July 10, 2012

 

India's grain bowl marks progress as monsoon advances

 

 

Weather officials said on Monday (July 9) that India's monsoon has progressed into the main grain producing states of Punjab and Haryana and rains have picked up in soy areas of central India, marking some progress after last week's halt.

 

But the recovery has to continue to allay fears of poor rains affecting the planting of summer crops such as rice, cane, corn, cotton, and soy in one of the world's leading producers and consumers of an array of farm produce.

 

A shortfall in monsoon rains widened to nearly 50% of average in the past week, making a revival this week crucial for farmers.

 

"Punjab and Haryana have received monsoon rains while there has been a good spell over Madhya Pradesh in the last two days. Overall, we expect good rains in central India and northern states in the next two days," D. P. Dubey, a director at the India Meteorological Department, told Reuters.

 

As the June-September showers picked up in the past couple of days, the shortfall has narrowed. Rains between June 1 and July 8 were 25% below normal against a 30-% deficiency until July 4, weather officials said.

 

Now, rains were likely to cover almost the entire country by mid-July, they said.

 

"We have reports of plenty of rains over soy areas of Madhya Pradesh and Maharasthra. More than half of the soy sowing is over by now and the rest will be over by late next week," said Rajesh Agrawal, coordinator at the Soy Processors' Association of India, an industry body.

 

Madhya Pradesh and Maharashtra are the top two soy producing states, accounting for more than 85% of total Indian output. Both states received sharply lower rains in June, delaying sowing. In the past few days they have received good rains, helping planting to gather momentum.

 

"In Madhya Pradesh and Maharashtra, sowing has been picking up after the initial delay," said Chowda Reddy, senior analyst at JRG Wealth Management.

 

"Despite the delay in sowing, we are expecting higher area under soy. Current soy prices are very attractive for farmers," Reddy said.

 

The key August soy contract on India's National Commodity and Derivatives Exchange was up 3.29% at INR4,331.5 (US$77.52) per 100 kilogrammes by 1000 GMT. It hit a record high of INR4,345 (US$78) earlier in the day, in line with overseas markets.

 

Cane growing areas of Maharashtra, the top sugar producing state, have also received showers in the past few days, but industry officials say it needs more to overcome the dry weather conditions of the recent past.