With the monsoon deficit shrinking and the Government keen to crack down on hoarders, prices of most essential commodities such as edible oil, sugar and wheat are showing signs of softening in the wholesale market.

After a lacklustre start, the South-West monsoon has recovered since mid-July. The rainfall deficit has shrunk to 19 per cent currently.. The deficit in central India is six per cent compared with the normal rainfall.

Sugar slips

The drop in commodity prices is rather timely, with the market expecting higher demand for the festival season. Sugar prices in the Mumbai wholesale market dropped to ₹3,200 a quintal on Monday from ₹3,280 on July 23, despite festival demand kicking in. M-grade sugar was down at ₹3,360 from ₹3,390, as most of the demand from the eastern States was being met from Tamil Nadu and Karnataka which had a good season last year, said Ravikant Narne, a Mumbai-based sugar trader.

Sugar prices, however, are expected may remain under pressure as mills try to offload their inventory with the new crushing season beginning from October.

Export options are less lucrative even with an export subsidy of ₹3,371 a tonne, as Brazil and Thailand are reporting to coming up with a bumper crop this year. Though the mills in Uttar Pradesh are exerting pressure on the Government to bring down cane prices, the country has enough stock to meet any eventuality, said Narne. Groundnut oil prices have dipped to₹775/10 kg from ₹825, while refined soya oil was down to ₹630 from ₹660 and palmolein slipped to ₹553 from ₹580.

The revival of the monsoon has resulted in the area under soyabean cultivation inching closer to last year’s level.

Sowing improves

As on August 8, the area under soyabean planting was at 10.31 million hectares compared with the normal area of 10.11 million hectares.

The overall oilseed planting including groundnut has improved to 15.22 million hectares, inching closer to the normal area of 15.62 million hectares.

Cotton prices have also fallen sharply as the coverage has improved substantially. Gujarat Shankar 6 prices dipped to ₹40,000 a candy (of 356 kg) on Monday, from ₹42,000 on July 23. The area under cotton cultivation was at 11.22 million hectare against the normal area of 11.45 million hectare.

Besides cracking down on hoarders, the Government has taken steps to improve the supply of key vegetables such as onion, potato and tomato.

Hoarding under control

The National Agriculture Co-operative Marketing Federation of India has floated a tender to import 40,000 tonnes of onion from Pakistan.

The Government has already approved the import of 70,000 tonnes of onions from other countries such as Iran, Egypt and China to bridge the supply gap.

“Hoarders of perishable commodities are already on tenterhooks. Tomato prices are already down to ₹40 a kg in the wholesale market, and it is time other vegetables also fall in line,” said R Kishorechand, a dealer at the Vashi wholesale market near Mumbai.