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Wednesday, 16 July 2014

Report - -INDIA - Poor monsoon in 2014 takes a toll on food crops, farmers planting alternative crops.

Poor monsoon rain is beginning to take a heavy toll as planting of food crops so far is worse than the drought year of 2009, and authorities in some regions have diverted water from fields to drinking water taps, compounding the misery of farmers.
Farmers in many regions are planting alternative crops, which are less remunerative but can endure water scarcity and mature quickly to make up for late sowing.
Water in 85 major reservoirs has fallen rapidly below the 10-year average at a time the tanks fill up to be able to irrigate fields after the monsoon and maintain hydropower generation.
Monsoon showers lashed parts of north India on Sunday, heralding the start of the Sawan month,usually a rainy phase in the traditional calendar, but the country needs sustained showers to make up for the 43 per cent rain deficit so far.
The weather office says monsoon will gather pace in the days ahead, which can still salvage agriculture. But the current situation raises the spectre of food inflation, which had rocketed to 20 per cent in 2009 and remained stubbornly high since then, impacting interest rates and growth.
Total crop planting in the Kharif season has halved from last year. The oilseeds crop is the worst-hit with planting completed in only 22 lakh hectares as on July 11,which is down more than 80 per cent from last year and significantly lower than 56 lakh hectares sown at the same time in 2009, when the country suffered the worst drought in nearly four decades.
Cotton planting is also lower than in 2009.Total area under rice, coarse cereals and pulses is 135 lakh hectares, lower than 153 lakh hectares sown by this time in 2009.Coarsegrainplanting is much lower while rice and pulses are slightly better than the drought year.
The situation is particularly severe in the stretch from Odisha to Maharashtra and Gujarat, which the weather office calls 'central India'. In this region, the area with rainfall closest to normal is Konkan and Goa with a monsoon deficit of 45 per cent since June 1. Rain deficit in Narendra Modi's native state of Gujarat ranges from 77 per cent in Saurashtra and Kutch to 92 per cent in the rest of the state.
"The agricultural situation in Gujarat, interior Karnataka and major parts of Maharashtra, west Madhya Pradesh and Rajasthan needs to be monitored continuously and preparation may be taken up for adoption of contingency plan and arrangements may be made for availability of sufficient seeds and other inputs for agricultural operations," the weather office said.
Acreage of India's largest vegetable export, guar, could also increase as companies have been distributing free seeds to farmers. The crop, which is largely sown in the dry areas of west Rajasthan, Haryana, Rajasthan and Madhya Pradesh, requires only two to three showers.
"Guar is a very sturdy crop and even if it rains by late July, farmers can sow the crop. However, our main focus will remain on cotton and groundnut, which account for 50 per cent of the total Kharif area in the state," said Raj Kumar, principal secretary in the Gujarat government. Farmers in the state could plant crops in only 14 lakh hectares, down from 50 lakh hectares last year. "There has been no rain and with reservoir position critical, water is only being released for drinking and not irrigation. If it rains as per the Met department forecast, then we can go for groundnut and cotton sowing till July 15," he added. Farmers in Gujarat, Maharashtra and parts of Madhya Pradesh and Karnataka are also planting alternative crops.
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Mr. Pankaj Katba 

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Friday, 11 July 2014

Indian Rainfall Reports: India to hold back export of grains due to poor monsoon

Indian Rainfall Reports: India to hold back export of grains due to poor monsoon 

Date : July 11, 2014

India, one of the world's top producers and consumers of rice, corn, cooking oil, sugar and cotton, relies heavily on the summer rains as nearly half its farmland lacks irrigation.

World's largest supplier of grains, India, has decided to hold on to the stockpiles for the fear of less rainfall. Fearing depression, the Indian government has decided to hold back grains for the domestic market, instead of boosting exports. This could push the global prices for wheat and rice.

India had lifted a ban on exports of wheat and rice on September 11. A senior food ministry was heard saying,"We don't want to end up importing grains. We have sufficient grain stockpiles, but naturally there will be an impact because of the weather situation." In fact, the government has decided to drop the auctioning of 5 million tonns of rice in an open market. Instead, they would be distributed to the poor through government welfare programs. 

The Central government has also decided to keep on hold a program under which wheat was being sold regularly through state-run trading companies to global bidders. The Indian government had approved exports of up to 2 million tons of wheat by June 30. However, it did not issue fresh order after state-run agencies sold 1.5 million tons to global bidders.

Weak rainfall in India since the start last month of the monsoon season, crucial to the country's agricultural earnings, has raised concerns of a first drought in five years, although weather experts are hopeful rains will revive in the next week.
A poor monsoon cuts exports, stokes food inflation and leads to lower demand for products ranging from cars to consumer goods, while a slow start could delay exports of some crops and increase the need for imports.
Rains last week spread to soybean areas in central parts of India and cane areas in the north, but overall rains stood at 43 percent below the seasonal average, a weather office update showed.
In 2009 the worst drought in nearly four decades forced India, the world's top sugar consumer, to buy large quantities of the sweetener from top producer Brazil, driving benchmark New York futures to a 30-year high.
The farm sector accounts for around 14 percent of India's nearly $2 trillion economy, and two-thirds of its 1.2 billion population live in rural areas.
"The monsoon appears to be more unpredictable," Finance Minster Arun Jaitley said, presenting his maiden budget on Thursday.
India, one of the world's top producers and consumers of rice, corn, cooking oil, sugar and cotton, relies heavily on the summer rains as nearly half its farmland lacks irrigation.
The lacklustre monsoon could push up edible oil imports by the world's top palm oil buyer. That in turn could underpin benchmark Malaysian prices of the tropical oil that have plunged more than a tenth this year.
The monsoon this year arrived five days late on the southern Kerala coast, and then covered half ofIndia four days later than the usual date of June 15. Usually, the monsoon covers the entire country around mid-July.
"The water-stressed western region is expected to receive good rainfall next week as conditions have become favourable for a revival," said M. Rajeevan, a senior meteorological scientist with the ministry of earth sciences.
Delayed progress of monsoon rains towards the grain belt of northwest India and oilseed-growing regions of central and western India has prompted concerns about a shortfall in grains output, causing prices of some food items to rise.
Jaitley said last week there was no cause to panic about the possibility of higher inflation, after a private forecasting agency said there was a 60 percent chance India would face a drought this year.
"Even if due to inadequate rainfall there is a marginal decline in agricultural production, stocks in the central pool are adequate to meet any exigency (emergency)," Jaitley said..
India's government under new Prime Minister Narendra Modi has moved to ease market concerns over supply shortages and price speculation with a number of steps, including raids against hoarders.
Policy makers in New Delhi fear a failure of this year's monsoon could push up retail food inflation by at least one percentage point.
Soaring prices of basic goods such as milk and potatoes lifted retail food inflation in May to 9.4 percent and the poor monsoon has fanned fears of worse to come.

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Pankaj Katba
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(International Broker for Grains, Pulses, Rice, Oil seeds, Oils, Extractions / Feed Mill Ingredients,  Sugar, Cattle Feeds & Cotton)
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