Rice stocks depleting over high PDS offtake

Despite the record rice procurement of 24.2 million tonne by the government in 2004-05 season, a significant offtake for the public distribution system (PDS) and a better export scenario have led the stocks of the commodity to plummet to 7.8 million tonne as on August 1.

According to the Foreign Agricultural Service of the US department of agriculture, the stocks are expected to decline further by 4 million tonne by October 1 making it the lowest level since 1990. It is 2.1 million tonne below the October 1, 2004, stocks level and 1.2 million tonne below the government's desired minimum buffer stock level.

In 2005, up to August, the rice exports were above 4.5 million tonne. According to official statistics, the exports for the period of January through May touched 2.5 million tonne. Shipments indicate large exports in June and July, mostly to African countries and Saudi Arabia.

Although the exports to Bangladesh have declined sharply since May, a resumption in the exports to that country over the coming months is expected, says the report. This follows the Bangladeshi government's plan to import rice to meet a likely domestic shortage.

The production is also forecast to decline to 86 million tonne despite a reasonable monsoon and consequently better crop situation, assuming a national average yield of 2 tonne per hectare.

Despite a late start and slow initial progress, the monsoon advanced swiftly during the last week of June to cover the entire country by June 30, two weeks ahead of the normal date.

After two to three weeks of heavy rains in July in many parts, which resulted in severe floods Gujarat, Maharashtra and Karnataka, there has been a break in the rainfall since the beginning of August. However, some of the earlier rain deficient rice growing regions in east India received good rains during this period.

The progressive planting report shows that the planting through August has marginally exceeded last year's level. Total area under rice in 2005-06 is around 43 million hectare, below the February forecast of 44.5 million hectare.

Crop conditions in the surplus rice growing states of Punjab and Haryana are reported to be good despite poor rains, as the crop there is mostly irrigated.

An early withdrawal of the monsoon from the eastern and central states where the crop takes longer to mature and is mostly non-irrigated, would further lower production.