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India's monsoon falls short but no drought yet

Source : REUTERS
Last Updated: Fri, Jul 20, 2012 18:13 hrs

* Rains to return below average in week to July 18

* Weather office to forecast Aug-Sept rainfall by July end

* Plantings in rice, lentils, oilseeds lag behind

By Ratnajyoti Dutta

NEW DELHI, July 18 (Reuters) - Halfway through the crucial planting month of July, India's monsoon rains continue to cause concern, with sowing of pulses and rice behind schedule and rainfall still 22 percent below average for the time of year.

If there is no pick-up by the end of July, when India's meteorological department will update its official forecast, this year might qualify as a drought, with rainfall less than 90 percent of average annual levels.

"We haven't yet arrived at any conclusion about a failure of this year's monsoon as there are signs that rains will improve over the central region this weekend," D.S. Pai, the head of the Indian weather office's long-range forecasting, told Reuters.

The next weekly update is due on Thursday and for the week to July 18 the rains could retreat to below average levels, weather office sources said, after scraping above average the previous week for the first time in this rainy season.

Even the normally sanguine farm minister, Sharad Pawar, has started talking about a possible shortfall in grains output, particularly rice, as he described the monsoon as "playing hide-and-seek".

Food Minister K.V. Thomas said output of pulses (lentils) could fall, pushing up prices of the cheap source of protein for many of India's poor and fuelling further food inflation, which hit 10.81 percent in June.

Pawar, however, stressed there was no need for alarm over domestic supplies as India, one of the world's leading producers and consumers of farm commodities, is sitting on massive stockpiles of rice and wheat after bumper harvests.

But a drought - officially recognised if monsoon rainfall is less than 90 percent of a 50-year average of 89 centimetres - could mean India curbs exports of rice and sugar at a time when a severe water shortage in the United States is pushing key global grain prices higher.

Thomas and Pawar have both said mid-August will be the time to decide on exports, when the strength of the monsoon will be clear. India currently allows unrestricted exports of rice, wheat and sugar.

RAIN DISTRIBUTION HOLDS THE KEY

More than half of India's arable land is rain-fed, and the farm sector accounts for around 15 percent of India's economy, Asia's third-largest, but where it falls is the key and the rains have been very patchy this season.

Poor rains have slowed the speed of planting crops such as rice, cereals, pulses and oilseeds including soybean, but areas under sugar cane and cotton, primarily grown in irrigated regions, have been higher than the previous year.

And even in 2009, when monsoon rainfall was 22 percent below average and India had to import sugar, the country's food grains production fell only 7 percent from the previous year.

Pai said the rains have picked up in the last couple of days in parts of western Maharashtra, which grows sugar cane, oilseeds and cotton, and in southern Karnataka state, which grows primarily sugar cane and pulses, and where they had been weak since the start of the season.

"Dryness is likely to affect cane yields. There will be a drop in sugar production," said Ashok Jain, president of the Bombay Sugar Merchants Association.

Sugar futures have risen to their highest level in over 18 months on poor rains in all top three sugar-producing states - Maharashtra, Karnataka and northern Uttar Pradesh.

India is also vulnerable in pulses and oilseeds as it is a net importer of edible oils and pulses and they can stoke food inflation, which rose again in June to 10.81 percent - largely on the back of shortages due to lack of rain.




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