Irrespective of the fact that the monsoon has covered most parts of the country, the next fortnight is going to be crucial for the kharif crop. Concerns over the crop size have still not receded as rain has been deficient till now.
Commodity experts say that sowing should be over by mid-July, but it all depends on the performance of the monsoon during the current month. The sentiment in the agri futures market has already shown a softening trend. But market observers caution that it would be too early to say whether the prices would continue to slip or move up.
Madan Sabnavis, chief economist of the National Commodity and Derivatives Exchange (NCDEX), told Business Standard, "It is difficult to predict the market movement. But yes, rain during the next fortnight will be a crucial factor for crops."
Commodity experts too are keeping their fingers crossed about the direction of the market.
Navin Mathur, associate director, currency and commodities, at Angel Broking, said, "The monsoon is not up to the mark yet. It is only the sentiment that is making the market bearish. In case, the monsoon remains deficient, the commodity market may go up."
The near-month contracts of a majority of agri commodities ruled firm till mid-June. The prices started declining with the onset of the monsoon and its movement across the country. However, the production, be adequate, said commodity market observers, depended heavily on rainfall in July.
A section of experts maintained optimism that the monsoon rain would not be deficient and there would be adequate rainfall for proper sowing of crops. Raghuraman, research head of Agriwatch Commodities, is hopeful of rain prospects. He said, "Though the monsoon continues to be deficient to date, it is expected to make up in July when most of the sowing will be completed."
Agreeing to it, Amol Tilak, research head of Kotak Commodities, said, "On the technical front, the monsoon has reached different regions of the country on time. Sowing of various kharif crops should be completed by mid-July, and I do not see the monsoon to remain deficient. The prices of agri commodities will further soften on the back of good rainfall."
Though monsoon is primarily responsible for the price movement of the kharif crop, other factors also play a role in stoking bearish sentiments in the market.
In case of turmeric, the main growing areas in the country have not seen rain in the initial days of sowing. Commodity analysts tracking turmeric said that prices of the yellow spice might bounce back if it did not rain adequately.