India to see a Bumper Harvest Better than last year

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NEW DELHI: The monsoon has started withdrawing after delivering near-normal rainfall across the country, setting the stage for a bumper harvest after two years of scanty rain that hit farm output and distressed villagers.

The government is optimistic of another bumper harvest with output to be similar to last year’s or better, as crop planting and the monsoon season are at the tail end. It also doesn’t expect floods to have any major impact on production.

“This year the southwest monsoon has overall been good, with most states getting excess to normal rainfall and only few having deficit rains. It is good news for farmers. I am sure we will have record production this year,” agriculture minister.

The season’s total rainfall so far is 5 per cent below average, which is close to the normal range. The government has set a target of record grains production of 270.10 million tonnes in 2016-17 crop year to July.

In Maharashtra, rainfall was more than three times the normal level, the weather office said. It said southern India and Maharashtra will get good rainfall next week after which rain can intensify in the peninsular region, while northern India will be relatively dry. The withdrawal of the monsoon from the east and northeast is expected to take time.

However, some analysts raised concerns over the distribution of rains that they said were erratic, and in deficit in several states. But trade doesn’t expect any impact on food prices as they claimed there would be ample supplies to meet domestic needs.

Major crops have been planted on 104.16 million hectares so far this kharif season against an estimated 103.95 million hectares last year. The area under coarse cereal, cotton and pulses has fallen, while acreage of oilseeds, rice and sugarcane increased, according to agriculture ministry data.

Indian Council of Agriculture Research director-general Trilochan Mohapatra said kharif production would at least be similar to last year’s levels. “It can even be better as current weather conditions and planting data are favourable. Planting continues across north-eastern states, largely of rice,” he said.

Production of rice is expected to fall marginally by 1.74 per cent to 95.8 million tonnes and that of coarse cereal by 4.1 per cent to 32.5 million tonnes. It predicts pulses production to be 9.5 per cent less from last year at 8.45 million tonnes and oilseed by 2 per cent at 20.55 million tonnes. Poor returns have led farmers to reduce pulses acreage, which according to ministry data fell 2.21 per cent to 13.44 million hectares. “Looking at the current situation, urad output will see a 5 per cent to 8 per cent loss. In tur and moong production, we don’t expect any fall. This will not affect prices or availability as the government is holding over 5 million tonnes of pulses from 2016 and 2017 crop year,” said Bimal Kothari, vice chairman of the India Pulses & Grains Association. Cotton, which saw a 2.39 per cent fall in acreage at 11.8 million hectares, will see a drop in output, said traders. “We expect cotton production to drop by 5 per cent to 350 lakh bales (170 kg each).

India’s edible oil imports are likely to rise 7.3 per cent in 2019-20 to a record high as weak monsoon rains curtail yields of summer-sown oilseeds such as soyabeans and groundnut, a senior industry official has said.

Higher purchases by the world’s biggest edible oil importer could support palm oil prices that are under pressure due to sluggish demand amid an expected rise in production.

“Rainfall was scanty over oilseed-growing areas. It will reduce yields of groundnut, soybeans and cotton,” said Govindbhai Patel, managing director of trading firm GG Patel & Nikhil Research Company.

The shortfall in oilseed production will force India to import as much as 16.1 million tonnes of edible oils in the new marketing year starting November 1, up from this year’s estimated 15 mt , said Patel, who has been trading edible oil for over four decades.

India imports more than two-thirds of its edible oil needs, up from a third two decades ago, as local output has failed to match growing demand in Asia’s third biggest economy. Palm oil accounts for around two-thirds of total imports.

India’s monsoon rains to date have been 18 per cent below average since the season began on June 1, although rains in some oilseed-growing regions such as Vidarbha in Maharashtra have been 37 per cent below average, according to data compiled by the India Meteorological Department (IMD).

Rains in Gujarat, the biggest producer of groundnut and cotton, have been down 46 per cent so far in the current monsoon season, hurting crop growth, Patel said.

“The damage could be restricted if there is rainfall in the next few days,” he said, adding that soyabean yields could fall by 20 per cent and groundnut yields by 30 per cent due to the dry spell in the past few weeks.

As the drop in summer oilseeds output becomes more certain, Indian refiners will start raising edible oil imports in the coming months, especially for festivals, Patel said.

Monthly edible oil imports could rise to 1.3 mtin the coming months, up from the June quarter average of 1.15 mt , he said.

India primarily imports palm oil from Indonesia and Malaysia and soyaoil from Argentina and Brazil. It also buys sunflower oil from Ukraine and canola oil from Canada.

In the current marketing year ending on October 31, India’s palm oil imports could jump 10.3 per cent from the previous year to 9.6 million tonnes, Patel said.

The country could import 2.4 mt of sunflower oil and 3 mt of soyaoil in the current marketing year, he added.

Plentiful rain last month during India’s critical monsoon season has helped save the country’s soybean and peanut crops from disaster.

The oilseeds, sown during the rainy season that runs from June to September, were at risk of lower yields due to a drought a month ago that wreaked havoc with India’s water supply. But much-needed showers came in July, raising expectations that output can return to normal levels.

“The fear which we had a month ago that the crop is going to be much lower than last year seems to have evaporated now,” Atul Chaturvedi, president of Solvent Extractors’ Association of India, said in a phone interview.