| |JUNE 20219Q1 this year and was expected to pull back sharply to 6.5 million mt or lower in Q2.Regional lockdowns threaten mobility and industrial ac-tivity. Refiners are reported to have cut run rates marginal-ly. The Run rates remained good until March, with average runs rising to 99% in March from 97% in February.The aviation and industrial fuel demand will take a hit. Some refineries may cut jet fuel and diesel output as. Some of the major construction projects were reported to have been put on hold in an effort to avoid crowded work envi-ronments.GAS: Likewise, country's city gas demand could drop by 25%-30% in the coming months. LNG regasification vol-umes are reported to be down by more than 10%. Higher in-ventories are further reported at Dahej and Hazira. Contracted cargoes may not have been cancelled however the spot demand is said to have been affectedSteel: Steel production may be least affected .Tata Steel, JSW Steel and ArcelorMit-tal Nippon Steel India have announced plans to supply oxygen for medical use.Despite the tumble in the automo-tive sector, hot-rolled coil prices remain high in India even as domestic steelmak-ers step up efforts to supply liquid medi-cal oxygen to offset the strain caused by the surge in COVID-19 infections.Steel consuming sectors were, however, undergoing a greater degree of operational cuts due to the oxygen short-age. Maruti Suzuki and Hero MotorCorp, recently announced temporary production shutdowns.The Pandemic situation could potentially disrupt pellet exports. The Indian seaborne pellet prices are facing rising pressure . At the ports, the loading operations are likely to be affected due to manpower shortage.Agriculture: Agriculture and allied activities have been exempted from government restrictions so far, several mar-kets remain closed. Micro and local level restrictions have stagnated market demand for agricultural commodities in some pockets· Rabi crop and harvest is expected to be good. However the storage and transportation could be tricky under current circumstances. Hopefully, the good harvest will have salutary impact. During the previous year, it was positive· Agricultural exports for commodities, such as sugar, are steady. The sugar stocks have been seeing upward trend.· Almost three fifth of the country's palm oil consump-tion comes from hotels, restaurants and food catering sectors. The demand may be affected.· With some markets shut and supplies remaining tight, domestic wheat prices had risen in other trading centers. In Rajasthan's key market, Jai-pur, wheat prices increased to nearly Rupees 18,742/ mt ($250/mt) against around Rupees 17,769/mt at the begin-ning of April.· According to USDA Attache, the Wheat exports from India during the year 2021-22 could be at 2 million MT , 26% lower compared to previous year· At Indore , the major trading center in Madhya Pradesh state , the demand of wheat has been hit as the market is shut due to the lockdown imposed by the state gov-ernment.· The farmers may find it difficult to sell to private trad-ers due to localised restrictions of movement of people and goods. The market participants in physical markets opine that the total wheat procurement by the govern-ment from farmers could exceed expectations as. This could potentially tighten supply in the open market and lead to a rise in domestic prices.Oilseeds & Impact on Cotton - The edible oil pack gave phenomenal returns in FY21, with crude palm oil topping rising as much as 73%. Soybean was also a major gainer, with the price jumping 63 per cent followed by soy oil (58 per cent).Farmers could be more inclined towards cultivating oil-seed crop against other kharif crops such as cotton, which can give good returns in the latter part of the year on any decline in acreage compared with last year. The exponential surge in India's COVID-19 cases has affected the country's energy, metals and agriculture marketsNarinder Wadhwa
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