Deficient monsoon: Govt declares 14 districts in Gujarat 'scarcity hit'
As the monsoon situation shows little signs of improvement, the Gujarat government, on Tuesday, declared 14 districts and 152 talukas of the state as "scarcity hit", reports said.
The government also announced fodder subsidies and out-of-turn power connections among other measures.
Districts which have received less than 155 mm of rainfall till date and talukas with 125 mm have been declared as "scarcity hit" areas, reports said citing Water Resource Minister Nitin Patel.
Every taluka in districts of Kutch, Surendranagar, Rajkot, Jamnagar, Junagadh, Amreli, Porbandar, Bhavnagar, Ahmedabad, Gandhinagar, Patan, Banaskantha, Mehsana and Bharuch have been hit.
Measures being taken include linking of pipelines under Narmada canal network for drinking water purposes.
New tenders are also being floated to begin construction of canals, particularly in Kutch and Saurashtra areas.
"The state has taken a decision to grant Rs. 5000 in subsidy per hectare to farmers who grow fodder for animal on their land. Farmers will also get instant power connection if they assure that they will undertake fodder farming," reports said quoting Patel.
The government has planned 15,000 out-of-turn electricity connections to deal with the problem, Patel added.
Last week on their visit to the state, the Empowered Group of Ministers on drought, headed by Agriculture Minister Sharad Pawar, had announced Rs.4.8bn towards drinking water in badly affected areas in rural Gujarat.
IIFL recommends 'Buy' on PI Industries
IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends “Buy ” PI Industries.
According to IIFL report, the PI Industries (PI) management reiterated the FY13 revenue growth guidance of 30% during Wednesday’s conference call to discuss 1QFY13 results.
The management expects custom synthesis revenue to continue with its strong growth and also sees pick-up in domestic agri-input revenue growth in 2QFY13 due to seasonal acceleration in agrochemical demand, report stated.
Profit margins are also seen expanding YoY. We retain our estimates and reiterate our BUY rating in view of our expectation of strong earnings growth, brokerage added.
The report was published by IIFL’s Institutional Equities Research desk.
IIFL recommends 'Buy' Tata Chemicals
Anil Q1 net profit up 4%
Agro and food processing major, Anil Limited, reported net sales of Rs. 1.64bn for the first quarter ended June 30, 2012 which represents a jump of 21.89% over Rs. 135.11 crore turnover posted in the first quarter of previous financial year. Net profit in current Q1 stood at Rs. 118.6mn, up by 3.69 % over previous fiscal’s Q1 net profit.
Sharing his views on the financial performance of the company, Amol S. Sheth, Chairman and Managing Director of Anil Limited, said, “Sales growth in the current first quarter has been on the back of growth in export markets. We are continuing with our endeavour to introduce innovative and value-added starch-based products in the domestic and global markets.”
The earnings per share (EPS) in the current first quarter were Rs. 12.15 as against Rs. 11.72 in the previous year’s Q1.
Shortfall in rains due to delayed monsoon is likely to make the existing and coming quarters more challenging. Yet, the company with its continued endeavour on value added products, application development and the growth in export markets, is confident to maintain its focus.
Govt gives Rs. 450mn to 5 states for Fodder Development
The Centre has released Rs. 45 crore for enhancing availability of fodder to 5 States. The funds are being provided under Accelerated Fodder Development Programme. Rajasthan gets Rs. 15 crore, Andhra Pradesh and Maharashtra Rs. 10 crore each, and Gujarat and Haryana Rs. 5 crore each.
The Accelerated Fodder Development Programme aims at enhancing availability of green and dry fodder and also mitigating shortage of fodder caused by natural calamities such as drought and floods.
The funds are provided for production of quality seeds, enhancing fodder production and adoption of appropriate technologies.
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US agricultural ABS to weather drought: Fitch
Fitch expects the current drought to have minimal impact on agricultural equipment asset-backed securities (ABS) because of the record 2011 harvest, lower leveraged farms, federal government funding, the use of crop insurance and currently strong commodity pricing. However, we do expect limited performance deterioration on agricultural equipment loans in the latter half of the year.
We believe it is likely that minor upticks in delinquencies and losses will occur. However, available credit enhancement is expected to cover any performance deterioration. All of the agricultural equipment ABS pools we rate employ some combination of reserve accounts, over collateralization, subordination, and excess spread.
While most farm cash receipts from crop sales may feel the impact of the 2012 drought, many farmers benefited from a strong 2011. According to the U.S. Department of Agriculture (USDA), 2011 net farm income increased 24% over 2010 levels and exceeded US$98bn for the first time.
In addition, farmers are in a good position to weather the drought due to strong farm balance sheets. Since 2002 the USDA reports that the average farm has lowered its debt to equity and debt to asset ratios by almost one-third. The average levels are now lower than the anytime since 1960.
We also expect many farmers to take the drought in stride because of direct government payments and pervasive crop insurance. While direct payments are generally small relative to total cash receipts (on average approximately 3.5%), crop insurance premiums are subsidized by the federal government which leads to broad coverage.
As of Aug. 6, 2012, the USDA reports that approximately 73-80% of net crop acreage for corn, soybean, and wheat is covered by some form of crop insurance.
While we do expect the drought to lower crop yields, the commodities markets should soften the blow. Both corn and soybean futures reached all-time highs last month while wheat is near a four-year high. Farmers will benefit from these high spot prices when they sell their 2012 harvest, or any grains they may have in storage.
We will continue to monitor the drought and its affect on agricultural equipment ABS performance and report back.
FAO lowers global rice forecast for 2012
Monsanto Boosts Quarterly Dividend By 25%
CF Industries profit zooms 24%
Keventer now exports Sesame to Mexico