Although the monsoon rains have still trailed the long-period average by 18% so far, at 93.5 million hectares, the gap between the area under various crops this year and last has narrowed to 4.8% until Friday, compared with a 7% drop until last week. While paddy and cotton sowing has marginally increased from last years level, floods and dry weather in some parts of eastern and western India could adversely affect their production. The coverage of pulses and oil seeds has anyway dipped. Only an exceptional rabi harvest can salvage the situation.
Dry spells over various parts of cotton-growing states of Gujarat and Maharashtra, oilseed-producing Madhya Pradesh and floods in cane-growing Uttar Pradesh and paddy-dominant regions of Odisha can potentially affect production.
Last year, India reaped a record harvest of 264.77 million tonnes of grains.
Decline in sowing areas under oilseeds and pulses will likely result in an increase in imports of these commodities while the country is likely to export more cotton due to an expected good output, Ashok Gulati, chair professor agriculture, Indian Council for Research on International Economic Relations and former chairman of the Commission for Agricultural Costs and Prices told FE.
Wholesale price inflation dropped to a five-month low of 5.19% in July but a pick-up in retail inflation last month to 7.96% after hitting a 29-month low in the previous month suggests underlying inflationary pressure persists. In 2009, which witnessed the worst drought in 37 years, grain output shrank 6% and food inflation hit as high as 15.27%.
As heavy rains drenched many parts of eastern India, paddy planting got a boost, but floods in some parts of Odisha in recent weeks has slowed sowing marginally. An agriculture ministry official said kharif rice, which constitute about 80% of the total annual output, is likely to match the 91.6 million tonnes (mt) achieved last year. The total rice production during 2013-14 was more than 106 mt.
Pulses sowing has declined to 9.2 million hectares until Friday, down 6.7% from a year before. The ministry official said while the country produced a record 19.27 mt of pulses in 2013-14, the output could decline by around 5% in 2014-15, which may force the government to import around 1 mt of pulses.
Oilseed sowing has fallen by 15% to 18.3 million hectare so far, with soyabean acreage witnessing the maximum decline of 12%. However, Indore-based trade body Soybean Processor Association of India (SOPA) said area under soyabean would drop 9% from the last year level. Soyabean-growing western Madhya Pradesh and parts of Maharashtra need rains now as the crop has reached the flowering stage and excess rains were limited to certain other parts of the state, SOPA coordinator Rajesh Agrawal said. The geographical spread as well as the quantum of rains over the next two months will be crucial, he added.
Groundnut cultivation has dipped by over 5% so far to 3.5 million hectares. Interestingly, the government aims to beat last year's oilseeds output of 32.87 mt. The country imports at least half of the annual edible oil requirement.
Despite record planting of cotton, dry spells across growing belts of Marathwada, Vidarbha, Saurashtra and other regions could drag down the country's production to 39.62 million bales in 2014-15, compared with a record 40.05 million bales a year earlier, according to the Cotton Association of India (CAI). However, India could still replace China as the world's largest cotton grower in 2014-15 as Chinese production is set to decline, too, CAI said.
Similarly, around 6 lakh hectares of farm land including areas under cane has been inundated across 1,500 villages in UP. Last month, the Indian Sugar Mills Association forecast sugar output in the second-largest producer, UP, to drop in the 2014-15 marketing year starting October due to a 9% decline in cane areas. The floods in cane areas, including Balrampur, would further pressure sugar production.