Chicago agricultural commodities creep down

The agricultural products on Wednesday crept down on Chicago Board of Trade, as investors expected that the supply is likely to further expand amid globally improved weather conditions.

The most active corn contract for December delivery declined 2. 5 cents, or 0.5 percent, to 4.885 U.S. dollars per bushel. December wheat inched down 5.25 cents, or 0.5 percent, to 6.5825 dollars per bushel. November soybean fell 9.75 cents, or one percent, to 10.62 dollars per bushel.

Traders credited the corn's weakness to a lack of fund support as well as the continued rapid pace of the U.S. corn harvest. Few investors were willing to take new positions before the USDA's report on export sales, which is scheduled to be released on Thursday.

Besides, dry weather and thus a rapid harvest pace are expected to continue through the weekend across the U.S. Midwest. About 37 percent of the crops were harvested as of Oct. 3, 16 percentage points more than the five-year average for corn, the Department of Agriculture said this week.

Even a weaker dollar and further hike in gold failed to support Wednesday's market. The corn market enjoyed two consecutive bulls before Wednesday.

The wheat market also weakened as investors expected that the planted area for soft red winter wheat is likely to expand this autumn and moisture levels are growing better across much of the hard red winter belt.

The soybean was shattered by the news that harvest advances in all major growing areas of the United States and that a dry outlook in Canada would speed up the late harvest of canola there. Editor: yan

Canola cultivation in flood-hit areas

SBP launches Rs 500 million financing scheme

Staff Report

KARACHI: The State Bank of Pakistan (SBP) has launched a concessional financing and guarantee scheme, under which an amount of Rs 500 million has been allocated to encourage farmers to sow canola in the flood affected areas of the country for the current Rabi season.

According to a circular (SMEFD Circular No 15) issued on Tuesday – under the scheme, financing will be provided at affordable/concessional markup rates through banks.

Banks and Zarai Taraqiati Bank Limited (ZTBL) are allowed to obtain following refinance facility to finance the farmers of notified flood affected areas, it added.

Refinance under the scheme will be provided to banks at 5.0% per annum – while the banks will be permitted to charge a maximum spread of 3.0% p.a. from the borrowers, therefore credit to farmers will be available at 8% p.a., according to the circular. This scheme will remain valid up to October 31, 2011.

This new scheme is in line with the government of Pakistan policy for revival of agriculture activities and SBP relief measures for improving access to financing in flood affected areas. “In this regard it is expected that MINFA (Federal Ministry of Food and Agriculture) and provincial agriculture departments would ensure timely availability of hybrid seeds, fertilizer, pesticides and on ground technical guidance to the farmers,” it added.

Under the scheme, agricultural credit will be provided to the farmers for canola cultivation in 17 affected districts as identified by MINFA. Out of the 17 districts, six districts are of Punjab (Layyah, Muzaffargarh, Rajanpur, Rahim Yar Khan, Multan and D.G. Khan), four districts are from Khyber Pakhtunkhwa (Nowshera, Charsadah, D.I. Khan and Peshawar), four are from Sindh (Sukkur, Nausheroferoz, Benazirabad and Larkana) and three districts are from Balochistan (Nasirabad, Jaffarabad and Jhal Magsi).

According to the circular, agricultural credit shall mean only farm credit for meeting the production/working capital requirements, as defined in Prudential Regulations for agriculture financing while all categories of farmers (owner, owner-cum tenant and tenant) of the specified areas will be eligible for agricultural loans under the scheme.

It said the time period of the crop production loans and its repayment will be based on the cropping cycle up to a maximum period of 6 months while there will be no maximum limit for borrowing by the farmers under this scheme. However, the borrowing limit of farmer shall be fixed by the bank keeping in view production cost, cash flows, repayment capacity, risk profile of the borrower, etc., it added.

Principal amount of loans under the scheme shall have to be repaid on the agreed date between the bank and the borrower, however, not later than 60 days from the date of harvest of the crop, it said and added that banks shall not take more than 5 working days in evaluating an application for credit under the scheme from the date of receipt of complete information from the borrower. “Where the request is declined, the bank will explicitly apprise the applicant reasons for rejecting the application,” it added.

Under the Scheme, SBP would share bona fide losses to the extent of 30% out of which 50% claims of losses shall be reimbursed by the SBP when the loan is categorised as doubtful and the remaining 50% at the time of loss. Claims shall be submitted to the SBP on semiannual basis i.e. April 30th and October 31st duly verified/certified by the bank’s internal audit. “However, this reimbursement shall not obviate the lending institutions from the right of recovery of the defaulted amount,” the circular said. Dailytimes

New policy unveiled: Sunflower, canola procurement price fixed

Federal Minister for Food and Agriculture Nazar Mohammad Gondal on Monday announced Rs1,800 per 40 kg procurement price for canola and sunflower and set a target of one million acres of land to be utilised for sowing the two crops in the flood-affected areas.
Unveiling the new policy on canola and sunflower at a press conference the minister said the policy was aimed at providing financial benefit of Rs3 billion to the growers.

The government will procure canola against cash payment in order to give maximum benefit to farmers, he announced.

The government is seriously considering measures to provide relief to the farming community, which has lost its only source of bread and butter. “The canola policy is the beginning and with the start of Rabi season, the government will come up with policies on other crops,” Mr Gondal told newsmen.

The minister said that the government would help and assist the flood-affected farmers to enable them revive the agriculture sector. He said that a package of incentives would be announced before the sowing of each crop in the flood-hit areas.

He said fields would be ready in Khyber Pakhtunkhwa within next fortnight for sowing of canola and sunflower. The seed companies would provide hybrid seeds to farmers on no-loss-no-profit basis through the Zarai Taraqqiati Bank (ZTBL) on deferred payment basis.

Mr Gondal disclosed that the government would provide free of cost seeds to those farmers who would grow canola on at least 50 acres.

On a query, officials of the Ministry of Food and Agriculture told Dawn that the government had with it 50 tons of hybrid seeds and over 100 tons of non-hybrid seeds which would be given to farmers.

Mr Gondal dispelled the speculations that the country might face a severe wheat shortage as the floods damaged the stocks of the commodity. He said that enough strategic reserve was laying in the public sector to meet the local needs. He however said that the exact status would be clear once the floods were totally over and the needs for the next crop seed were calculated.

Mr Gondal stated that the government has in its stock enough wheat and there was no possibility of food insecurity in any province. To ensure food security, the possible export of two million tons of wheat had been deferred till next bumper season.

Reuters adds: Pakistan, Asia’s third-largest wheat producer, said in April it would export 2 million tons of wheat after a bumper crop of 23.86 million tons in 2009/10, and a carryover of 4.2 million tons from the previous crop.

But it held back exports because of low prices in the international market until a recent rally.

“When the next crop is sown then we will have an idea of how big the surplus is and then we will make a decision,” Mr Gondal told the news conference.

Wheat is sown in Pakistan from late October to December.

“We need to see on how much area we can plant wheat,” the minister said.Two food ministry officials had said last week the export plan would likely be shelved over flood worries.

Pakistan has lost at least 725,000 tons of wheat in the country’s worst flooding in 80 years, and experts say water and more rains could complicate planting of the next crop.

The government has 10 million tons of wheat stocks, besides those held by the private sector, Gondal said.