After decadal low of 1% growth last fiscal, dairies to log 5% to 6% growth this fiscal, says Crisil
Revenue of the organised dairy sector in India, after churning to a decadal-low growth of ~1% last fiscal, is expected to grow 5-6% to Rs 1.5 lakh crore this fiscal. Healthy demand revival in value added products (VAP, 30-35% of organized sector revenue) post pandemic effect last fiscal, lower restrictions as compared with the earlier covid wave, and steady demand for liquid milk (65-70% or organized sector revenue) will help support overall growth in the current fiscal, said Crisil in a report on dairy sector.
“With increasing demand, milk procurement prices are expected to increase; albeit higher sale of VAP will buttress material impact on profitability. Besides, skimmed milk powder (SMP) inventory will also decline by the end of this fiscal from the peak seen last fiscal, easing working capital borrowings. Almost stable profitability, controlled working capital and prudent capital spend will keep credit profiles of dairies ‘stable’. This is as per an analysis of 65 CRISIL-rated dairies, which account for over two-thirds of the organised segment revenue. VAP will see ~7% growth this fiscal compared with a contraction of ~3% last fiscal. Demand for most VAP products such as ghee, butter, cheese and milk powder is expected to remain healthy,” a release from Crisil said.
India’s foodgrain output to rise 2.66% to record 305.43 MT in 2020-21, says government
India’s foodgrain production is estimated to rise 2.66 per cent to a new record of 305.43 million tonnes in the current crop year 2020-21, on better output of rice, wheat and pulses amid good monsoon rains last year, the agriculture ministry said on Tuesday. In the 2019-20 crop year (July-June), the country’s foodgrain output (comprising wheat, rice, pulses and coarse cereals) stood at a record 297.5 million tonnes.
Releasing the third advance estimates for the 2020-21 crop year, the agriculture ministry said foodgrain production is projected at a record 305.43 million tonnes.
Covid-induced uncertainty dampens demand for premium Darjeeling tea
Darjeeling first flush tea, or Chateau Lafite Rothschild for those in the trade, has failed to find many takers this year as the Covid-19-induced economic uncertainty has dampened demand for the variety which used to sell for Rs 9,000-10,000 per kg before the pandemic.
A few buyers from Germany and Japan have offered a marginal price hike while other buyers are negotiating for a lower price for the tea which hardly comes to auction centres and is sold privately by Darjeeling’s tea producers.