Monsoon — which accounts for more than 70 per cent of the country’s annual rain — covered most of the country on Monday, improving prospects for planting of cotton, soybean and rice after a two-week delay, the Met department said.
The weather system covered all of Gujarat, the top cotton and peanut grower, Madhya Pradesh, the largest soybean producer, and Punjab and Haryana, the main wheat- and rice-growing states. Rain deficit narrowed to 14 per cent for the season started June 1, from 16 per cent last month, the weather office said.
Adequate rain may help PM Manmohan Singh lift farm output after a drought last year drove food costs to near an 11-year high in January.
The Reserve Bank of India signaled it was set to raise interest rates again to rein in inflation after an unscheduled increase last week.
“Sowing has picked up everywhere and revival in rain is good news for agriculture,” Alimuhammad Lakdawala, an analyst at AnandRathi Commodities Limited said.
Planting of monsoon-sown crops may be the highest in two years, possibly leading to “a problem of storage” when crops are harvested starting October, Agriculture Minister Sharad Pawar told reporters on Monday.
The advance of the rain-carrying winds to Uttar Pradesh, the top sugar cane and rice-growing state, will be “feeble,” the weather office said earlier on Monday.
The area planted to rice was up 2.4 per cent to 4.65 million hectares (11.5 million acres) as on July 2, cotton acreage has risen 50 per cent to 4.37 million hectares and oilseeds have been planted to 2.89 million hectares, more than twice last year’s level, the agriculture ministry said last week.
Prices decline
Soybean on the National Commodity & Derivatives Exchange Limited in Mumbai declined for a sixth consecutive day, losing as much as 0.9 per cent to Rs 1,886 a quintal. Sugar dropped one per cent to Rs 2,700 a quintal on July 2.
Prices of staples may not decline further as transporters pass on higher fuel costs to consumers, said Lakdawala. Singh’s government last month freed gasoline prices, allowing the cost to rise by Rs 3.5 a litre. Diesel is costlier by Rs two in a country where 65 per cent of the goods are transported by road.
“Fuel prices have been let loose,” Lakdawala said.
Sugar output will be 24 million to 25 million tonnes in the year starting October 1, more than the 23 million forecast by the government, because of an increase in the crop area, according to the National Federation of Cooperative Sugar Factories Limited.
The government may impose a tax on sugar imports in August or September, Pawar said. The duty will come into effect in the new crop season starting October. 1, he said.
Rainfall in the June-September season may be 102 per cent of the long-period average, helped by the La Nina weather condition, the forecaster said last month.
“The distribution in rainfall over the next few weeks will be critical in deciding how various crops turn out,” Lakdawala said. “There are no worries at the moment.”
