June 6, 2008

 

India looks to sow bumper cash crops as prices soar

 

 

India is likely to harvest bumper cash crops this fall, according to food industry officials.

 

Sowing is getting underway, and farmers are planting more acres in response to high global and domestic prices.

 

While staples such as rice and wheat are the mainstay of Indian farming, millions of growers earn a substantial part of their incomes growing cash crops such as oilseeds, sugarcane, cotton and coffee. India is among the world's biggest importers of edible oils and a major exporter of coffee, soymeal, sugar and cotton.

 

Indian farmers are expected to increase acreage for soy, peanuts and cotton.

 

A glut of sugarcane in the world sugar market is likely to lead to farmers in the key growing region of Uttar Pradesh province to switch to other crops, said Mohan Gurnani, chairman of the Bombay Sugar Merchants Association.

 

The kings of India's cash crops are oilseeds. The federal government is anxious to raise production, as the country imports up to 5.5 million tonnes of edible oils annually, and the commodity contributes a lot to soaring food price inflation.

 

A corollary to high prices is that farmers make more money, which in turn encourages them to increase planting in the following year. So if the monsoon season brings adequate rains, bumper crops can be expected.

 

Rajesh Agrawala, president of the Soybean Processors Association of India, based in Indore - the hub of soy trading - said farmers got up to 70 percent more money for their soy crop in 2007 than they got the year before.

 

He expects soybean acreage to rise by up to 10 percent from last year's 8.7 million hectares, as farmers in the provinces of Maharashtra, Gujarat, Madhya Pradesh and some southern provinces switch from crops such as pulses to soy.

 

However, all the assumptions about higher acreage and output for cash crops hinge on evenly spread and adequate monsoon rains in the June-August period. As much as 60 percent of India's farmlands are rain-fed.

 

So far, the monsoon rains have been weak, with total rainfall in the first four official days of the season, June 1-4, 14 percent below the normal level. Monsoon rains also have not moved northward since June 2, and opinion is divided among government weather agencies about when the monsoon will resume its advance. A weak start to the monsoon season is not unusual though, as the rains will normally strengthen and weaken throughout the season.

 

Its also early days yet in the country's main crop season, as sowing will likely continue until the end of July.