Companies & Sectors
Unseasonal rain causes havoc for grape farmers

About 30-40% of the grape crop is estimated to have been damaged in grape-growing areas of Maharashtra, compounding the wine industry’s problems

Unseasonal rain showers have damaged crops in many parts of Western India. Much of this loss has been in Maharashtra where onions, soybeans and grapes have suffered seriously. Grape growing areas such as Nashik, Sangli and Baramati have been particularly affected with up to 30-40% of the crop destroyed, according to industry experts.

 "This year too, the post-monsoon, unseasonal rain has caused havoc in the grape-growing regions of Maharashtra. A large part of the crop has been destroyed and the Downey mildew if not controlled will affect the quality of whatever remains," said Subash Arora of the Indian Wine Academy.

Mr Arora feels that growers have little hope of getting better prices for what remains of the crop, to be able to make up for the losses. The prices could be as much as 30-40% from last year, he said.

Rajesh Jadhav, secretary, All India Wine Producers' Association, said that the wine industry has been through a liquidity crunch in the past two years and the unseasonal rain will add to the problem. "About 30-40% of the grape crop has been destroyed. Already, most of the wineries have unsold stock of wine due to lack of demand. Grape farmers are faced with poor demand and now the rain has caused further losses," Mr Jadhav said.

The grape crushing season begins around February every year and the prices of grape wine are also determined at the same time. With only a few wineries buying the grapes, grape farmers will have to settle for lower prices.

"Around 65 of the existing 70 wineries in Maharashtra are owned by small farmers who also grow grapes. Since all of them are already stocked with unused wine, there is very little demand. The other wineries are owned by corporate and have their own grape farms. Even if they buy from small farmers it is on an agreement basis, which doesn't get the farmers much revenue," Mr Jadhav explained.

It is a little early to determine the supply and price of wines in the market. Some information should be available when the crushing season begins.

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RBI policies cannot check food item-driven inflation: DIPP

New Delhi: The industry department today said the Reserve Bank of India’s (RBI) fiscal and monetary policies will not be able to check rising prices, as inflation is being driven by a shortage of agricultural commodities, reports PTI.

“... Inflation is driven by food items and it is something which will not respond to fiscal or monetary policies. So we have to certainly reinvent our agriculture,” Department of Industrial Policy and Promotion (DIPP) secretary RP Singh said at a Nikkei Global Eco-Business Forum here.

He said that to meet the food shortage in the country, there was a need to bridge gaps in the food value chain and set up more food processing units.

Overall inflation stood at 8.58% in October, while food inflation stood at 10.15% for the week ended 13th November.

The RBI has also expressed concern over rising inflation and said the prevailing level is above its comfort zone.

Currently, about 60% of India's population is engaged in agricultural activities, but the sector contributes just 18% to the country's GDP, Mr Singh said, adding that “inclusive growth cannot come unless we reinvent agriculture.”

The Indian economy grew by 8.9% in the second quarter of the current fiscal, up from 8.7% in the corresponding period a year ago.

The government today exuded confidence that the GDP growth rate during the current fiscal would exceed 8.75%.

Finance minister Pranab Mukherjee said, “Amid all the depressing news, there is good news... We may be confident that at the end of this year the GDP growth will not be less than 8.7%-8.75%... It may be more.”

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Gas output from RIL’s eastern offshore fields drop 15%

New Delhi: Reliance Industries’ (RIL) prolific D-1 and D-3 gas fields off the east coast have seen a 15% drop in production to about 45-46 million metric standard cubic meters per day (mmscmd) because of reservoir complexities, reports PTI.

The Dhirubhai-1 and 3 fields, known as D1 and D3, in the Krishna Godavari basin have seen output fall from 53-54 mmscmd achieved in mid-2010 to 45-46 mmscmd, sources privy to the development said.

D1 and D3 are the largest among the 20 oil and gas finds that Reliance and its Canadian partner Niko Resources have made in the Krishna Godavari basin KG-DWN-98/3 or KG-D6 block off the Andhra coast.

“The reservoir is a complex reservoir and has not behaved as previously modelled,” a source said.

Besides D1 and D3, D-26 or MA oilfield in the same block, is producing about 8 mmscmd as associated gas. Together, the output from KG-D6 currently stands at around 54 mmscmd.

Reliance has been forced to restrict production from the MA field to less than 20,000 barrels per day due to high water and gas output, sources said, adding the field was yielding more water than oil and even 8 mmscmd of gas in comparison to 20,000 bpd of oil was considered quite high.

A company spokesperson did not immediately revert calls made for comments.

KG-D6 block had earlier this year hit a peak of 60 mmscmd after which the output has fallen, sources said.

Sources said RIL will have to drill more wells to boost output to the approved peak of 80 mmscmd. Currently, 18 wells on D1 and D3 have been completed and hooked to production system but only 17 are producing.

The company is not drilling any production well at the moment as it is concentrating on completing the mandatory appraisal of other discoveries it has made in the block.

In the absence of drilling appraisal wells to delineate the discovery in a prescribed timeframe, Reliance would lose that area of the block.

RIL is yet to complete four out of the total 22 approved wells for phase-1 of D1 and D3 field development plan.

The company is currently selling 14.5 mmscmd of gas produced from KG-D6 to fertilizer plants, 26.5 mmscmd to power plants and remaining 13 mmscmd to other sectors like sponge iron plants, LPG, city gas distribution (CGD), petrochemical plants and refineries.

The petroleum major had previously stated that it is carrying out further optimisation exercises at the MA oilfield in view of increasing water production levels. The field has five oil producing wells and one gas injection-cum-gas producer well.

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