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Drought seen lowering India's rice output

Drought, which has affected large parts of India, is likely to lower the output of the winter rice crop but it was too early to judge the extent of damage, farm experts and traders said on Friday.

They said the yields could drop drastically in key growing states of Uttar Pradesh and Chhattisgarh, which were largely dependent on monsoon rains. But the damage might not be huge in Punjab and Haryana where farmers use canal and tubewell water for irrigation.

"Half of the monsoon season is over and there have hardly been any rains in the northwestern rice growing areas. The situation is bad," a farm expert at the Indian Council of Agriculture Research told Reuters.

He said rice, unlike wheat, was a highly water intensive crop and lack of rains would hit productivity.

The June-September southwest monsoon rains arrived over Kerala in early June and moved to western parts of the country, but its progress in northwestern India where oilseeds and rice are grown has been erratic.

The monsoon is vital to India's economic health as agriculture accounts for 25 per cent of the country's gross domestic product and employs some 70 per cent of its more than one billion population.

Agriculture Minister Ajit Singh has said the drought was the worst in more than a decade. But he said there would be no grain shortages because the country had sufficient stocks.

The country's grain stocks reached 65 million tonnes on May 31, much higher than the required buffer stock levels.

Farm ministry officials said the extent of damage would be known after mid-August and crucial rains in the next five to 10 days could improve the crop situation in some areas.

"But a realistic assessment will be available only towards August 15. Then only we can ascertain the kind of money and specific relief required," one official said.

One trader said the rice output could drop by three million tonnes or even more. "The indication is 20 to 40 per cent loss in crop area in the northern states. But still the picture is hazy," said Vinod Kapoor, a leading grains trader.

The US Agriculture Department's attache in New Delhi has lowered India's rice crop estimates to around 86 million tonnes against the earlier forecast 89 million tonnes.

Analysts said if it did not rain during the entire monsoon season that ends in September the output of the summer wheat crop would also be affected.

"If the rains do not come then the summer wheat crop will also will be badly hit because there will be lack of soil moisture," Mumbai-based commodity analyst G Chandrasekhar said.

Sowing of summer wheat begins in mid-October and is harvested in early April.

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