New Delhi: India’s monsoon rains were about 3% above normal in July, the highest for the month since 2005, making a repeat of last year’s crop failure and food-led inflation surge unlikely.
Heavy rain since the third week of July has brought readings above normal for the first time this monsoon season, according to weather office data, wiping out the seasonal shortfall in almost all major grain areas other than in the east and northeast.
A rebound in crop output from last year’s low would help ease prices of commodities such as soybeans, which surged to a six-month high on Friday, as local output in the world’s biggest buyer may increase, lowering dependence on imports. Similarly, the rains would help boost sugar output, easing overseas demand.
The Asian nation is already grappling with double-digit inflation due to rising fuel prices, and the government is facing growing criticism from Opposition political parties for failing to rein in prices.
Agriculture minister Sharad Pawar was upbeat on the latest data on monsoon. “I am always happy with more rains,” he told reporters.
“All soybean-growing areas have received good monsoon rains this season and the current crop condition is healthy,” said A S Chandel, a soybean expert, from Indore.
US soybean futures on the Chicago Board of Trade surged on Friday, while Malaysian crude palm oil jumped to a three-month high on Monday.
The October raw sugar rose 0.07 cents to finish at 19.57 cents per lb, the strongest close for the spot contract since mid-March.
In India, oilseeds have been planted on 14.2 million hectares by 29 July, up 10% from a week ago, while area under rice expanded by a quarter to 21.2 million hectares.
In the main rice- and cane-growing regions of the north and northwestern, total rains this season are 1 percent above normal, rising from a shortfall of 18% a month ago.
“Good monsoon will help the government to achieve its rice output target of 100 million tonnes,” said Rakesh Singh, a rice trader with Delhi-based trading firm Emmsons International Ltd.
Pawar said heavy rains would recharge water bodies, boost soil moisture, and make the soil more fertile.
He said lower rainfall in eastern and northeastern India would not hit the country’s farm output or yields.
India’s monsoon rains were 3% below normal between 1 June and 1 August, recovering from a 16% seasonal deficit in the middle of last month.
Pawar said all major summer sown crops like rice, oilseeds, cotton have higher areas this year until last week, but a clear picture on the level of planting would emerge by the end of this month.