UPDATE 2-Indian monsoon rains seen below average - minister

Source : REUTERS
Last Updated: Mon, Jun 09, 2014 13:50 hrs

(Adds detail, trade comment)

By Ratnajyoti Dutta

NEW DELHI, June 9 (Reuters) - India's monsoon is expected tobring below-average rainfall this year, Earth Sciences MinisterJitendra Singh said on Monday, potentially lowering grainyields, pushing up food prices and hurting the economy.

Singh expects precipitation between June and September to bebetween 90 and 96 percent of the long-term average.

India's farm sector accounts for 14 percent of India'snearly $2 trillion economy, with two-thirds of its 1.2 billionpopulation living in rural areas.

Rains are vital to rejuvenate an economy battling itslongest economic slowdown since the 1980s and to cool inflationrunning close to double digits. The new government on Mondaymade fighting food inflation its top priority.

"The southwest monsoon this year may be less than normal,"said Singh, adding that rainfall in July was seen at 93 percentof the long-term average, rising to 96 percent August.

The four-month-long monsoon season started on a weak note asthe annual rains arrived over India's southern coast about fivedays behind the average date of June 1.

India's rice and cotton growing areas are expected toreceive deficient monsoon rains, while its soybean growingcentral region should receive below-average rainfall.

The India Meteorology Department (IMD) defines average, ornormal, rainfall as between 96 percent and 104 percent of a50-year average of 89 cm for the entire season.

"Rainfalls in the first month of the season are expected tobe deficient as a result of the weak start of the season," IMDchief L.S. Rathore said, adding that monsoon rains had been 44percent below average so far.

Half of India's farmland still lacks access to irrigationmaking many farmers particularly dependent on monsoon rains. Thecountry plans to expand irrigation coverage by at least a tenthby 2017 to cut its dependence on the seasonal rains.

In April, before the start of the monsoon season, the IMDhad forecast below-average rainfall in 2014 due to an emergingEl Nino in which warm water rises to the surface of the PacificOcean.

However, the impact of the El Nino weather phenomenon -which can cause drought in South Asia - is likely to be weak inIndia, a weather office official said.

"No impact of El Nino is right now seen on the Indianmonsoon as it is still in a neutral condition," said D.S. Pai,lead forecaster at the IMD.

India will consider providing subsidised diesel, cheaperloans and extra seeds to farmers if rains are poor this year,Farm Minister Radha Mohan Singh said.

FOOD PRICE INFLATION

The weather office expects the monsoon to cover the wholecountry by mid-July despite its weak start.

"We have to still wait to see how the monsoon shapes up overthe main crop areas as a weak start doesn't necessarily mean apoor monsoon," said Sudhir Panwar, president of Kishan JagritiManch, a farmers' lobby group.

Poor rains this year could hit summer crops such as rice,soybean, corn and cotton, raising food prices and pressuringeconomic growth that has nearly halved to below 5 percent in thepast two years, traders said.

"Cotton, soybean and pulses could be hit due to lowerrainfall in central and western India," said Harish Galipelli,vice-president research at Inditrade Derivatives andCommodities.

"These crops are mainly grown on rainfed areas. Sofluctuation in rainfall can lower their yields. Edible oilimports could rise if soybean production goes down in MadhyaPradesh and Maharashtra."

Galipelli added that rice was not a concern because it isgrown across the country, and a drop in production in one statecould be compensated elsewhere. There were also enough stocksleft over from last year's harvest.

(Reporting by Ratnajyoti Dutta; Editing by Douglas Busvine,Erica Billingham and Susan Thomas)




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