Bloomberg News

Monsoon Revival Brightens Prospects for India Rice, Cane

August 29, 2012

A revival in India’s monsoon is set to benefit rice, sugar cane and cotton crops, easing concerns that the weakest rainfall in three years will shrink farm output and stoke food prices in Asia’s third-largest economy.

Rainfall in September will be better than forecast this month, helping growth of already-planted crops, said L.S. Rathore, director general of India Meteorological Department. The revival in the monsoon this month will help oilseeds and increase planting of coarse cereals and lentils, Agriculture Secretary Ashish Bahuguna told reporters in New Delhi today.

A rebound in rains in the past two weeks has eased the drought situation in more than 50 percent of India, improving prospects for crops from rice to corn and soybeans, and easing pressure on government to curb exports to cool domestic prices. The monsoon rainfall deficit has narrowed to 12 percent from 29 percent at the end of June with 70 of the country recording normal rainfall, according to the weather bureau.

“Almost all the crops are benefiting because of the improvement in rainfall recently,” Rathore said in a phone interview yesterday. “The recent spell of rain has reduced the load of irrigation, otherwise the cost of cultivation would have increased for some crops.”

The area under rice totaled 32.9 million hectares (81.3 million acres), compared with 30.8 million hectares a week earlier, the farm ministry said Aug. 24. The monsoon-sown rice harvest was a record 91.5 million tons last year.

‘Ample Rice’

“If this weather continues until the flowering stage in the next two months, we will have a good crop,” said Trilochan Mohapatra, director of state-run Central Rice Research Institute. “We should continue exports of rice to ensure a better price for the farmers as there will be ample rice in the country. The situation was bleak until last month.”

India extended a ban on exports of sugar, rice and wheat in 2009 after the weakest monsoon in almost four decades. Non- basmati rice shipments totaled about 5.7 million metric tons as of July 20 after the ban on exports was lifted in September, according to the food ministry.

Sugar cane yields in India, the world’s second-biggest producer, will increase with the latest rains, said Vinay Kumar, managing director of National Federation of Cooperative Sugar Factories Ltd. Farmers have planted sugar cane to 5.29 million hectares as of Aug. 24, compared with 5.06 million hectares a year earlier, according to the farm ministry.

Cane Yields

“These rains will increase cane yields across the country,” Kumar said in a phone interview yesterday. “The crop situation is much better compared with a month earlier.”

Still, output may drop to 25 million tons in the year beginning Oct. 1, from 26 million tons this season as dry weather in Maharashtra and Karnataka cuts yields, the Indian Sugar Mills Association said July 2.

Cotton will benefit as increased rainfall boosts soil moisture in the driest of areas such as Gujarat and Maharashtra states, the biggest producers, said Nayan Mirani, vice president of the Cotton Association of India.

“The plants which were water-stressed will get some relief due to the revival of the monsoon,” Mirani said. “Output will not be much lower.”

India, the world’s second-biggest cotton grower, harvested a record 35.3 million bales of 170 kilograms each in the year ending September, according to the Cotton Advisory Board.

The withdrawal of the monsoon from northwest India may be delayed this year as El Nino weather conditions may not impact rains in September, Bahuguna said. Rainfall may be 91 percent of a 50-year average in August to September, the weather bureau said Aug. 2. The monsoon typically begins to withdraw from the first week of next month.

“The rains will also help winter-sown crops as it has helped in recharging the ground water and also increased water level in reservoirs,” weather bureau’s Rathore said.

The nation grows crops such as wheat and mustard during winter season. India is the world’s second-biggest producer and user of wheat.

To contact the reporters on this story: Pratik Parija in New Delhi at pparija@bloomberg.net; Prabhudatta Mishra in New Delhi at pmishra8@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


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