Delayed arrival of Monsoon :

• As per IMD report : This year, the onset of southwest monsoon over Kerala this year is likely to be slightly delayed as compared to normal date of onset. The monsoon onset over Kerala this year is likely to be on 5th June with a model error of ± 4 days.

OUR ANALYSIS

• This is BULLISH for the Agri market. Any delayed arrival in Monsoon could lead to delayed sowing, delayed harvesting, lower sowing and a fall in crop productivity.

 2nd PHASE OF REFORMS IN AGRICULTURAL SECTOR

•  Amongst many announcements of Steps by Honorable Finance Minister Smt Nirmala Sitaraman to revive Agriculture, the notable was providing Rs 1 Lakh Cr for Agri infra fund to boost EXPORTS amongst other things.
• Also, provision of 500 cr for top to total initiatives to boost supply chains : Transportation and storage main focus – 50% subsidies in each.
• Initiatives to ensure farmers can sell produce to anyone. Steps initiated for free flow of produce. Barrier-free interstate transport allowed. Agri produce price and quality assurance schemes to ensure better realisation of prices.

 OUR ANALYSIS

• This is again BULLISH for the Agri market as all these initiatives will help RAISE farmer income, when properly implemented.
• With prices having fallen a lot for the agri sector due to Coronavirus, further fall may be limited. The adverse impact of the virus on the trading aspects may gradually get over as Indian Government takes initiatives to open mandis and facilitate demand – mainly on the EXPORT side. This will be a critical supporting factor for the prices in the medium to long term.