Demand for agricultural loans and storage facilities expected to increase during current Kharif season

Demand for agricultural loans and storage facilities is expected to increase dramatically during the current Kharif season as the pandemic situation appears to be under control and the impact of erratic rains remains minimal, the finance and storage companies said. agricultural.

They expect strong growth in Uttar Pradesh, Madhya Pradesh, Rajasthan, Gujarat, Karnataka and Maharashtra, especially from producers of rice, corn, bajra, soybeans, peanut and cotton.

“As Covid-19 cases decline and the pace of vaccination picks up, we expect overall loan disbursements to double this season,” said Sandeep Sabharwal, CEO of Sohan Lal Commodity Management Group Pvt Ltd (SLCM), a leading agricultural logistics and finance group. “In the current fiscal year, we plan to provide financing against a diverse basket of commodities and agricultural products, such as loans to agricultural producer organizations and non-bank financial corporations (NBFCs).”

He said a variety of crops like paddy, rice, corn, bajra, soybeans, peanuts and cotton are expected to experience high demand.

“Resilient rural demand will continue to be supported by high production figures and higher purchase prices for the 2021-22 season, as well as an overall rebound in economic activity,” Sabharwal said. “States like Haryana, Punjab, Uttar Pradesh, Madhya Pradesh, Maharashtra, Gujarat and Karnataka will be the most sought after for agricultural loans.

SLCM realizes most of its agricultural loans through its wholly-owned subsidiary Kissandhan Agri Financial Services.

Origo Commodities, an agriculture based in Gurgaon

company that provides structured trade finance on agricultural commodities, said loans during this year’s Kharif season are expected to soar 150% year on year to Rs 450 crore, from Rs 180 crore in the last kharif.

“The factors driving growth are… the opening of farmer supply centers in the UP and Rajasthan this season and the onboarding of new customers,” said Sunoor Kaul, co-founder of Origo Commodities.

Sourcing is a key asset because it offers better price discovery for customers and producers, he said.

Warehousing companies are increasing their capacity to cope with increased demand.

“New agro-infra fund projects for the construction of agricultural infrastructure near the APMCs will provide additional storage capacities of approximately 0.8 to 1.0 million metric tons,” said Unupom Kausik, president of National Commodities Management Services (formerly National Collateral Management). Services), the largest private post-harvest farm management company in the country.

He said the impact of erratic rains this Kharif season will be minimal on most crops except cotton and groundnuts in Gujarat and to some extent guar and moong in Gujarat. western Rajasthan. “The recent rains have been very beneficial for most of the Kharif areas,” Kausik said.

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