904471726http://www.indiainfoline.com/Research/Articles/Is-all-well-with-the-funds/19605817http://www.indiainfoline.com/Research/Articles/Is-all-well-with-the-funds/19605817http://www.indiainfoline.com/Research/Articles/Is-all-well-with-the-funds/19605817http://www.indiainfoline.com/Research/Articles/Is-all-well-with-the-funds/19605817http://www.indiainfoline.com/Markets/News/Hypertension-may-cause-Kidney-failure/4904471726http://www.indiainfoline.com/Markets/News/Hypertension-may-cause-Kidney-failure/4904471726http://www.indiainfoline.com/Markets/News/Hypertension-may-cause-Kidney-failure/4904471726http://www.indiainfoline.com/Research/Articles/Is-all-well-with-the-funds/19605817http://www.indiainfoline.com/Research/Articles/Is-all-well-with-the-funds/19605817http://www.indiainfoline.com/news/inrledspk.asp?lmn=1&cat=1http://archives.indiainfoline.com/industry/innersection.asp?lmn=5&cat=5http://archives.indiainfoline.com/industry/innersection.asp?lmn=5&cat=5http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Sameer-Nagpal-VP-Strategy-and-Business-Creation-Ingersoll-Rand-India-Ltd./19636925http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Sameer-Nagpal-VP-Strategy-and-Business-Creation-Ingersoll-Rand-India-Ltd./19636925http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Sameer-Nagpal-VP-Strategy-and-Business-Creation-Ingersoll-Rand-India-Ltd./19636925http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Sameer-Nagpal-VP-Strategy-and-Business-Creation-Ingersoll-Rand-India-Ltd./19636925http://www.indiainfoline.com/Research/LeaderSpeak/K.-Ramanathan-CIO-ING-Investment-Management/19652479http://www.indiainfoline.com/Research/LeaderSpeak/K.-Ramanathan-CIO-ING-Investment-Management/19652479http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Chandrakant-P.-Shanghvi-Chairman-and-Managing-Director-of-Shanghvi-Movers-Ltd/19683587http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Chandrakant-P.-Shanghvi-Chairman-and-Managing-Director-of-Shanghvi-Movers-Ltd/19683587http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Chandrakant-P.-Shanghvi-Chairman-and-Managing-Director-of-Shanghvi-Movers-Ltd/19683587http://www.indiainfoline.com/Research/LeaderSpeak/Mr.-Chandrakant-P.-Shanghvi-Chairman-and-Managing-Director-of-Shanghvi-Movers-Ltd/19683587http://www.indiainfoline.com/news/inrledspk.asp?lmn=1&cat=1


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In Focus Stories

Retail prices of most essential commodities steady or decliningRetail prices of most of the essential commodities are either steady ordeclining on account of various fiscal and administrative steps taken by theGovernment over the last six months. Rise in prices is due to the combinedeffect of factors such as, growing demand on account of increase in

population and income, hardening of international prices, changes inconsumption pattern, diversion of foodgrains for fuel, adverse weather andclimate change, increase in crude oil prices, hikes in MSP, and increase infreight rates also have had an impact on the prices of essential commodities.Market expectations and sentiments play a major role in price rise. Weatherapart from seasonable factors was responsible for the rise in the prices offruits and vegetables. Government takes several proactive measures tomoderate the price rise and to ensure that the vulnerable section of thesociety is protected.

The strong growth saga continues for Jain Irrigation

Jain Irrigation FY10 net profit up 126%


http://www.indiainfoline.com/Markets/News/The-strong-growth-saga-continues-for-Jain-Irrigation/4903958444http://www.indiainfoline.com/Markets/News/Jain-Irrigation-FY10-net-profit-up-126-percent/4902418598http://www.indiainfoline.com/Markets/News/Jain-Irrigation-FY10-net-profit-up-126-percent/4902418598http://www.indiainfoline.com/Markets/News/The-strong-growth-saga-continues-for-Jain-Irrigation/4903958444


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Gaining companiesName 9-Aug-10 13-Aug-10 % Change

FINANCIAL TECHNO 1,211 1,321 9.0

TEMPTATION FOODS 39 41 4.1

RALLIS INDIA LTD 1,257 1,306 3.9

HINDUSTAN UNILEV 256 266 3.8

JAYSHREE TEA 159 165 3.7

MCLEOD RUSSEL LT 248 256 3.3

MANGALORE CHEM 37 38 2.6

TATA COFFEE LTD 457 468 2.3

UNITED PHOSPHORU 186 190 1.9

SHREE RENUKA SUG 68 69 1.6

NESTLE INDIA LTD 2,791 2,800 0.3

BAJAJ HINDUSTHAN 117 118 0.3

GUJARAT NARM VLY 119 119 0.3

AGRO DUTCH INDUS 30 30 0.2

Losing companiesName 9-Aug-10 13-Aug-10 % Change

FINOLEX INDUS 86 78 -9.0

KOHINOOR FOODS 57 53 -7.2

KRBL LTD 24 22 -6.7

MONSANTO INDIA 1,912 1,785 -6.6

ESCORTS LTD 195 185 -4.9

AUROBINDO PHARMA 1,288 1,238 -3.8

NAGARJUNA FERT 31 30 -3.5

MAHINDRA & MAHIN 649 627 -3.4

AGRO TECH FOODS 286 277 -3.3

KAVERI SEED 292 283 -2.9

TRIVENI ENGINEER 105 103 -2.6ZUARI INDUS LTD 708 692 -2.3

KARUTURI GLOBAL 23 22 -2.2

BRITANNIA INDS 2,151 2,103 -2.2

KS OILS LTD 55 54 -2.1

RUCHI SOYA INDUS 109 107 -1.8

ITC LTD 159 156 -1.7

BALRAMPUR CHINI 85 84 -1.5

PRAJ INDUSTRIES 78 77 -1.4

REI AGRO LTD 22 22 -1.4

ADVANTA INDIA LT 477 471 -1.3

TATA CHEMICALS 368 363 -1.3GUJARAT AMB EXP 30 30 -1.2

DEEPAK FERTIL 150 149 -0.8

MARICO LIMITED 120 119 -0.4

LAKSHMI ENERGY 99 99 -0.2



4/7

Domestic News

No plan to re-launch Universal PDS: GovtWith a view to specifically target poor sections of society for distribution ofsubsidized foodgrains (rice, wheat & coarse grains) and sugar, TargetedPublic Distribution System (TPDS) was launched in June, 1997.

Government is not actively considering reintroducing Universal PublicDistribution System as the focus on poor will get diluted.

Further, procurement of huge quantities of wheat and rice to meet therequirement of Universal Public Distribution System would result in very lessavailability of foodgrains in the market, leading to rise in open market prices.If the same quantity of foodgrains is distributed equally among all, then thescale of issue will have to be reduced.

Further, in order to manage the level of food subsidy, the issue prices of riceand wheat may have to be increased substantially from the present CentralIssue Prices (CIPs) which have not been revised during the last eight to ten

years. This would also mean that BPL and AAY families would end up notonly getting much reduced scale of issue but also have to pay higher CIPs.

With a view to specifically target poor sections of society for distribution ofsubsidized foodgrains (rice, wheat & coarse grains) and sugar, TargetedPublic Distribution System (TPDS) was launched in June, 1997.

Govt receives proposal for promoting organic farmingGovernment has received a number of proposals for promotion of organicfarming from various states. Under National Horticulture Mission (NHM), 4proposals amounting to Rs.2593.00 lakh have been received fromChhattisgarh, Gujarat, Maharashtra and Rajasthan for adoption andcertification of Organic Farming. Under Rashtriya Krishi Vikas Yojana (RKVY),11 proposals from various States including Madhya Pradesh have beenapproved with an amount of Rs.11368.19 lakh. Under Horticulture Missionfor North East and Himalayan States (HMNEH), 9 proposals for Rs.1191.20lakh have been approved for NE States. Under NHM, funds are released afterthe proposals are approved by the Executive Committee. Under RKVY andHMNEH, first installment of funds has been released already.

Govt raises MSP for maizeGovernment has raised the Minimum Support Price (MSP) of maize fromRs.840/- per quintal in 2009-10 to Rs.880/- per quintal for the year 2010-11. To increase the production of maize in the country, Government isimplementing Centrally Sponsored Scheme of Oilseeds, Pulses, Oil-palm and

Maize (ISOPOM) in 15 major States viz. Andhra Pradesh, Bihar, Chhattisgarh,Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra,Orissa, Punjab, Rajasthan, J&K, Tamil Nadu, U.P. and West Bengal w.e.f.1.4.2010.

Higher procurement causing strain in food storage: Sharad PawarThe following is the statement given by the Minister of Agriculture, ConsumerAffairs, Food and Public Distribution, Shri Sharad Pawar in the Rajya Sabhatoday in response to calling attention notice on storage facilities forfoodgrains in the country. Foodgrains are procured from farmers at MinimumSupport Price with the assurance that whatever the farmer wishes to sell tothe Govt. at the price offered shall be purchased if it conforms to the

prescribed quality. Higher MSP over the last few years, coupled with betteroutreach has led to higher procurement in the last three years. The fact thatsome State Govts. have imposed high taxes has dis-incentivised trade frompurchasing foodgrains which in turn has also lead to higher arrivals at Govt.purchase centres.


http://www.indiainfoline.com/Markets/News/Govt-receives-proposal-for-promoting-organic-farming/4904020660http://www.indiainfoline.com/Markets/News/Govt-raises-MSP-for-maize/4903997329http://www.indiainfoline.com/Markets/News/Higher-procurement-causing-strain-in-food-storage-Sharad-Pawar/4904113984http://www.indiainfoline.com/Markets/News/Higher-procurement-causing-strain-in-food-storage-Sharad-Pawar/4904113984http://www.indiainfoline.com/Markets/News/Govt-raises-MSP-for-maize/4903997329http://www.indiainfoline.com/Markets/News/Govt-receives-proposal-for-promoting-organic-farming/4904020660


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In States like Punjab and Haryana, over 99.50% of market arrivals of wheathave been procured by Govt. agencies. The all India average is 87%. In thecase of paddy, the figure for Government procurement is 97.68% and93.61% of market arrivals in Punjab and Haryana respectively. As result,procurement of foodgrains has risen from 36.3 million tonnes in 2006-07 to60.4 million tonnes in the year that ended in September 2009. In the currentyear, over 53 million tonnes of foodgrains have been procured since October

2009.

NABARD to refinance cooperative banks at 4% p.a.National Bank for Agriculture and Rural Development (NABARD) has reportedthat as per Government of India (Gol) policy, crop loan to farmers is beingextended by lending institutions w.e.f. 2006-07 at 7% p.a. (upto Rs. 3 lakhcrop loan). The Cooperative Banks providing Crop Loans (upto Rs. 3 lakh) at7% p.a. to farmers were eligible for refinance from NABARD at the rate of2.5% p.a for 2006-07 allowing a margin of 4.5% for 3 tier Cooperativestructure which is to be brought down subsequently by 0.5% each Year to3% by 2009-10. Accordingly, NABARD had provided refinance at the rate of2.5%, 3%, 3.5%, 4% p.a for the year 2006-07, 2007-08, 2008-09, 2009-10

by increasing refinance rate at 0.5% each year. This refinance is beingprovided at the rate 4% p.a. for the year 2010-11 also to Cooperative Banks.The Government of India's policy to provide interest subvention for refinancethrough NABARD for Cooperative Banks is uniform across the country.

India to buy US$1.5bn in Argentine soyoil: reportArgentina is the world's biggest supplier of soybean oil, but exporters havebeen forced to look for new markets after top buyer China halted imports inlate March in retaliation for Argentine import curbs on several Chinese goods,said a finacail daily. Earlier reports by a Buenos Aires based consultancy firmsuggested that India replaced China as the biggest market for Argentinesoybean oil in April and May. Total purchases of the oil are expected to reachUS$1.5bn in 2010, a nearly 150% increase from last year, when India spent$606 million on Argentine soyoil, add reports.

Dhampur Sugar gives a nod to merge unit with itself MMTC invites bids to import 18500 tons of RBD Palmolein: report Camson Biotech Q1 total income up 5%Camson Biotechnologies Limited, one of India’s fastest growing IPR-drivenagricultural biotechnology companies posted a record 45.16% growth in thefirst quarter ended June 30, 2010. This strong growth can be attributed toincreased demand and better realisations for Camson’s zero-residue biocidesand unique hybrid seeds. The company declared a total income of Rs

207.1mn for the quarter ended, rising 5.39% YoY from Rs 196.5mn in thecorresponding period last year. The response to Camson Biotech’s zero-residue hybrid seeds, biocides and bio-fertilisers clearly shows a changingtrend of how Indian farmers are approaching farm practices. They are opento alternate methods other than harmful chemical-led agri-practices if theysee an increased yield and safer crop protection at efficient costs. In the next3 years the company sees a tectonic shift to zero-residue farm practicesamong farmers across India. Camson Biotech is geared to scale up itsoperations to gain the first mover advantage in the zero-residue agri-domain.


http://www.indiainfoline.com/Markets/News/NABARD-to-refinance-cooperative-banks-at-4-percent-p.a./4904036214http://www.indiainfoline.com/Markets/News/India-to-buy-US-dollar-1.5bn-in-Argentine-soyoil-report/4903235183http://www.indiainfoline.com/Markets/News/Dhampur-Sugar-gives-a-nod-to-merge-unit-with-itself/4902146403http://www.indiainfoline.com/Markets/News/MMTC-invites-bids-to-import-18500-tons-of-RBD-Palmolein-report/4903017427http://www.indiainfoline.com/Markets/News/Camson-Biotech-Q1-total-income-up-5-percent/4903592925http://www.indiainfoline.com/Markets/News/Camson-Biotech-Q1-total-income-up-5-percent/4903592925http://www.indiainfoline.com/Markets/News/MMTC-invites-bids-to-import-18500-tons-of-RBD-Palmolein-report/4903017427http://www.indiainfoline.com/Markets/News/Dhampur-Sugar-gives-a-nod-to-merge-unit-with-itself/4902146403http://www.indiainfoline.com/Markets/News/India-to-buy-US-dollar-1.5bn-in-Argentine-soyoil-report/4903235183http://www.indiainfoline.com/Markets/News/NABARD-to-refinance-cooperative-banks-at-4-percent-p.a./4904036214


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Global News

Locust swarms threaten agriculture in MadagascarMadagascar is at risk of a significant plague of crop-eating locusts, FAOwarned. An unknown number of immature swarms of Malagasy MigratoryLocust (Locusta migratoria capito) have formed up and moved out of thecountry's south-western corner, where they are usually contained, and have

begun to spread east and north, as far as Maintirano.

The government estimates that 460 000 rural families are potentially at risk.A major, months-long control campaign will be necessary starting in advanceof Madagascar's upcoming rainy season, which begins in mid-October, tostop locust numbers from growing and prevent them from reaching plagueproportions. Madagascar is currently in its dry and cool season, which isunsuitable for locust breeding.

But the wet and hot weather of the rainy season - which lasts until spring --will favour rapid reproduction. Given suitable conditions, locusts can producea new generation roughly every two months and up to four during one year.

The UN agency fielded an assessment mission to the island to assess theissue last week which confirmed, in close coordination with the nationalauthorities, the seriousness of the situation and the need to initiate aerialsurveillance of the movement of the locusts by early September. Read More…


http://www.indiainfoline.com/Markets/News/Locust-swarms-threaten-agriculture-in-Madagascar/4905941579http://www.indiainfoline.com/Markets/News/Locust-swarms-threaten-agriculture-in-Madagascar/4905941579


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Notes

7

Published in 2010. © India Infoline Ltd 2010

This report is for the personal information of the authorised recipient and is not for public distribution and should not be reproduced or redistributedwithout prior permission.

The information provided in the document is from publicly available data and other sources, which we believe, are reliable. Efforts are made to try and

ensure accuracy of data however, India Infoline and/or any of its affiliates and/or employees shall not be liable for loss or damage that may arise from useof this document. India Infoline and/or any of its affiliates and/or employees may or may not hold positions in any of the securities mentioned in the

document.

The report also includes analysis and views expressed by our research team. The report is purely for information purposes and does not construe to be

investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The opinions expressed are our current opinions as ofthe date appearing in the material and may be subject to change from time to time without notice.

Investors should not solely rely on the information contained in this document and must make investment decisions based on their own investmentobjectives, risk profile and financial position. The recipients of this material should take their own professional advice before acting on this information.

India Infoline and/or its affiliate companies may deal in the securities mentioned herein as a broker or for any other transaction as a Market Maker,Investment Advisor, etc. to the issuer company or its connected persons.

India Infoline Ltd. IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel (W), Mumbai 400 013.

For any content related queries, write to: The Editor at [email protected]

We e k l y I n d u s t r y N e w s le t t e r f 7
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IIFL Agriculture Aug2010