Failed monsoon leaves behind winter crop woes

Posted 10 3 2009 1:36AM

NEW DELHI (Reuters) – India's monsoon season, the worst since 1972, wound up 23 percent below average in 2009, leaving behind ravaged rice and sugarcane fields, depleted reservoirs and dry soil that threatens winter crops.

Rainfall in the past week was 39 percent short of normal, bringing an end to a season that began with the driest June in 83 years, data from the India Meteorological Department showed.

The failed monsoon has raised prospects of higher sugar imports by the world's top consumer, driven up food prices 16.3 percent in the year to mid-September and raised concerns of slower economic growth as nearly two-thirds of India's 1.1 billion people live in villages.

Record harvests in the past two years and severe curbs on farm exports have helped India accumulate surplus grain stocks, ruling out food shortages.

But the country faces a sugar shortage as the crop has contracted for the second consecutive year, helping New York raw sugar futures rise to a 28-1/2-year high.

The government, which regulates sugar supplies released 2.09 million tonnes in the market to meet October demand.

WINTER CROPS

The monsoon deficit is also likely to hit winter-sown wheat and rapeseed as it has depleted key water reservoirs that irrigate crops after the rainy season, and cut soil moisture.

The water level in India's 81 main reservoirs was at 60 percent of capacity on Thursday, down from 75 percent a year ago, and lower than the 10-year average of 67 percent, government data showed.

Low rainfall in September and abnormally high temperature in the northwestern state of Rajasthan will reduce the planting of rapeseed, officials said.

The crop is expected to be sown in 2.1 million hectares this year, down 22 percent from 2.7 million hectares last year, deputy director at the state's farm department, D.S. Yadav, told Reuters on Thursday.

India's summer-sown soybean crop is expected to fall 10 percent from last year, a trade body said.

A fall in oilseed output would boost edible oils imports, which are set to touch a record 8.5 million tonnes in the year to October.

India imports almost half of its annual domestic consumption of edible oils, purchasing palm oil from Malaysia and Indonesia and soyoil from Brazil and Argentina.

Rapeseed is normally sown from the middle of September and planting continues for a month, but this year sowing had begun in only one of Rajasthan's 33 districts and planting was likely to run until late October, Yadav said.

(Additional reporting by Arvind Sharma in Jaipur; Sourav Mishra and Rajendra Jadhav in Mumbai; Editing by Keiron Henderson)