Bloomberg News

Best Monsoon Rain in Two Years to Lift India Grain, Sugar Output

June 14, 2013

India’s monsoon, which accounts for more than 70 percent of the annual rainfall, may be the highest in two years, potentially boosting harvests of everything from rice to corn, sugar cane and cotton.

Rainfall will be 98 percent of the 50-year average of 89 centimeters (35 inches) in the four months through September, the India Meteorological Department said in a statement on its website. That matched a forecast by the agency in April. It defines normal precipitation as 96 percent to 104 percent of the average received between 1951 and 2000. Showers in July, the wettest month of the season, will be 101 percent of the average and more than the 87 percent last year, it said.

A normal monsoon is critical to Asia’s third-biggest economy to ease a water shortage, control food prices and spur growth after the weakest rainfall in the three years in 2012 cut production of wheat, cotton, and sugar. Agriculture accounts for about a fifth of the economy, while 55 percent of the farm land does not have access to irrigation. Increased farm output may boost rural incomes, lifting sales of everything from gold to tractors and mobile phones.

“The rainfall distribution has been good so far this year,” P.K. Joshi, director for the South Asia region at the Washington-based International Food Policy Research Institute, said before the release of the forecast. “The country will have a bumper food grain output.”

Slowing Growth

Consumer prices advanced 9.31 percent in May from a year earlier, while wholesale price-based inflation slowed to a 43-month low last month, according to official data. India’s economic growth was 5 percent in the fiscal year ended March 2013, the slowest pace since 2003, partly because of a decline in farm output and a moderation in investment, the statistics agency estimates.

More than 235 million farmers in India, the world’s second-largest producer of cotton, rice and sugar cane, depend on rain for irrigating crops. The monsoon usually makes landfall in the south in June and covers all of India by July 15. Rainfall has been 28 percent more than normal since June 1, the weather office said yesterday.

“As of now the situation looks rosy,” said Faiyaz Hudani, an associate vice president at Mumbai-based Kotak Commodity Services Ltd. “July rainfall is very crucial and sowing of crops will begin aggressively in two weeks.”

Planting Progress

Rice has been planted in 794,000 hectares (1.96 million acres) as of today while oilseeds have been sown in 157,000 hectares, the farm ministry said in an e-mailed statement. Sugar cane was planted in 4.21 million hectares and cotton in 1.58 million hectares, it said.

Rainfall in August will be 96 percent of the average, compared with 101 percent last year, the bureau said. Northwest India, the main wheat, rice and sugar cane region may get 94 percent of average rainfall this year, while the central region, the biggest soybean grower, may see precipitation of as much as 98 percent of the average, the bureau said.

Showers in northeast India, the main tea and rice producer, may total 98 percent of the average, while they may be 103 percent in southern regions, the top coffee and rubber growing areas, the bureau said.

To contact the reporter 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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