India: Barley output seen up 20% in FY2008 due to record overseas demand and high prices

Unprecedented overseas demand for barley during the last season, which saw prices climb to an all time high, is expected to push barley output by around 15-20 per cent in 2007-08, Business Standard reported December 5.

According to initial market estimates, barley acreage in Rajasthan, the leading producer, will go up by 25 per cent followed by Uttar Pradesh, Punjab and Haryana. Marketmen have attributed the rising acreage to higher prices that the commodity fetched last season.

If weather conditions remain favourable, the crop size may reach 1.6 million tonnes against last year’s output of 1.34 million tonnes, marking the third consecutive year of rise in barley production in the country.

The sowing for the new crop, which is expected to reach the markets in mid-March next year, is in full swing and will be completed over the next fortnight in all major producing regions. The recent rainfall in the northern region, sources said, would help the crop.

“Sowing is on the rise and a better crop is on the cards. Rains, two days back, have resulted in good moisture content for the crop,” said Krishna Kumar Choudhary, a Srimadhopur-based trader. Uttar Pradesh and Punjab are also witnessing the same progress in sowing.

“Country-wide output will be up by 20 per cent. Two more showers over the next three months will boost the production of barley,” said Abhishek Goel, a Jaipur-based barley trader.

Last season, prices of barley (mainly a cattle feed) touched record highs and came close to Rs 1,300 a quintal, a jump of over 85 per cent in a short span of time. On Tuesday, barley prices in Jaipur mandis were hovering around Rs 1,250 a quintal.

The post-harvest barley futures (April, May and June) are hovering around Rs 900 a quintal, down 28 per cent from current prices. This is indicative of higher output. However, trading sources said that prices could slip further.

“With reports of better output, I expect the market to open at around Rs 700 a quintal in April when arrivals begin,” said Goel.

Last April, prices were at Rs 600-650 a quintal levels. Currently, old stocks of barley are reported to be nil. On the National Commodity and Derivatives Exchange (Ncdex), the contract for near-month delivery of barley was trading at Rs 1,230 a quintal.

05 December, 2007