Kharif acreage at an all-time high

by Janaki Samant

Area sown under kharif crops reached 108.2 million hectares by August 28, 2020. This is the highest acreage ever during the kharif season. Acreage expanded by 7.2 per cent when compared to the area sown during the same period last year. This is a very sharp increase in just one year. The area sown this kharif is higher by almost two million hectares when compared to the normal acreage for the kharif season, which is 106.6 million hectares. Sown area is likely to rise further this year. Overall acreage might see an increase in the range of 2.5-3.5 per cent by the time the sowing season ends.

The sharp increase in kharif acreage points to the fact that the pandemic and the subsequent lockdown has had no impact on sowing activities unlike other sectors of the economy.

Good pre-monsoon rainfall, normal onset of monsoon and its rapid advancement over the country and overall satisfactory progress of rainfall during the monsoon season so far contributed to the increase in area sown during this kharif season.

Acreage has increased across almost all crops including, rice, coarse cereals, all major pulses, oilseeds and cotton by August 28. Acreage under most crops exceeded their normal area for the season which is the average of the past five years.

Area sown under rice reached 39 million hectares expanding by 10 per cent by August 28. Area sown under this staple cereal is expected to expand further. Normal acreage is 39.7 million hectares. The ten per cent growth seen in rice sowing so far may taper in the coming weeks because there was a rather rapid increase in rice sowing towards the end of the season last year. Nevertheless, area under rice during kharif 2020 is likely to be 4-5 per cent higher than it was in kharif 2019.

Acreage under coarse cereals reached 17.7 million hectares by end-August. It is marginally lower than last year’s acreage of 18 million hectares and the normal acreage of 18.5 million hectares. With another fortnight left before kharif sowing ends, acreage under coarse cereals is likely to continue and cross the normal acreage.

Maize is the largest coarse cereal sown during the kharif season. Acreage reached eight million hectares by August 28. Since the past 3-4 years, acreage under maize has stagnated at around eight million hectares. Following the pandemic, demand for maize was likely to weaken as the poultry business was hit by weak offtake from the hotel industry. This was likely to reflect in a decline in acreage as maize is used as poultry feed. By August 28, acreage was up by 1.2 per cent. But by the end of the season, sown area is likely to see a fall of 1-2 per cent.

Substantial acreage is also covered under bajra. At 6.7 million hectares, area under the crop expanded by 2.6 per cent by August 28.

Area under kharif pulses has crossed the normal acreage. It was 104.4 per cent of the normal area sown by August 28. Acreage under all major pulses like arhar, green gram and black gram has crossed the normal acreage for the season.

By end-August, area under arhar reached 4.7 million hectares. Acreage has expanded by 5.7 per cent and is 106.3 per cent of its normal level. It is also the highest compared to the area sown during the past three kharif seasons. But it is still not anywhere close to the acreage of 5.3 million hectares sown during the 2016 kharif season. At 3.5 million hectares, acreage under green gram reached an all-time high when compared to the area sown during the kharif season in the past.

Soyabean is the main oilseed sown during the kharif season. It accounts for over 60 per cent of area sown under oilseeds during this season. By August 28, acreage reached 12.1 million hectares, the highest compared to area sown in the past six years.

Madhya Pradesh and Maharashtra have seen soyabean acreage increase by 7-8 per cent. Last year the standing crop in Madhya Pradesh had been severely damaged because of late rains. Farmers were hoping for a bumper harvest this year given the increase in acreage and timely rains. However, output is likely to shrink as there has been a stem fly attack which is expected to severely damage the crop. There have also been reports of pest attack on the soyabean crop in Maharashtra, Rajasthan and Madhya Pradesh.

Groundnut acreage has reached an all-time high of five million hectares by end-August. This is 35.9 per cent higher than the acreage covered under the oilseed last year. Farmers in Gujarat, the largest producer of groundnut, followed by those in Rajasthan have increased acreage by over 30 per cent, each. Sowing of this oilseed is almost complete.

At 12.8 million hectares, cotton acreage showed an increase of 2.8 per cent by August 28. By the end of the sowing season, the increase in acreage will come down to around 1.5-2 per cent. The largest cotton growing states of Gujarat and Maharashtra have seen a decline in acreage. But in Telangana, acreage expanded by over 30 per cent. In Punjab it increased by 24.6 per cent as farmers moved to cotton from rice.

The sharp expansion in acreage across most major crops and the strong revival in monsoon in August after a lull in July indicate a bumper harvest this season. However, continued heavy rains pose a threat to the kharif crop. Rainfall at over 40 per cent above the long period average (LPA) was recorded during week-ended August 19 and week-ended 26 August. If such heavy rains continue for another one or two weeks, crop prospects will suffer. Severe virus and pest attack can play spoilsport to the otherwise bumper outlook.

CMIE STATISTICS
Unemployment Rate (30-DAY MVG. AVG.)
Per cent
7.0 -0.8
Consumer Sentiments Index
Base September-December 2015
46.5 -0.4
Consumer Expectations Index
Base September-December 2015
48.7 -0.6
Current Economic Conditions Index
Base September-December 2015
43.0 0.0
Quarterly CapEx Aggregates
(Rs.trillion) Sep 19 Dec 19 Mar 20 Jun 20
New projects 3.25 5.55 3.91 0.68
Completed projects 0.84 1.66 1.73 0.24
Stalled projects 0.41 0.61 0.76 0.11
Revived projects 0.43 0.83 0.42 0.59
Implementation stalled projects 0.91 0.13 9.76 0.08
Updated on: 24 Sep 2020 8:28PM
Quarterly Financials of Listed Companies
(% change) Sep 19 Dec 19 Mar 20 Jun 20
All listed Companies
 Income -2.3 -1.7 -4.9 -28.1
 Expenses -3.1 -2.2 -1.8 -28.4
 Net profit -1.3 -10.8 -47.4 -41.1
 PAT margin (%) 5.3 5.1 2.4 5.3
 Count of Cos. 4,452 4,431 4,244 4,112
Non-financial Companies
 Income -6.3 -5.5 -8.9 -38.4
 Expenses -6.7 -6.4 -4.9 -38.4
 Net profit -13.8 -13.8 -48.4 -60.2
 PAT margin (%) 5.7 5.7 3.4 4.2
 Net fixed assets 10.4 12.9
 Current assets 4.9 3.0
 Current liabilities 5.0 4.8
 Borrowings 8.3 14.7
 Reserves & surplus 5.7 2.1
 Count of Cos. 3,328 3,307 3,198 3,098
Numbers are net of P&E
Updated on: 24 Sep 2020 8:28PM
Annual Financials of All Companies
(% change) FY18 FY19 FY20
All Companies
 Income 8.4 13.4 1.2
 Expenses 9.9 13.6 1.6
 Net profit -40.3 21.9 -12.3
 PAT margin (%) 2.0 2.4 5.1
 Assets 10.9 9.3 9.9
 Net worth 7.5 8.6 6.8
 RONW (%) 3.5 4.3 7.2
 Count of Cos. 27,531 26,568 2,842
Non-financial Companies
 Income 8.7 13.9 -2.3
 Expenses 8.8 14.0 -1.6
 Net profit -9.0 25.0 -19.7
 PAT margin (%) 2.7 3.2 5.8
 Net fixed assets 7.1 5.3 16.0
 Net worth 6.1 8.6 3.9
 RONW (%) 5.7 6.9 9.6
 Debt / Equity (times) 1.0 1.0 0.7
 Interest cover (times) 2.1 2.4 3.6
 Net working capital cycle (days) 77 70 47
 Count of Cos. 22,401 21,603 2,134
Numbers are net of P&E
Updated on: 20 Sep 2020 8:59PM