The kharif season, which began on a dismal note, seems to have gained pace after the late pickup in monsoon in July. The revival in monsoon after a dry June has helped farmers accelerate crop sowing, bringing it closer to last year’s level. As of July 26, total agricultural sowing was down 6.4 percent year-on-year (YoY), from a deficit of 26 percent YoY at the beginning of July. Among non-food crops, sowing acreage for cotton has increased by 6.3 percent YoY, according to an Edelweiss report. 

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Prices of key kharif crops have seen stable appreciation. Maize, however, has shot up by 68 percent YoY. The price trend reflects softness in demand for crops such as soyabean and cotton, it said.

Global scenario: Adverse weather in NAFTA impacted growth
 Extremely cold climatic conditions in North America have led to deferment of sowing of maize. In Europe, northern and western regions are still grappling with the heat wave. However, regions such as EMEA and Latin America continue to perform well on account of favourable climatic conditions.

Government thrust and global agri-cycle key drivers:
The pickup in global agrochemical cycle along with strong order books bodes well for contract research and manufacturing services (CRAMS) players such as PI Industries, SRF (Specialty chemicals - A balanced equation). While the domestic scenario remains bleak, the brokerage has given BUY calls for Dhanuka Agritech and Coromandel International given their favourable risk-reward ratios.