Poor monsoon hits grains, spares sugar | business | Hindustan Times
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Poor monsoon hits grains, spares sugar

business Updated: Jul 12, 2012 02:05 IST
Zia Haq

India’s monsoon, vital for Asia’s third-largest economy, remains 23% deficient overall, fuelling concerns that the country may end up with a lower annual food output and higher prices.

The patchy rains have hit planting of key summer crops even as major food-bowl states are well into their peak sowing period, typically the first fortnight of July.

The rains are critical as two-thirds of India’s population depend on farm income and 60% of croplands do not have assured irrigation. The monsoon also replenishes 81 nationally monitored water reservoirs vital for drinking, power and irrigation.http://www.hindustantimes.com/Images/Popup/2012/7/12_07_12-metro1b.jpg

Official data showed that the sowing of rice — the main summer-grown cereal — is deficient by 26%, while planting of oilseeds has been 28% less than last year’s for this time of the year.

For coarse cereals such as maize, bajra (pearl millet) and jowar (sorghum), which traditionally form the food basket of the poor, the shortfall has been highest at minus 57%.

India’s headline inflation, already elevated at 7.55% in May, could climb higher if a weak monsoon were to crimp food output. According to a UN advisory, world food prices are expected to rebound in July after falling for three straight months. India relies on imports to meet domestic demand of pulses and edible oils, whose prices are likely to be hit.

Normal rains, which act as a strong check on inflation through good farm output, are critical if India is to recover from a sharp slowdown.

“A deficient monsoon would impact recovery to an extent, but (its effect on) prices are a real cause of concern although stocks are plentiful,” said NR Bhanumurthy, an economist at the state-run National Institute of Public Finance and Policy.

Planting of cash crops such as cotton and sugarcane, sturdy crops that are less water-intensive than rice, are progressing normally.