New Delhi: India will import food items such as edible oil and lentils to meet any shortage caused by the driest monsoon in seven years, finance minister Pranab Mukherjee said on Friday.
Meeting shortfall: Pranab Mukherjee says India will import edible oils and lentils as the gap between domestic supplies and demand widens. Harikrishna Katragadda / Mint
Monsoon deficiency is a serious concern and will disrupt farming, hydroelectric power generation and the recharging of reservoirs, he told a meeting of state food ministers in New Delhi. India has adequate stockpiles of wheat and rice from record government purchases from harvests last year, he said.
The monsoon season, which brings about three-quarters of the nation’s annual rainfall, may be the driest since 2002, with 246 of the 626 districts declaring drought, the weather bureau said last week. Inadequate rain may shave as much as 1 percentage point off the nation’s economic growth this year, Raghuram Rajan, an adviser to Prime Minister Manmohan Singh, said on 12 August.
The rainfall deficit in the season started 1 June narrowed to 26% from 29%, the weather office said on Thursday. The shortfall narrowed to 2% below average in the week ended 19 August, compared with 56% in the previous week.
India will import edible oils and lentils as the gap between domestic supplies and demand widens, Mukherjee said. The government will not publicly announce its import plans, he said.
The moment news spreads that India is going for heavy doses of imports, it automatically has the impact of market prices being jacked up, Mukherjee added.
India turned a net importer of sugar for the first time since 2006 after inadequate rain in July 2008 reduced cane yields, lowering output by half. The South Asian nation has contracted to import 4 million tonnes (mt) of raw sugar this year to meet a shortfall.
Vegetable oil imports, which meets almost half its demand through overseas purchases, may climb to a record in the year to November as dry weather hurts oilseed crops, a processors’ group said on 13 August. Purchases in the year ending 31 October may jump 27% to 8mt, the Solvent Extractors’ Association of India said.
The area under oilseeds including peanuts and soyabeans dropped to 15.25 million ha, as of 12 August, from 16.4 million ha a year ago, the farm ministry said. The government will extend the Rs15 a litre subsidy on imported edible oils to March 2010, farm minister Sharad Pawar had said on 19 August.
India needs a contingency plan to make use of late monsoon rain, Mukherjee said.
Pawar, who also addressed the meeting on Friday, said the government expects early sowing of winter-sown crops over a larger area this year to offset some of the crop loss, but the farm situation remains disturbing.
“The situation is grim, not just for crop sowing and crop health but also for sustaining animal health, providing drinking water, livelihood and food, particularly for the small and marginal farmers and landless labourers,” he said.
Food prices have risen over 10% annually, although overall wholesale price index has seen a year-on-year decline for several weeks in a row.
“Effective enforcement actions and other steps would be taken to ensure that the prices of commodities do not rise abnormally,” Pawar said.
He said authorities need to help farmers plant alternative crops and provide food, fodder, drinking water and employment to people, particularly in the drought-hit districts.
“At this critical stage we need to assess the current situation correctly,” he said.
Pawar said efficient use of irrigation and judicious use of ground water and reservoirs was necessary.
Official data shows the country’s main reservoirs rose barely one percentage point last week and stood at 38% of the total capacity, down from 58% a year ago.
Reuters contributed to this story.