Rabi sowing commences

by Janaki Samant

Sowing for the 2021-22 rabi season has commenced in India. Till 5 November 2021, 9.2 million hectares was brought under cultivation. This was 6.3 per cent more than the area sown in the similar period a year ago. Area sown so far is 14.7 per cent of the normal area sown during the season. Progress of sowing of rabi crops remained satisfactory as in the past four years till the first week of November, actual area sown as a percentage of normal area sown was in the range of 13.4 per cent to 22.3 per cent. The normal area for the 2021-22 rabi season is 62.5 million hectares. During the 2020-21 rabi season, 68.5 million hectares was brought under cultivation. This was an expansion of 2.9 per cent compared to the area sown during the preceding rabi season.

Wheat, rice, jowar, maize, barley, gram, rapeseed & mustard and groundnut are some of the major crops cultivated during the rabi season. The increase in sown area so far can be attributed to more area being brought under cultivation of rapeseed & mustard.

Sowing of rapeseed & mustard had got off to a brisk start. Of the normal area of 6.1 million hectares, the oilseed was sown on 4.5 million hectares till 5 November. This was around 72.6 per cent of the normal area. Area sown was 36.4 per cent higher than the area cultivated in the similar period of 2020. Cultivated area in Rajasthan, Uttar Pradesh, Madhya Pradesh and Haryana increased. By 5 November, area in Rajasthan expanded by 38.2 per cent whereas it increased by 36.6 per cent in Haryana compared to the area sown by 6 November 2020. In Madhya Pradesh, sowing was completed on 0.5 million hectares compared to 0.1 million hectares last year. Rapeseed & mustard prices were at an all-time high of Rs.73.4 per kg. during October 2021. Prices have been rising for more than a year. The high prices seem to be encouraging farmers to expand area cultivated under rapeseed & mustard.

By 5 November 2021, area brought under gram cultivation increased by 2.3 per cent to 2.1 million hectares. Almost 22 per cent of the normal area had been sown so far. Cultivated area expanded in Rajasthan, Uttar Pradesh and Maharashtra but remained lower in Karnataka and Madhya Pradesh.

Area sown under most other major rabi crops such as wheat, rice, jowar and maize till 5 November 2021 trailed area sown in the similar period last year.

Wheat is the main crop cultivated during the rabi season making up almost half of the rabi sown area. Sowing is still in its early stage as a mere 0.1 million hectares was brought under wheat cultivation by 5 November. During the 2020-21 rabi season, area sown under wheat had increased by 3 per cent to an all-time high of 34.6 million hectares. This had led to wheat output rising to a record-high of 109.5 million tonnes. Consequently, the 2021-22 rabi marketing year witnessed the highest-ever procurement of 43.3 million tonnes. For the 2022-23 rabi marketing year, the government hiked the minimum support price (MSP) for wheat by 2 per cent to Rs.2,015 per quintal. Area cultivated under wheat is unlikely to see a fall as wheat is procured by the government and provides an assured return to farmers which is not the case for other crops.

At 3 million hectares, sown area under rabi pulses increased marginally by 0.5 per cent by 5 November 2021. Of the rabi pulses, area under gram has the largest share of 65 per cent. Area under gram cultivation expanded by 2.3 per cent to 0.9 million hectares. Other pulses sown during rabi season are black gram, green gram, peas and lentils. Area under other pulses was lower by 3.4 per cent by 5 November 2021 compared to the corresponding period a year ago.

Sowing of rabi rice is also yet to pick-up pace. By 5 November, area sown was lower by 33.3 per cent to 0.6 million hectares. The normal area brought under rice cultivation during the rabi season is 4.3 million hectares. During the 2020-21 rabi season, area under rice had increased sharply because farmers in Telangana had increased rice acreage by over 50 per cent. Availability of irrigation facilities and expectation of assured returns, as rice is procured by the government at minimum support price (MSP), had encouraged farmers to bring more area under rice cultivation. Following the huge stocks of rice lying with it, Food Corporation of India (FCI) conveyed to the Telangana government that it would not be procuring parboiled rice from the state from the current crop. Parboiled rice is the main type of rice procured in the state. As a result, towards end-September 2021, the Telangana government had informed farmers to shift from rice cultivation to alternative crops such as gram and maize. However, farmers were opposing the government’s diktat to shift to other crops as they were informed quite late. While rice is purchased at MSP there is no such mechanism for the procurement of other crops.

Prospects for rabi output appear to be good. Heavy rains during September and good precipitation in October, as well, has resulted in adequate soil moisture required for rabi crops. Reservoir levels are at 82 per cent of the live storage at full reservoir level (FRL) by end-October which will also aid sowing activities.

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Quarterly CapEx Aggregates
(Rs.trillion) Dec 20 Mar 21 Jun 21 Sep 21
New projects 1.50 2.25 2.64 2.09
Completed projects 0.87 1.17 0.72 1.09
Stalled projects 0.30 0.26 0.32 0.03
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Updated on: 01 Dec 2021 8:28PM
Quarterly Financials of Listed Companies
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All listed Companies
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 PAT margin (%) 8.4 8.8 9.0 9.7
 Count of Cos. 4,460 4,384 4,471 4,487
Non-financial Companies
 Income 0.2 17.7 56.3 35.8
 Expenses -0.7 10.6 57.4 36.3
 Net profit 51.8 221.2 199.9 59.5
 PAT margin (%) 8.8 9.0 8.5 8.8
 Net fixed assets 2.2 13.9
 Current assets 4.4 17.5
 Current liabilities 0.8 6.8
 Borrowings -4.3 21.5
 Reserves & surplus 11.7 18.8
 Count of Cos. 3,282 3,244 3,296 3,281
Numbers are net of P&E
Updated on: 01 Dec 2021 8:28PM
Annual Financials of All Companies
(% change) FY19 FY20 FY21
All Companies
 Income 13.3 0.4 -1.3
 Expenses 13.6 0.4 -3.8
 Net profit 15.2 -10.7 50.4
 PAT margin (%) 2.1 2.1 6.5
 Assets 9.8 8.7 11.4
 Net worth 8.5 4.6 13.2
 RONW (%) 3.7 3.5 8.6
 Count of Cos. 32,313 31,235 8,302
Non-financial Companies
 Income 14.0 -1.4 -3.1
 Expenses 14.2 -1.1 -5.2
 Net profit 21.7 -20.8 40.5
 PAT margin (%) 2.9 2.4 6.0
 Net fixed assets 5.7 10.7 2.0
 Net worth 7.9 2.4 11.0
 RONW (%) 6.4 5.0 9.6
 Debt / Equity (times) 1.0 1.1 0.7
 Interest cover (times) 2.3 1.9 3.2
 Net working capital cycle (days) 74 81 78
 Count of Cos. 25,815 24,885 6,091
Numbers are net of P&E
Updated on: 28 Nov 2021 2:41PM