August 6, 2012

 

India's drought causes animal feed shortage

 

 

Output of some coarse grains used for animal feed may be cut due to India's first drought in three years and trigger a shortage of fodder in a country where farmers make up roughly half the workforce.

 

India normally exports corn and meal to southeast Asia, but growing demand for poultry and dairy products is boosting domestic use.

 

"The crop outlook for coarse cereals is not good, which will reduce fodder supply," L.S. Rathore, director-general of the India Meteorological Department (IMD), told reporters.

 

The shortage will spell little respite from high global corn prices, which soared to a record this week on supply concerns fuelled by an even longer drought in the US.

 

After Prime Minister Manmohan Singh's office raised concerns about the availability of animal feed last month, Farm Minister Sharad Pawar this week said import duty on oil-cake would be waived to ease supplies both to the feed industry and producers of edible oils.

 

India, one of the world's top producers and consumers of a number of farm commodities, is suffering its first drought since 2009, when it was forced to import sugar, sending global prices higher.

 

In the western state of Maharashtra, the country's biggest sugar producer, the shortage of animal feed is so acute that farmers are being forced to sell cane to feed depots set up by the government.

 

This year lentils and coarse cereals such as millet are the most vulnerable, though soy, the main summer-sown oilseed, is expected to be largely unharmed after late rain showers in key growing regions.

 

Domestic prices of soymeal have more than doubled in the last three months while corn has gained 25%. Trade and government officials do not see any shortage of staples, however. Grain bins are overflowing with rice and wheat and sugar output is set to exceed demand for a third straight year. But any drop in the overall oilseed crop or lentils will trigger an increase in imports.

 

Rathore said rains were likely to be 85% of the long-period average. The IMD on Thursday (Aug 2) confirmed the drought. The monsoon rains vital for the 55% of Indian farmland that does not have irrigation are considered deficient -- a drought in layman's terms -- if they fall below 90% of the 50-year average rainfall of 89 centimetres. But it would be too early to gauge the impact of drought on winter-sown crops, Rathore said.

 

Farmers sow summer crops in the rainy months of June and July, and take in harvests from October. Winter crops, the most important of which are wheat and rapeseed, are sown in October and September, and farmers begin harvesting them from March.

 

Rice makes up 70% of India's summer-sown crops, which in turn make up about half of India's total crop output.

 

The four-month season accounts for 75% of India's annual rainfall and half of that is usually delivered in June and July. Any major shortfall hits rural incomes and reduces demand for goods ranging from precious metals to consumer appliances.