Rain Effect on Indian Agricultural Commodities Market

Recent unseasonal rains during March and early April month have caused significant damage to the standing crops which were ready for harvesting in states of central and north India.

As expected, agricultural commodities market has reacted sharply to this event.

In the first fortnight of April month, the prices rose significantly in some commodities. 

Table 1 and figure 1 given below show the extent of price rise in few important commodities in the Indian futures market.

Jeera(cumin), Chana (Chickpea) and Mustard seed have seen highest price rise among the Rabi season crops. 

The cascading effect is also seen in the commodities like soybean and soy oil.

However, in Wheat not much change is seen because the government of India has ample buffer stocks with it. Further government has also started wheat procurement at MSP.

Once the government procurement programmes end by June, the wheat market is also expected to witness significant price rise during this marketing season.

Sharp Positive Reaction in Indian Commodities Market on further crop damage due to recent rains

Recent rains and hail storm in many parts of north India during past week till yesterday has put farmers in further trouble as harvesting process of Rabi season crops like wheat is further delayed and to some extent there has been loss to the crops also.

Please note that during March and till this Sunday rains in many states particularly north Indian states have caused a considerable loss to the rabi crop production. There are also issues of quality deterioration. The extent of loss varies from farmer to farmer and state to state.

The states and central government have made an assessment of crop damage and appropriate relief measures are being taken by the concerned agencies.

This recent spell of rains/hail storm/squall has become a turning point for some of the commodities which were in search of a fresh direction in market.

And now this positive momentum seems more vigour than expected particularly in commodities like Chana (Gram), Jeera (Cumin), Mustard seed, Barley  and wheat and may last for medium term.

The cascading positive effect will also be seen in other oilseeds like soybean, edible oils like refined soy oil, crude palm oil and cotton etc.


Right now most of the above mentioned commodities are up in the range of 1 to 4% from their previous close. 

Farmers again on the mercy of Rain God in India

Farmers of many states like Rajasthan, Madhya Pradesh and Maharashtra have yet not come out from the trauma of crop loss due to unseasonal rains during first fortnight of March. However, the states/central government have announced different relief (financial assistance) packages for the farmers.

And again Rain God seems to have annoyed from the farmers. As per the IMD, the rains/hail storm/squall are likely to occur at many places in the next one to two days.

The Rabi crop harvesting is underway in most parts of the north India. Major contribution to the food crops comes from the states like Punjab, Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh.

Have a close eye on the RABI SEASON CROPS like WHEAT, GRAM (Chana), BARLEY, MUSTARD SEED (RMSEED), CUMIN (JEERA), Coriander (Dhaniya)  in India market.   

It is to be seen that impact of this rain on the crops and accordingly the market direction would  be decided. 

It seems that Next week movement would  be volatile with a positive bias in the above mentioned commodities.



Source: IMD, 29 March 2015

Source: IMD, 29 March 2015

Source: IMD, 29 March 2015

Rains and hailstorm Damage Crops in Many parts of the India

Recent rains in various parts of the country for the past couple of days have badly affected the crop production.

Various print and electronic Media reports of India have shown pictures and visuals  of crop damage due to hailstorm and waterlogging in fields.

Farmers of the states like Rajasthan, Madhya Pradesh and Maharashtra are among the worst sufferers.

In Rajasthan some people died while many injured due to this unseasonal rains and weather disturbance.

Rabi crops like Mustard seed, wheat, Barley, Gram, Masoor, Jeera (Cumin), Potato and Onion have seen maximum loss.

Please note that Madhya Pradesh is one of the major producers of Wheat and Gram (chickpea) while Rajasthan stands first in Mustard production. Other crops like Onion and Cumin are also among major crops of Rajasthan.

In Maharashtra crops like Onion and horticulture crops like pomegranate and grape have seen losses.

In many cases the quality issues will be raised in time to come.

The final assessment of production loss is yet to be made by the government agencies. The farmers say that more than 50% of the crops are lost either in terms of production or quality.

The market will surely adjust itself once some clear picture emerges. But one thing is sure that ample amount of damage is there to some of the crops.

In near future in March or in Early April if again weather turns unfavorable then it will be really hard to save the remaining crops because in the north Indian states like Haryana, Punjab, UP and Bihar harvesting of crop would be in full swing and any unseasonal rain during that period may put farmers in great trouble.

Strong US dollar Index and Weather Concerns Support Indian Agricultural Market

Indian edible oil market witnessed some recovery on Friday mainly due to short covering by the sellers.

Strong US dollar against Indian currency also added support to the edible oils i.e soy oil and crude palm oil as Indian is the net importer of these oils.

Weather concerns also encouraged bulls as there is forecast of widespread rains in many parts of the country for the next 3-4 days which may result in to some loss to the standing crop and delay in harvesting process of the crops like Mustard seed, Chana wheat.

Yesterday we posted in our blog that some recovery might be seen in the market.

On next week too, if intensity of rains remain high then market may witness some more gains in the above mentioned commodities.

Next week may witness increased volatility in the agricultural commodities market.