India’s cane region gets heavy rains too late

India’s cane region gets heavy rains too late

New Delhi: Drought-hit areas in India’s main cane-producing region received heavy rains for the first time in three weeks, but weather officials and the sugar industry were divided about the impact on the crop.

Monsoon rainfall has been 29% below average since the beginning of June, and the deficit has been bigger in Uttar Pradesh — which normally produces more than half of the country’s sugarcane.

In the last two to three days there have been heavy showers over cane- and soybean-growing belts, which, according to L.S. Rathore, head of Agromet Division of the India Meteorological Department, has “brightened crop prospects".

Trade officials, however, did not agree that heavy rains would help the cane crop.

“Rains have no special significance now. Rather heavy rains will harm the standing sugarcane crop," C.B. Patodia, chairman of the Uttar Pradesh Sugar Mills Association, said.

The weather office forecast “fairly widespread" rainfall over Uttar Pradesh, but Patodia said this may not be good news for the crop.

“For the sake of good cane harvest, especially its yield and recovery, rains should not continue now," he said.

In west Uttar Pradesh, where most sugar mills are located, monsoon rains have been 68% below normal, while in the eastern part of the state, the shortfall has been 53%.

The cane area in India, the world’s biggest sugar consumer, stagnated at 4.25 million hectares from mid-July, mainly due to lack of rains.

Cane area was initially expected to expand sharply from 4.38 million hectares last year, when low domestic output led to a fall in sugar production, making India a large importer.

India’s cane crop has contracted for a second successive year, raising prospects of large Indian imports and helping raw sugar futures surge to a 28-1/2-year high last week.

Traders and industry officials in Bangkok said Thailand, Asia’s top sugar exporter, had sold 13,900 tonnes of refined sugar to India for August shipment.

Agriculture minister Sharad Pawar said sugar industry officials had assured the government they would help Indian authorities ease the shortage of the sweetener.

Meanwhile, the soybean-growing central region of the country has also seen an increase in rainfall, and this is forecast to continue.

Madhya Pradesh received up to four times of normal rainfall in the middle of last week. Traders had feared productivity might drop up to 7% if rains were delayed further.

Soybean, the main summer-sown oilseed crop, had been deprived of rains for about three weeks from late July.

India’s economic growth could slow to around 5.5% in 2009-10 hurt by a poor monsoon, Nomura said in a research note, adding that the drought could push inflation to 6.5-7% by end-March 2010.