Kharif Harvest Outlook: Strong prices expected for most crops, except Bajra and Moong

The upcoming Kharif harvest is anticipated to yield strong market prices for most crops, except for Bajra (Pear Millet) and Moong (Green Gram), which are lagging with prices 31% and 13% below their Minimum Support Prices (MSPs), respectively. Among the 14 Kharif crops for which MSPs are announced, nine, including Maize, Jowar, Tur, Urad, and Soyabean, have been sold either at par with their respective MSPs or higher as of September 4, according to Agmarknet data.

Paddy, a key Kharif crop influenced by government procurement, currently shows an average price of ₹1,965/quintal in Uttar Pradesh. Despite concerns over El Nino-induced productivity losses, mandi prices for Bajra, Paddy, Moong, Groundnut, and Soyabean are operating at a negative margin ranging from 0.6% to 31% below their next season's MSPs.

Maize, Jowar, Tur, and Urad are over their MSPs by up to 11%. The government's procurement of 40% of paddy production is expected to boost market prices once purchases commence, while soyabean prices are currently higher compared to the previous year, despite strong imports. Groundnut in Gujarat, the top producer, is also expected to perform well this year, with prices likely to rise.

Maize prices are anticipated to fall once the crop is harvested as its demand will compete with other animal feed such as soyameal and DDGS. Despite historical data indicating potential production losses due to El Nino, the market seems to have factored this in, with present prices already adjusted. The sudden drop in Soyabean prices is currently unexplained, but cartelization might be the reason.

Overall, all major crops are expected to see prices aligned with their MSPs for their FAO grade, except for Moong, where government stock disposal may keep prices below MSP.