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Farm commodity prices soften on monsoon hopes, cereals lead fall

business-standard.com    6/12/2019 5:50:00 PM    ReadCount:297

   Prices of agriculture commodities have softened on hopes of a normal monsoon, following a steep rise in first half of May on concerns that the heat wave would take a toll on rainfall. Prices in several commodities began correcting in the middle of the last month, and in many more during the past one week.

  Among cereals, maize and bajra have seen sharp fall, followed by guar seed and castor seeds. However, oilseeds led by Soybean, and other farm produce such as wheat, pulses, spices and even cotton fell.
  Ajay Kedia, director Kedia Commodities says, “Prices of all major agri commodities like sastor, soybean, coriander, turmeric, jeera and cotton have fallen since early June due to various reasons such as a severe cash crunch that forced both farmers and traders to sell their stocks after recent gains. The approach of monsoons will add further pressure in coming days.”
  During the general elections, there were no updates from the Indian Meteorological Department on monsoon but once polling was over, IMD said in its second forecast of the season that monsoon would be normal.
  Traders used the forecasts as the trigger. While players in the futures market were waiting for an opportunity to book profits or generate liquidity, those in the spot market, who were already reeling under a cash crunch, also sold their stocks, setting off a fall in prices, starting in the second half of May. Some traders incurred mark-to-market losses in long positions, which forced them to sell.