India Leaf

Open market sale price for grain reduced

2011-10-22T18:12:00.000+05:30

Following the lukewarm response to its Open Market Sale Scheme (OMSS), which is meant to offload excess grain stocks held with the Food Corporation of India (FCI) and state agencies to bulk buyers and small traders, the government has decided to reduce the price of grain offered under the scheme.

Henceforth the government would sell grain, mainly rice and wheat, to bulk buyers at a price calculated on the basis of purchase price for the FCI (the minimum support price offered to farmers) and half of the cost of freight from Ludhiana to the purchasing locations.

Earlier, the OMSS prices included the cost of purchase for the FCI and actual freight cost from Ludhiana. “Because of bumper production and sufficient stocks with FCI, the market price for all grain is below the OMSS price, leading to a lower offtake under the scheme,” said an FCI official.

Under OMSS, the government had allocated 1.2 million tonne wheat to bulk buyers such as floor millers during April-September this year. However, it could sell only 60,881 tonne till now and since last August, there are hardly any buyers for OMSS wheat.

“We will offer a lower rate for wheat under OMSS and an empowered group of ministers (EGoM) would decide the price during the next few weeks,” KV Thomas, Union food minister, had told FE in September.

“At present, while wheat under OMSS is offered at R1,158 per quintal, the prevailing market price is well below the price offered under the government scheme,” said a Delhi-based trader.

The extra allocation of wheat under OMSS to states for retail distribution has also not taken off. Against the allocations of close to one million tonne wheat during April-September 2011, states have lifted only 82,677 tonne.

According to the latest stock position with FCI and state agencies at the start of this month, the government has total grain stocks of 51.7 million tonne against the buffer stock and strategic reserves norm of 21.2 million tonne. The FCI and state agencies have a wheat stock of 20.3 million tonne and rice stock of 31.4 million tonne.

OMSS was launched in 2008-09 to sell excess wheat stocks in the open market. However, it has mostly failed to attract a large number of buyers due to the high price offered when compared to the market price.

In a bid to cut down on the cost involved in physical tendering, the FCI has been using the National Spot Exchange Limited platform to sell wheat under to bulk buyers under the scheme.

According to an FCI official, e-auctioning, besides reducing transaction cost, ensures quick settlement of payment and delivery, in turn leading to better price discovery. (Financial Express).

Kharif oilseed output may fall 4-5% on crop damage

2011-10-22T18:08:00.000+05:30

The country’s total oilseed production this kharif harvesting season is likely to decline by four-five per cent season due to severe crop damage, especially of soybean, in major areas of Madhya Pradesh, India’s largest producing state. Against the first advanced estimate of 20.89 million tonnes (mt), given by the ministry of agriculture, the industry has pegged the total output at around 20 mt. The total oilseed output has stood at 20.85 mt last kharif season.

“We are certainly considering to lower the soybean crop estimates, though marginally, by 100,000-150,000 tonnes from the earlier estimates of 11.65 mt released on September 30, as the crop damage has been larger than expected,” said Rajesh Agrawal, spokesperson of the Soybean Processors Association of India (Sopa), an Indore-based trade body.

At major centres around Bhopal and Disa, soybean crop was severely affected due to waterlogging in fields. As a result, the yield in this region was likely to fall at least 33 per cent to 750 kg per hectare from 1,000-1,100 kg last year. Considering these, the earlier production forecast was unlikely to be met, especially for soybean, despite an increase of 1 million hectares in acreage, said Agrawal.

Not only the government, but industry trade bodies, along with other stakeholders, had earlier forecast India’s oilseed output to be bumper, setting new record this year. Traders hoped the import of vegetable oil would decline this year due to higher domestic output. But, with oilseed output estimated lower, India’s reliance on overseas import may continue, even widen, due to a sustained increase in per-capita consumption.

India imports crude palm oil from Indonesia. But, as the Indonesian government raised export duty on crude palm oil, Indian traders have increased the import of refined edible oils not only from Indonesia but also from other major destinations like Malaysia and Argentina. India imports 8.5-9 mt of vegetable oil to meet its domestic annual need of 15.5 mt.

Industry veteran Gobindbhai Patel, however, has already factored in the crop damage across all oilseed segments and forecast soybean output even lower than the industry’s estimates to 10.5-10.7 mt, against the last year’s output at 9.8 mt.

The case is somewhat similar for groundnut. Against the government estimate of 410,000 tonnes, the Mumbai-based Indian Oilseeds and Produce Export Promotion Council expects groundnut output to be 407,000 tonnes, almost the same as last year. The agency, however, estimated a 22 per cent fall in sesameseed output to 311,000 tonnes, which may be revised.

The rapidly falling acreage is set to bring down the sunflower seed output to 130,000 tonnes this summer-sown season from 140,000 tonnes last year.

“The government’s oilseed figures have always been unrealistic which vary with the figures from the trade with a wide margin. Therefore, the government’s production figures can not be relied upon. Trades always assess individual oilseed crops after visiting the field and considering all factors including post harvest management,” said Patel.

According to Naveen Mathur, associate director of Angel Broking, the oilseed output during the current kharif harvesting season beginning October may fall even below 20 mt due to crop damage in groundnut and soybean following unseasonal rainfall in the crop maturing period. (Business Standard)

India's food production expected to exceed the target in 2011-12

2011-10-22T18:01:00.000+05:30

Agriculture and Food Processing Industries Minister, Shri Sharad Pawar, has expressed the hope that with record production in kharif and rabi seasons this year, the food production will exceed the target in 2011-12.

The Minister also stated that strategies for rejuvenating agriculture sector have been working well and the targeted 4% growth in agriculture sector would be achieved.

Shri Pawar said this in the Economic Editors’ Conference on 19th October 2011.

The following is the text of the Minister’s address:

“I am very happy to participate in this edition of Economic Editors’ Conference. It is a great opportunity for sharing with you our initiatives, successes and challenges in the field of agriculture and allied sectors. Your valued feedback will be important input to improve implementation of our existing schemes/programmes and to formulate future strategies. My office has already circulated the background note. I, therefore, have decided to limit myself to only the salient and important issues.

You are all aware that foodgrain production has reached a record level of 241.6 million tonne in 2010-11. We have also achieved highest ever production of wheat, pulses, oil seeds and cotton. Overall farm output has also achieved an impressive growth rate of 7.5% during the last quarter of 2010-11 thus helping Agriculture GDP to register a growth of 6.6 % during the year. This also makes average growth rate in current plan to be 3.2% which we could achieve under some of the worst climatic conditions like drought, un-seasonal rains, flood, frost etc. in recent past.

Monsoon 2011 has been very encouraging and our production outlook too. As per 1st Advance Estimates, Kharif 2011 production of Rice in the country is estimated at 87.10 million tonnes which will be an all time high. We are also expecting record productions in Cotton and Oilseeds this year. We hope to see a substantial expansion in crop area and to achieving record production in coming Rabi season too. We are confident that we will be able to surpass our own production record set last year.

All these give me great optimism that strategies for rejuvenating agriculture sector have been working well and we will now be able to achieve targeted 4% growth.

While the results are encouraging, we also have challenges ahead. Demand of food grain will grow rapidly in next few decades not only due to growing population but also due to rise in per capita income and various governmental interventions to ensure food and nutritional security to less advantaged people.

We have to produce more for ensuring food and nutritional security of our nation. But, this will be achieved with more competitive demand on land and water, progressive fragmentation of land holdings, degrading natural resource base and emerging concerns of climate change.

We know that increase in agricultural production would have to emanate only by enhancement in farm productivity from existing cultivated area. We have concentrated on enhancing production and productivity both by bringing in high yielding varieties, hybrids and efficient farm equipments. For this we need more investments in this sector.

We have, over last few years, been able to ensure higher investments both private and public. Gross Capital Formation (GCF) as percentage of agricultural GDP clocked 18.7% during first three years of current plan, which is significantly higher compared to 12.5% during whole of tenth plan. Simultaneously, we have been able to enhance Plan outlay substantially to reach Rs. 21, 530 crore in 2011-12.

Rashtriya Krishi Vikas Yojana (RKVY), launched in August 2007, has become the principal instrument for increasing the States’ investment in this sector. Outlay under RKVY has been substantially increased to Rs. 7,810 crore in 2011-12, which now includes several commodity specific measures namely ‘Bringing Green Revolution to the Eastern Region of India”, ‘Special Initiative for Pulses and Oilseeds’, ‘Accelerating Fodder production’, ‘Creating Vegetable Clusters’, ‘Nutri-Cereals’, ‘Oil Palm development’ etc.

Alongwith RKVY, National Food Security Mission (NFSM) has also emerged as another path breaking intervention. I take pride to mention that NFSM has already accomplished its target of producing additional production of 20 million tons within 4 years of its implementation.

With successful implementation of MGNREGA and other anti poverty programme of the Government, there is now pressure on availability of farm labour. While we are attempting to innovatively utilise MGNREGA for augmenting activities that directly add to farm productivity; for compensating scarcity of labour, I am proposing a large programme for agricultural mechanisation during 12th Plan.

Agriculture Credit plays an important role in improving agricultural production, productivity and mitigating both climatic and non-climatic risks. Our concerted effort has seen surpassing credit flow target in 2010-11 by about 19%. We are hopeful to surpass target in this year too. Similarly, price signals are an extremely effective tool for increasing agricultural production and productivity. Government has been upwardly revising MSP of major crops such as paddy, wheat and pulses at regular interval for incentivising farmers to produce more.

We all know that Animal Husbandry, Dairying and Fisheries plays significant role in supplementing incomes and generating gainful employment in the rural areas, particularly among the landless labourers, small and marginal farmers and women. It also acts as an insurance against vagaries of nature like drought, famine and other natural calamities. For sustaining growth and enhancing productivity in this sector, ICAR has initiated several special efforts namely establishment of elite herds of important buffalo breeds, diagnostic kit ‘DIVA’ for differentiating Foot and Mouth Disease Infected and vaccinated animals, characterisation of new goat breeds etc.

As a result, India continues to be the largest producer of milk in the World. Small, marginal farmers and landless labourers are majority producers of milk in India. To ensure a steady market and remunerative prices for them, about 14.08 million farmers have been brought under the ambit of about 1.35 lakhs village level dairy cooperative societies in the country.

Food processing industry is now increasingly being seen as a potential source for driving rural economy towards prosperity by brining increased farm gate prices and reduced wastages. During current plan, we are giving special emphasis on developing Infrastructure for food processing. So far projects for 15 Mega Food Parks, 49 Cold Chain and 10 Abattoir are already approved by the Ministry. Besides special focus is being given for capacity building, R&D, quality assurance and skill development with selective but active collaboration with established foreign universities etc. I take pride to inform you that Indian Institute of Crop Processing Technology (IICPT) has been fully functional for the last three years and National Institute for Food Technology and Entrepreneurship Management (NIFTEM) is coming up fast on the outskirts of Delhi at Kundli.

With a large diversified production base, coupled with modern technology and low manpower cost, the Indian food processing sector is poised for growth.

Future of Indian agriculture would be technology driven; whether be in Biotechnology or efficient mechanisation or use of remote sensing tools. ICAR through National Initiatives on Climate Resilient Agriculture (NICRA) has been creating synergy with other ongoing research projects. Its National Agricultural Innovation Project (NAIP) is helping to foster and strengthen partnerships with stakeholders’ including in Private Sector for ensuring sustainable development of Indian agriculture.

ICAR is gradually becoming a one stop destination for innovative agro-industry and entrepreneurship. AGRINDIA has been established for promoting spread and commercialisation of R&D Outcome, protecting Intellectual Property Rights (IPR) and forging partnership with Industries. A range of other business incubation and promotion efforts are helping rural youths, budding entrepreneurs and Industries.

I would like to conclude by saying that for the whole world and for developing nations in particular, development in its truest sense can only take place when economic growth fosters social equity. For this to happen we have to keep agriculture in the forefront of our nation’s developmental effort.”

Agriculture Minister Calls for Reforms in Agriculture Marketing

2011-10-22T17:56:00.000+05:30

Minister of Agriculture and Food Processing Industries Shri Sharad Pawar has called for reforms in agricultural marketing. He said, the prevailing system which comprises regulated markets set up by the States under APMC Act has become a constraint on farmers’ ability to market their produce at the best possible prices. Shri Pawar was addressing the Parliamentary Consultative Committee attached to his Ministry here today.

The Minister said, large number of intermediaries and large transaction costs, such as market fee, entry tax make marketing reforms a priority. He said, “ We continue to pursue this with States and have achieved some success. Our model APMC Act of 2003 has been adopted, to varying degrees so far by 17 States and nine States have also framed the Rules . There is no APMC Act in Bihar, Kerala, Manipur, Andaman & Nicobar Islands, Dadra, & Nagar Havel, Daman & Diu and Lakshadweep.”

Shri Pawar said, “Farmers, specially small and marginal are unable to take advantage of the market system and often have to resort to distress sale. Access to safe and scientific storage facility, coupled with efficient credit is the solution.” The Minister said that Centre endeavours to provide this through Grameen Bhandarn Yojana. Since inception of the scheme in 2001, over 25 000 godowns representing incremental capacity of about 290 lakh MT with a total investment of Rs. 800 crore have been sanctioned.

Under the Grameen Bhandaran Yojana subsidy is being provided @ 25% of the project cost to all categories of farmers, Agriculture graduates, cooperatives & CWC/SWCs. All other categories of individuals companies and corporations are being given subsidy @ 15% of the project cost. In case of NE States, hilly areas and SC/ST entrepreneurs, their cooperatives and women farmers, the subsidy is 33.33%.

This scheme has now been further rationalized, on the basis of feedback and suggestions received from the states. Capital Cost norms have been revised to more realistic levels: from Rs. 2500/- to Rs. 3500/- per tonne in respect of godowns of capacity up to 1000 tonnes and from Rs. 1875 to Rs. 3000 per tonne for godwons exceeding 1000 tonne capacity. For the North Eastern and hilly States, the norm permissible is now Rs. 4000/- per tonne. Similarly, the scheme which hitherto could take up schemes of maximum capacity of 10,000 tonnes can now go upto 30,000 tonnes (25,000 for NE and hilly States).

Rice exports from India may rise on Thai supply cut

2011-10-18T23:14:00.000+05:30

India, the world’s second-largest rice producer, may ship 2 million tonne before March as African buyers seek cheaper alternatives to supplies from flood- hit Thailand, according to KRBL, an exporter.
“Today the cheapest rice is available in India, and that is why there is a lot of demand,” Anil Kumar Mittal, chairman of the New Delhi-based exporter, said in a phone interview. “Indian supplies of white rice are at least $135 a tonne cheaper than those from Thailand, the biggest exporter,” he said.

Rising supplies from India may ease rice prices in Chicago, which have climbed 20% in the past year, and cap global food costs monitored by the United Nations that increased 16% in September from a year earlier. Rice is the best- performing grain this year on concern that damage to crop from the worst floods in Thailand in 50 years and dry weather in Texas in the US will shrink global supplies.

“Indian exporters have signed contracts to ship about 8,00,000 tonne of the grain after the government scrapped restrictions on exports last month,” Prem Garg, managing director of Shri Lal Mahal, an exporter, said.

Buyers from African countries were signing deals to import Indian rice at prices ranging from $350 a tonne and $500 a tonne, free-on-board basis, he said.

India, which banned private companies from shipping non-basmati rice in April 2008 amid a global food crisis, partly lifted that restriction in July. “Exports may total 4 million tonne in the year that began on April 1,” Vijay Setia, president of the All India Rice Exporters Association, said on September 13.

“Thai exporters are in a dilemma now because when the government purchase program was announced, India hadn’t decided to sell its rice,” said Garg.

Thailand started a government-purchase program this month, at prices as much as 44% above market rates, to boost crop prices and rural incomes. The nation’s Permanent Secretary for Commerce Yanyong Phuangrach said on October 14 that the flooding will have a limited impact on rice shipments, and exports this year will be more than 11 million tonne.

Tropical storms have flooded 62 of Thailand’s 77 provinces, damaging 8.4 million rai (1.3 million hectares), or 14% of rice land, the Department of Disaster Prevention and Mitigation said on Monday. Unmilled rice output may be cut by 3.5 million tonne this year and floods were delaying exports, Korbsook Iamsuri, president of the Thai Rice Exporters Association said on Monday.

“The floods in Thailand may not impact global supplies much as the crop is quite good and they will not have any problem in supplying to buyers,” Garg said. Rough rice for delivery in November traded at $16.46 per 100 pounds on the Chicago Board of Trade. The price touched $16.815 on Monday, the highest level since September 23. Prices will be steady at current levels till December, Garg said.
Bloomberg

Minimum support price for rice likely to be increased

2011-10-14T23:20:00.000+05:30

India is likely to raise the price it pays to local farmers to buy rice in the new season which began this month, the food minister said on Thursday, a move that could help the government win political support but also stoke inflation.

The world’s second-biggest rice producer is expected to harvest at least 87 million tonne of summer-sown rice, adding to existing stocks of 22.7 million tonne. The government procures grain for its various welfare programmes.

“We have agreed to give a bonus to farmers for rice procurement. The government will take a decision soon,” K V Thomas told reporters.

The government currently pays local farmers R1,080 ($22.061) for a tonne of rice. While increasing the price it pays farmers will help the government win political support ahead of a string of state elections next year, it could worsen already high inflation.

India’s food price index rose 9.32% in the year to October 1 , and the central bank's raising of interest rates a dozen times in the past 18 months has hardly helped rein in prices.

Following a good monsoon, India is likely produce a record 245 million tonne of grain in 2011-12, up 1.4% from a year ago, raising hopes of more exports that could help bring relief to Asian importers trying to combat food-led inflation.

Thomas said the government would procure at least as much rice as it did last year— a figure that stood at 33.6 million tonne.We have enough space to store new season rice, he said.

Higher supply lead to fall in coconut oil prices

2011-10-14T23:17:00.001+05:30

An increase in supply from Tamil Nadu and Kerala has led to a sharp fall in the price of coconut oil. The price today dropped to Rs 7,500 a quintal in the local market, which had touched the peak of Rs 10,400 a quintal during the second week of May.

With the end of monsoon, processing of coconut was active in Kerala, especially in the northern districts of Malappuram, Kannur and Kasargode. So, copra supply to crushing mills had increased now, said Thalath Mehamood, president, Cochin Oil Merchants Association (COMA).

The sharp increase in production in Tamil Nadu also caused a fall in wholesale prices in Kankayam, the largest coconut oil market in India. The price fell below Rs 7,000 last week. This sharp fall raised demand from FMCG companies, leading to an improvement in prices.

A section of traders told Business Standard that production of copra is yet to be active in the southern districts of Kerala, hence supply would be tight in the coming weeks. The demand for tender coconut is also on a rise after the monsoon.

The retail price of tender coconut increased to Rs 20 for each in most parts of the state. So a major chunk of coconut farmers now opt this channel as for ripe coconut they get a maximum price of Rs 10-12. This also affects the production of good quality copra in Kerala as well as in Tamil Nadu.

Meanwhile, the drop in the price of palm kernel oil also led to the fall in coconut oil price. Palm kernel oil is being widely mixed with coconut oil and sold at lower rate.

Every time coconut oil price increases, adulteration also rises. Now adulteration is active as the price of palm kernel oil dropped to Rs 5,200 a quintal from Rs 10,200 few months back. Palm kernel oil is a suitable mix for adulteration of coconut oil and 25-30 per cent mixing cannot be detected easily.

Due to this mixing, coconut oil is offered at lower rates in the retail segment. This practice is widely uses in crushing mills of Tamil Nadu that helps dealers to offer lower rate for coconut oil.

As main production season of coconut and copra begins in December, market is likely to be in a low phase, with fluctuation in prices based on the swing in demand for the next six-eight weeks.
(Business Standard)

Turmeric crop likely to be good this season

2011-10-14T23:14:00.000+05:30

India is expected to have a bumper turmeric output this kharif season. Farmers increased area under sowing for the spice as they received higher returns for the produce last year.This year, the total production is estimated to be around 8.5 million bags (1 bag= 75 kg), while it stood at 6.5 million bags in 2010-11 and 4.8 million bags in 2009-10, traders said.

“Farmers earlier got around Rs 20-35 a kg for their produce. In the last two years, farmers have been getting good returns of Rs 175-225 a kg,” said Manubhai Shah, a Navi Mumbai-based trader.

Erode in Tamil Nadu is estimated to produce 4.5 million bags this year, compared to 3.5 million bags last year.

Farmers received a good price for their crop in the last two years, which led farmers in Andhra Pradesh and Tamil Nadu to increase acreage under the spice. Although prices have begun to witness a fall, but in 2010, prices had reached an all-time high of Rs 16,000 a quintal.

Prices have seen a decline since January as last year’s production and arrivals reached at their peak. This year’s carryforward stock could be between 1.5 million bags and 2 million bags, taking the total stock for 2011-12 to over 10 million bags, thus, stocks would be higher.

Sowing is still on and has picked up on better weather conditions. Fresh crop comes to the market from January.

Traders and analyst say prices of the spice will rise for few more weeks on strong domestic and international demand, but, bumper production will soon begin to weigh on the price of the commodity when arrival season comes near.

Turmeric prices on NCDEX have begun to move northward from September 27 and have so far seen a 23 per cent rise to Rs 5,432 a quintal.

“Currently, domestic demand is strong from north India due to the ongoing festive season, and export demand for the spice is coming in from Singapore and Malaysia,” said Nalini Rao, a spices research analyst at Angel Commodities.

Turmeric exports rose 52 per cent to 36,500 tonnes during April-August this year, according to the data released by the Spices Board of India.

Price of turmeric at spot markets varied from Rs 6,000-7,200 a quintal depending on the quality. Traders said buying support from stockists as well as retailers, driven by seasonal demand against restricted arrivals mainly pushed up prices. (Business Standard)

Chana futures fall below spot market prices

2011-10-14T23:11:00.000+05:30

Chana futures have seen a huge volatility in the last two weeks. After commodity futures market regulator, the Forward Markets Commission (FMC), imposed a 10 per cent margin on buy-side trades (futures), prices crashed 15 per cent. In the spot market, prices are higher compared to futures.

However, prices are now stabilising and imported containers of chana (chickpeas) and other pulses have started coming in, resulting in softening of spot prices. However, prices in the spot market have fallen only by 10 per cent during the period.

Chana prices were rising in futures, but there were wide-scale complaints that speculators are rigging prices. Although chana’s availability was a concern, there were some fundamentals that were pushing prices. The sharp jump in futures, that was putting rising pressure on prices in the physical market, prompted FMC to ask exchanges, mainly NCDEX, to impose 10 per cent margin on chana buying on September 28 and since then prices have crashed almost 20 per cent.

Futures prices came down from high of Rs 3,661 a quintal on September 27 to Rs 3,097 a quintal (down 15.4 per cent) yesterday and in spot market, prices have come down from Rs 3,625 to Rs 3,258 a quintal (down 10.1 per cent) during the same period.

“However, high prices of chana will incentivise farmers to increase acreage under the crop when sowing for the next rabi season begins after Diwali,” said Bimal Kothari, vice-president of India Pulses and Grains Association, an apex body of pulses industry and trade.

Chana is majorly a rabi crop. A trader with a multinational trading company, which also imports pulses in India said, “Sharp fall in futures prices was due to high margin and after that huge mark-to-market losses let to selling. Futures prices have not fallen so sharply due to supply constraints.”

The Rajasthan government has also tightened stock limits for chana, leading to correction in prices including on futures exchanges.

New chana crop will enter markets in early February and till then, India will need one million tonnes to meet the consumption, where half of that is being met by imports. As supply from imports starts coming in, spot prices will also converge with futures, the trader said. On Wednesday, prices went up by almost two per cent in futures and physical market. (Business Standard)

Sugar prices up on Diwali demand

2011-10-14T23:09:00.000+05:30

Sugar prices rose in the past few days at the production level leading to retail prices going up. The sugar market was bullish this week with prices rising by Rs 40-50 so far, on increased demand ahead of Diwali. Sugar futures prices are also witnessing a firm trend as the Government is considering allowing more sugar exports after Diwali.

Market sources said, firm sugar futures price and improvement in physical demand ahead of Diwali have lead to a positive sentiment.

In the spot market on Friday, S-grade sugar rose by Rs 18, while M-grade ruled steady.

At naka trades, the price increased by Rs 10 on higher demand. Eastern region buyers continued their buying in Maharashtra. On Wednesday, two rail rakes were taken by them. Good quality sugar was in big demand. Freight rates in the Kolhapur, Karad and Sangli line increased by Rs 5-8 a bag on tight availability of trucks. This improved the sentiment further.

Mr Mukesh Kuwadia, Secretary, Bombay Sugar Merchants Association, told Business Line that this month, due to Diwali, the demand has improved sharply. Bulk consumers are active buyers for fine variety. Sweet and confectionery makers will continue buying till the month end. There is no pressure at the mill level as they are selling despite the price rise.

According to an analyst, the world market scenario is positive and that will work in favour of India, especially as the production in Thailand and Brazil are expected to be lower. Higher imports by China and announcement by Pakistan that it will import four lakh tonnes of sugar this week are likely to prop up sugar prices.

In the international market, thanks to bullish demand-supply reports, December-11 sugar futures closed $14.60 higher at $684.10 from $669.50 a tonne on Thursday. Expectation of the Government giving permission to export more sugar next month has strengthened the sentiment.

Arrivals in the Vashi market were around 52 truckloads, while local dispatches were 48-50 truckloads. On Thursday, some 8-10 mills offered tenders and sold about one lakh bags to local and eastern region traders. (HinduBusinessLine)

Madhya Pradesh To Witness Strong Rise In Rabi Sowing In The Current Year

2011-10-13T22:30:00.001+05:30

The total sowing acreage of rabi crop in Madhya Pradesh is set gather strong gains in the current season due to heavy rainfall in the state during the monsoon season.

As per latest estimates of State Agriculture Board, the rabi sowing area is expected to rise by eight lakh hectares to around 104 lakh hectares. The total sowing area of all food grains will rise from 46.53 lakh hectares to 50.50 lakh hectares, pulses from 40 lakh hectares to 42.33 lakh hectares and oilseeds from 8.70 lakh hectares to 10.68 lakh hectares.

According to Weather Department, 25 districts of the state have received above average and the rest of 25 districts average rainfall this year. The average rainfall of the state is 938.4 mm against which 1134 mm rains were registered, which is 21 percent more than the average.

Due to sturdy rainfall, water level in wells, reservoirs, rivulets and rivers has also risen. More crops are expected to be sown due to dampness sustained by the soil also. According to departmental assessments, bumper rise will be registered in sowing and production, if the conditions remain the same.

Cotton gains on limited stocks and China demand

2011-10-13T22:18:00.001+05:30

Cotton prices have gained in the last few days on lower arrivals, inadequate stocks with ginning mills and demand from domestic spinning mills and China.

The Shankar-6 variety, which is in demand for exports, has increased to Rs 40,000 for a candy of 356 in Gujarat markets from Rs 38,000 at the beginning of this month. Similarly, LRA and H-4 varieties, too, have increased by over Rs 1,000 a candy.

“Cotton prices are moving up mainly on demand from China. Ginning mills are not having adequate stocks to meet the demand,” said Mr Anand Poppat, Secretary, Saurashtra Ginners Association.

“Demand from China is good. Export prospects are also good,” said Mr M.P. Patel, Chairman of Jaydeep Cotton Fibres Pvt Ltd, from Rajkot in Gujarat.

The rise has been reflected in raw cotton or kapas prices too. “Kapas are quoting at Rs 900-940 for a maund of 20 kg since arrivals began just a couple of days ago,” said Mr Kalpesh Posiya, a trader at Dhoraji in Gujarat. “Ginning mills are trying to build inventories as stocks with them are low,” he said.

ARRIVALS
Currently, 40,000 bales (170 kg each) a day are arriving throughout the country with Gujarat accounting for 12,000-15,000 bales.

“Arrivals will begin picking up after Diwali. Though prices are rising, corrections are taking place now and then,” said Mr Patel.

“Arrivals will peak only during the second week of November. Even then, we expect a firm trend in prices,” said Mr Poppat.

IMPORT QUOTA
China's cotton import quota expires on December 25 and buyers there must get in the consignments before that.

“If the consignments have to reach before the expiry of their import quota, then contracts will have to be shipped out before November 30. Therefore, prices will rule firm until then,” said Mr Poppat.

China's cotton export had dropped in August by 13.8 per cent, though overall imports increased for the year.The depreciation in the rupee is also keeping exporters interested since a firm dollar is getting them good margins.

NO RESTRICTION ON EXPORTS
“With the Government announcing that there will be no restriction on exports from this season that started this month, exports will do well,” said Mr Patel.

Exports, on the heels of a projected record production, are expected to be around 70 lakh bales against 83 lakh bales last season. A higher crop in the US could result in exports from India being lower next year.

The higher crop prospects in the US have led to cotton futures dropping to $1.0051 a pound. This is over 50 per cent lower after prices hit a record $2.197 in March.

In the domestic market, prices for Shankar-6 increased to a record of over Rs 63,000 a candy in March before beginning to slide on poor demand and consumption.

Meanwhile, the current cotton crop is reported to be excellent. Mr Patel and Mr Poppat said that the crop development was good.

The Cotton Advisory Board, which has representation from the trade, farmers, exporters, textile and agriculture ministry besides the industry, has pegged this season's crop at a record 355 lakh bales against last season's 325 lakh bales. The higher production has been aided by the acreage under the crop rising to 121 lakh hectares from 111 lakh hectares last year.The Agriculture Ministry sees the crop at over 360 lakh bales, while a section of exporters, too, is projecting the crop at around 365 lakh bales.

Meanwhile, exporters and traders said that rumours of the Centre extending a five per cent subsidy for cotton exports.

“They are mere rumours,” said Mr Poppat.

“We have not heard anything of that sort,” said Mr Patel.

In some trade circles, the rise in cotton prices, particularly on Wednesday, was attributed to the rumours of export subsidy.

Exporters said with prospects looking good, subsidy was unlikely. (HinduBusinessLine)

Flood inflation slips to 9.32%

2011-10-13T22:06:00.001+05:30

Food inflation eased marginally for the week ended October 1 but stayed above 9 per cent for the third week in a row, as prices of vegetables, fruits and milk remained expensive, pinching the common man.

Data released today revealed that food inflation as measured by the Wholesale Price Index (WPI) stood at 9.32 per cent for the week ended October 1. It was 9.41 per cent in the previous week.

As food prices remained high, Finance Minister Pranab Mukherjee said the weekly decline in food inflation numbers is yet to translate into a trend.

"There has been a marginal decline... We require indication for a longer period of time," he told reporters.

The WPI revealed that vegetables became dearer by 13.01 per cent year-on-year, while fruits and milk were up 12.19 per cent and 10.35 per cent, respectively.

Protein-based items like eggs, meat and fish also became 9.92 per cent dearer on an annual basis. Cereals turned more expensive by 5.41 per cent, rice by 5.86 per cent and pulses by 6.87 per cent annually.

On the marginal decline in weekly food inflation, experts said that though there has been some fall in prices of wheat and onions, the drop in WPI is mainly due to high base effect -- inflation in the same period last year was over 17 per cent.

Onion prices declined by 10.15 per cent on an annual basis and wheat by 0.24 per cent.

However, the 'Fuel and power' inflation went up to 15.10 per cent week-on-week against 14.69 per cent due to the increased petrol prices. Oil marketing companies had increased petrol prices in mid-September.

Chana rises on strong cues from physical markets

2011-10-12T23:17:00.000+05:30

Chana futures spurted by almost Rs. 50 per quintal today triggered by strong buoyancy in both domestic mandies and imported chana along with strong export demand of kabuli chana.

As per market sources, strong gains were reported in all the major mandies as the spot prices of chana at Delhi mandi gained almost Rs. 50 per quintal today. The prices of chana Annagiri and Chapa quality were trading in the range of Rs. 3600-3700 per quintal.

Similar trend was also seen in imported pulses as the spot prices of Australian and Tanzania chana were trading at Rs. 3300 and Rs. 3050 per quintal respectively at Mumbai port with the gain of over Rs. 25 per quintal today.

Moreover, trade sources revealed that India's chana export demand might reach 1.85 lakh tonnes in the current year against 0.95 lakh tonnes that were reported from the last year. This is mainly due to weak export supplies of Kabuli chana from both Mexico (-61%) and Australia ( -35%) at international market

Consequently, the NCDEX November futures increased by more than Rs. 50 per quintal to trade at Rs. 3236 per quintal today.

Sugar export decision deferred till early November

2011-10-12T23:07:00.000+05:30

The Government today said it will take a decision on allowing sugar exports in the 2011-12 marketing year in the first week of November after assessing global prices and reconciling local production estimates.

In the 2010-11 marketing year (October-September), the Government had allowed exports of 2.6 million tonnes of sugar.

“I will take a decision on sugar exports in the first week of November after evaluating our production estimates, the international and domestic price situation,” the Food Minister, Mr K.V. Thomas, told presspersons on the sidelines of an event here.

Yesterday, the Minister had said that sugar exports will be allowed in phases and the quantity of shipments will be decided after reconciling this year’s production estimates.

Mr Thomas also said that the production forecast for sugar in 2011-12 will be reconciled and finalised after meeting the Agriculture Minister, Mr Sharad Pawar, in the next few days.

Last month, the Food Ministry had pegged sugar output at 24.6 million tonnes for the year, up from 24.3 mt in 2010-11. The Ministry’s estimates are, however, lower than the Agriculture Ministry’s estimate of 25 mt of sugar production.

The sugar industry has estimated production of 26-26.5 mt of sugar this year.

Pulses trade association upset with additional margin on chana

2011-10-11T22:54:00.000+05:30

Upset with sudden hike in the margin for only buy positions on desi chana (chickpeas) that has precipitated a sharp decline in local market prices, the domestic pulses trade has petitioned the market regulator to revoke the additional 10 per cent margin that has taken effect from September 30.

Arguing that the steep 20 per cent fall in chana prices as a consequence of increase in margin was ill-timed, India Pulses and Grains Association, the apex body for the country's pulses and grains trade, has cautioned that the move may prove counter-productive because chana planting for the upcoming rabi season is set to commence soon and any price decline will send out wrong signals to the growers.

The association has expressed apprehension that the sudden fall in prices is likely to prompt importers to cancel or settle their import contracts (for chana as well as its close substitute yellow peas) as there will be no price parity. A considerably weaker rupee has already pushed the cost of imported material higher.

According to the estimate of the Agriculture Ministry, chana production during 2010-11 was a record 80 lakh tonnes.

However, the association believes the actual crop size could be considerably lower at about 60 lakh tonnes. This substantiated by the fact that the physical market price of chana was at least Rs 2,500 a tonne higher than futures prices, the association pointed out.

The pulses trade has argued that the imposition of additional 10 per cent margin will lead to severe shortage in the coming months due to lower imports and shortfall in production next year due to lower plantings.

It is of course unclear what considerations lay with the regulator in announcing a hike in margin. This incident once again brings to the fore the need for more in-depth product knowledge and market knowledge that exchange officials and the regulator must possess.

Clearly, there are several stakeholders in the commodity market and several dimensions to any issue including prices. It is necessary to exercise caution in matters that affect market prices of essential food products. A process of stakeholder consultation is advisable.

India's Oil Meals Exports Rise By 48% During April To Sept 2011

2011-10-07T22:28:00.002+05:30

The Solvent Extractors’ Association of India has just compiled the export data for export of oilmeals for the month of September 2011 and reported at 394,877 tonnes compared to 354,252 tonnes in September 2010. The export of oilmeals during April-September 2011 is reported at 2,034,117 tonnes compared to 1,376,209 tonnes during the same period of last year i.e. up by 48%

During current oil year 2010-11 (Nov.’10 to Sept. ’11) export of oilmeals increased due to:

a) Sharp increased in oilseeds production during current year (2010-11) compared to previous year (2009-10).
b) Increased availability of oilseeds lead to higher crushing and production of oil and meals for domestic and export and
c) Good crushing parity due to high price of oils and export demand for oilmeals. It may be noted during 2009-10, due to lower production of oilseeds, coupled with disparity & lower demand, the export was down to lowest in last few years.

Oilmeal import by Japan from India during April-September 2011 was reported at 498,249 tonnes compared to 388,778 tonnes last year consisting of 485,055 tonnes of soybean meal and 13,194 tonnes of rapeseed meal. Vietnam imported 249,123 tonnes compared to 224,342 tonnes last year consisting of 155,442 tonnes of soybean meal, 17,666 tonnes of rapeseed meal and entire quantity of 76,015 tonnes of rice bran extraction. China imported 216,749 tonnes compared to 182,007 tonnes, consisting 209,465 tonnes of rapeseed meal, 2,288 tonnes of groundnut meal and 4,996 tonnes of soybean meal. South Korea imported 338,746 tonnes compared to 181,803 tonnes of last year, consisting of 144,374 tonnes of castor seed meal, 192,026 tonnes of rapeseed meal and 2,346 tonnes of soybean meal. Europe and other countries have imported about 49,833 tonnes compared to 10,571 tonnes of last year.

Food Inflation rises to 9.41%

2011-10-07T21:12:00.002+05:30

Food inflation, as measured by Wholesale Price Index (WPI), stood at 9.13% in the previous week. It was 16.88% in the corresponding week of 2010.

As per data from the ministry of commerce, vegetables became dearer by 14.88% year-on-year during the week under review, while potatoes and onions became more expensive by 9.34% and 10.58%, respectively.

Finance minister Pranab Mukherjee on Friday expressed concern over costlier vegetables, fruits and milk pushing up food inflation to 9.41% for the week ended September 24, and said he has been in constant touch with the RBI on how to rein in the rate of price rise.

Fruit prices went up by 11.72%, milk by 10.35% and eggs, meat and fish by 10.33%. Cereals became dearer by 4.57% and pulses were up 7.54% on an annual basis during the seven-day period.
Headline inflation, which factors in manufactured items, fuel and non-food primary items, in addition to food commodities, stood at a 13-month high of 9.78% in August.

Overall, inflation in primary articles stood at 10.84% during the week under review, compared to 11.43% in the previous week.

Inflation in non-food articles, which comprise fibres, oil seeds and minerals, stood at 10.77% for the week ended September 24, as against 12.89% in the previous week. Fuel and power inflation remained flat at 14.69%, the same as in the previous week.

"Inflation is definitely a matter of concern. We shall have to see how to bring it down to moderate level," Mukherjee told reporters in New Delhi.

"Given the good monsoon, we were expecting some moderation in the rate of price rise. But it seems not to be happening and there is particular pressure on vegetables and fruits," Crisil Chief Economist D K Joshi said.

He said the government should address issues related to storage and cold chain facilities to reduce supply constraints. Joshi said the pressure on RBI continues to remain.

"We are definitely moving toward the end of rate hike cycle. However, there might be one last round of increase in interest rates later this month, as headline inflation remains stubbornly high," he said.

The Reserve Bank has already hiked policy rates 12 times since March, 2010, to tame demand and curb inflation.

Chana market crashes

2011-10-01T22:43:00.001+05:30

Chana spot market crashed in the last few days due to weak market sentiments caused by the imposition of stock holding limit on Chana. Similarly, the futures prices too nosedived after the exchanges were asked by the Forward Markets Commission (FMC) to impose a special margin of 10% on long side of all running contracts of chana from 30th September 2011.

Earlier, limited stocks available in the market and disappointing first advance estimates of pulses production by the agriculture ministry encouraged traders to take huge long positions in the futures market. Chana prices in the spot market increased by almost Rs.500 a quintal in the September month to touch a high of Rs.3700 a quintal (Source: NCDEX September spot price). Weak supply in major chana producing states amid strong demand ahead of festivals supported prices at higher levels. Prices of pulses across the board remained steady on account of rising demand in the domestic market and slow arrivals from farmers and traders to the wholesale markets.

As per the first advance estimates of production released by the Ministry of Agriculture, chana production (Kharif) is estimated at 6.43 million tonnes against 7.12 million tonnes in 2010-11, a decline of almost 10 per cent. Production of tur (pigeon peas/arhar) is projected to be at last year’s level of around 2.9 million tonnes, while urad (black gram) and moong (green grams) would see a shortfall in production.

According to the weather watch report from the Ministry of Agriculture, the total sowing acreage of kharif pulses as on 30th September 2011 stood at 110.14 lakh hectares as against 121 lakh hectares that were reported last year in the same period. This was mainly on account of shift in crop area of pulses towards oilseeds and cotton in major producing states such as Maharashtra and Andhra Pradesh.

Globally production of chana is likely to decline by almost 6% in 2011 due to poor crop harvesting expected in Australia and Canada. The Australian Pulses Traders Association has mentioned that he total production of Australia’s desi chickpeas is likely to decline by almost 10-12% to 3.05 lakh tonnes despite strong sowing acreage of almost 5.02 lakh hectares reported in 2011. This will be on account of poor productivity of chickpeas crop.

Similarly in Canada, Agriculture and Agri - Food of Canada has mentioned in its latest report that in 2011-12, pulses area is forecast to fall by 48% from 2010-11. This is much lower than originally intended because of excessive moisture in many growing areas. Production is expected to fall sharply to 65,000 tonnes, the lowest since 2004-05. Supply is forecast to be lower than last year and is expected to limit exports by 90% to 50,000 tonnes in the international market.
All the above mentioned factors had been supporting chana prices at higher levels. However, in the last two-three days, china prices in the spot as well as futures crashed as the commodity exchanges imposed a 10% long margin on chana contracts.

Government’s announcement to have a contingency plan for additional production of pulses in Rabi 2011-12 to overcome losses of Kharif pulses also supported the bearish market sentiments. Alleged rumors of government taking an extreme step to control rising prices of essential commodities (read inflation) by banning trading in futures (or some commodities) also created a fear in the market. Hence, market participants in the futures market started liquidating their positions to cover their losses (or book profits) to maintain the margin limit on the exchange.

The government of Rajasthan too, acted by imposing a stock limit on chana separately from the other pulses. Henceforth, total pulses stock limits shall be 550 tonnes instead of 500 tonnes for wholesalers (per license). For chana, the stock limit has been fixed at 250 tonnes and for other pulses it is 300 tonnes.

The Central Government has set a target for itself to achieve an additional production of 2.78 million tonnes pulses during the ensuing Rabi season through area expansion and productivity enhancement.

Disclaimer:The views expressed are my personal and all the information contained herein is based upon information available in the public domain.

All India Sowing Report-Increase in acreage under rice and oilseeds

2011-09-30T22:52:00.000+05:30

As per the latest data releaseds by the Minstry of Agriculture, rice has been sown in 383.69 lakh hectares as on 30 September 2011. It represents an increase of 33.26 lakh hectares over last year’s acreage on this date. Higher area coverage has been reported from West Bengal, Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh and Tamil Nadu.

Oilseeds have been sown in 179.59 lakh hectares, 4.79 lakh hectares more than the last year. Higher area coverage has been reported from Maharashtra, Madhya Pradesh, Uttar Pradesh and Rajasthan.

However, there has been a sharp decline in pulses area. The area under pulses has declined sharply by around 9 per cent and stood at 110.14 lakh hectares as against 121 lakh hectares reported in the same period last year.

Coarse cereals have been sown in 200.19 lakh hectares. Higher area coverage has been reported from Madhya Pradesh, Andhra Pradesh, Assam and Jammu & Kashmir.

Cotton has been sown in 120.21 lakh hectares. Higher area coverage has been reported from Gujarat, Rajasthan, Maharashtra and Haryana.

India Likely To Face Shortfall In Refined Palm Oil

2011-09-28T22:13:00.000+05:30

According to a leading vegetable oil analyst, Dorab Mistry, India may face a shortage in refined palm oil imports in the next three months as leading supplier Indonesia doesn't have the capacity to meet a likely surge in demand following tax cuts on its product. Although, Indonesia will expand its refining capacity in future, but it will take at least two years to meet India's demand.

Indonesia, the world's biggest palm oil producer and exporter, has reduced its export tax on refined, bleached and deodorized palm olein in bulk to 8% from 15% and raised the duty on crude palm oil to 6.5% from 15% effective Sept. 15 to encourage domestic refining.

India is the world's largest importer of vegetable oil and imports mainly from Indonesia and Malaysia.The country imports about 6 million tons of palm oil. With Indonesia slashing the export tax on refined edible oil, Indian industry is apprehensive that this may lead to a surge in imports, affecting Indian refiners. India has an edible oil refining capacity of 20 million metric tons a year and imports almost 80% of its edible oil requirement as crude oil. Higher imports of refined products will hurt local refiners.

Earlier last week, India's edible oil industry sought a hike in the import tax on refined palm oil to 16.5% in a bid to control imports from Indonesia and to encourage local oilseeds crushing.India's food ministry is backing local refiners' demand for a higher import tax on refined edible oil to prevent cheap foreign supplies from flooding the market.

Food Minister K.V. Thomas has said that the ministry has put up the matter before the ministries of finance as well as trade for taking a holistic view.

The ministry has also favored the industry's demand for increasing the base value on which import tax is calculated. The base value is currently $484/ton for refined palm oil, much lower than the market price of about $1,200/ton.

Dorab Mistry has further said that if the Indian government raises the base tariff value of refined palm oil to the current price level, it may be viable for importers to continue crude palm oil imports.

All India Sowing Report

2011-09-24T20:57:00.000+05:30

The lastest data released by the Agriculture Ministry shows that area under rice and oilseeds have increased as compared to last year. However, area under pulses has shown a sharp decline. The data shows that rice has been sown in 381.32 lakh hectare as 23rd September 2011. It represents an increase of 33.54 lakh hectare over last year’s acreage on this date. This was mainly on account of higher area coverage reported from West Bengal, Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh and Tamil Nadu.

Oilseeds have been sown in 178.60 lakh hectare, 5.58 lakh hectare more than last year. Higher area coverage has been reported in Maharashtra, Madhya Pradesh, Rajasthan and Uttar Pradesh.

Coarse cereals have been sown in 200.19 lakh hectare. Higher area coverage has been reported from Andhra Pradesh, Madhya Pradesh, Jharkhand and Jammu & Kashmir.

Cotton has been sown in 120.03 lakh hectare. Higher area coverage has been reported from Gujarat, Rajasthan, Maharashtra, Haryana , Madhya Pradesh and Andhra Pradesh.

First Advance Estimates of Crop Production 2011-12

2011-09-21T22:18:00.002+05:30

The First Advance Estimates of production of major crops grown in the country (India) in kharif season has been released and the total foodgrains production is likely to be 123.88 million tonnes (MT) as compared to 120.20 MT in 2010-11 (fourth advance estimates), an increase of about 3.68 MT over the last estimates.

Rice production in the country in the kharif season is likely to be 87.10 million tonnes as compared to 80.65 million tonnes in 2010-11 kharif. Production of kharif pulses is expected to be 6.43 million tonnes as against 7.12 million tonnes last kharif.

Oilseeds production in the kharif season is likely to be 20.89 million tonnes as against 20.85 million tonnes last season. Cotton production is estimated to be 36.10 million bales as against 33.43 million bales last season. Sugarcane production is estimated to be 342.20 million tonnes as against 339.17 million tonnes in 2010-11.

Details of the estimates of crop production are as follows: -

Rains not to affect wheat production

2011-04-18T20:45:00.000+05:30

Allaying fears that the recent rains may damage wheat crop, the government today said the recent downpours in North India will not affect productivity and output of the staple food-grain. "Recent rains will not adversely impact wheat productivity and production, "Agriculture Commissioner Gurbachan Singh told reporters.

He, however, said the cool weather that creates moisture in the crop (due to rains triggered by western disturbances) may further delay arrival of the wheat crop in the mandis. Wheat arrival in the mandis has already been delayed by two weeks in the major producing regions.

Giving reasons for the delay, he said wheat harvested by the farmers contain moisture because of rains and they have to be dried before moving them to the mandis. Western disturbances are common during this time of the year.

"If western disturbances are followed by too much of rains, hailstorm and winds, then it is a matter of concern," he added.

Western disturbances is continuing and it is more this year as compared to the last year, he said. Singh said 60 per cent of the wheat crops in Punjab and Haryana are yet to be harvested. He said wheat yields are expected to be better than last year as the cool weather is contributing to better productivity of the produce. Wheat harvesting which started from April one is yet to pick up.

The Commissioner said that there may not be a problem in harvesting as Meteorological Department has forecast clear weather in the next 15 days. The country is all set to witness a bumper wheat production of 84.27 million tonnes in the current crop year (July-June).

Sarvoday Ashram launches premium khadi brand 'Ekmatra'

2011-04-18T20:39:00.000+05:30

After 60 years of actively promoting the use of khadi wear in India, Sarvoday Ashram that sells 'Khadiline' brand, today announced entry into premium segment with the launch of a new brand 'Ekmatra'.

The UP-based non-profit organisation, which once had trustees like Lal Bahadur Shastri and Acharya Kriplani, said it plans to open 25'Ekmatra'stores and expects a turnover of up to Rs 28 crore from the brand in the next three years.

"Through Ekmatra, we are trying to bridge heritage with the modern generation. We have to make our product relevant to our youth. That is our aim in launching the brand,"Sarvoday Ashram Trustee Partho P Kar told media.

At present, the organisation runs 14 'Khadiline' stores across the country, selling both women and menswear made from khadi. It is positioned in the mass market with prices ranging between Rs 500-1000.

"Ekmatra is our first premium brand. We plan to open around 25 stores in the next three years in around 7-8 cities.

We expect that it will generate a turnover of Rs 25-28 crore in three years period,"he said.

He said under the brand the organisation will sell attires for both men and women within the price range of Rs1000- Rs 6000. It will target the urban customers of 33years and above, he added.

For opening the stores, Kar said it would require anamount Rs 15 crore in the next three years, which will befunded by the trust.

Inspired by Acharya Vinoba Bhave, Sarvoday Ashram wasfounded in 1951 by social activist Rohan Lal Chaturvedi atEtah in Uttar Pradesh, with an aim to create and provideemployment to the rural people.

At present, the organisation employs around 5,000spinners and 500 weavers and makes around 50,000 metres ofkhadi fabrics every year.