Mumbai/New Delhi: Monsoon-sown grain production in India may climb to a record this year as the best start to the rainy season since 1994 spurs rice and corn planting, potentially easing inflation in Asia’s third-largest economy.
The production of crops from corn to rice and barley may exceed the all-time high of 131.3 million metric tonnes in the 2011-2012 season and last year’s 128.2 million tonnes, Tariq Anwar, minister of state for agriculture, told reporters in New Delhi on Tuesday. Farmers planted rice, oilseeds, cotton and sugar cane in 74.8 million hectares (184.8 million acres) as of 26 July, about 18% more than the same period a year earlier, according to data from the agriculture ministry.
A bigger harvest may help tame inflation and revive the country’s economic growth from a decade low, while adding to a global grain glut that’s pushed the Standard & Poor’s GSCI Index of eight agricultural commodities down 18% this year. The stronger than expected monsoon has not yet softened food inflation as much as it should have, the Reserve Bank of India (RBI) said in a statement on Tuesday. The consumer inflation quickened to 9.87% in June, according to official data.
“We can expect there to be a moderation in food inflation on account of a good monsoon," said Madan Sabnavis, chief economist at Credit Analysis & Research Ltd. “While overall agricultural growth may exceed last year’s levels on account of good rains, there could be specific pressure on lentils and oilseeds as excess rains may damage the crops."
Rains were 17% more than a 50-year average at 506.7 millimeters (19.95 inches) between 1 June and 29 July, according to the India Meteorological Department. That’s the most since at least 1994, according to data from the bureau. The country received 32% more rains than the average in June.
Agriculture accounts for about a fifth of India’s economy, while 55% of the farm land does not have access to irrigation and more than 235 million farmers depend on rain for growing crops.
Soybean output may climb from all-time high of 14.7 million tonnes in 2012-2013, while corn harvest may increase from 22.2 million tonnes, said J.S. Sandhu, the country’s agriculture commissioner. There are no reports of adverse impact on crops because of excess rains, Sandhu said.
“More than 95% of the crop has been planted already and the crop is shaping up well," said Rajesh Agrawal, a spokesman for the Soybean Processors Association of India. “The only worry is that it has been raining continuously in many areas and we are waiting now for some sunshine."
Soybeans were planted across 11.7 million hectares as of 26 July, up 16% from a year earlier, according to the agriculture ministry. Corn area increased 25% to 7.1 million hectares, while cotton planting rose 8% to 10.5 million hectares.
“There has been timely rain all over and cotton planting has been better than last year," said A. Ramani, secretary of the Indian Cotton Federation, which represents 350 spinners, ginners and traders. “This will ensure that the yield is higher and we could have a better crop this time." Bloomberg