Grain Out­put Test­ing Record with Stronger Mon­soon

The Economic Times - - Commodities Plus -

Pratik Par­ija

Fore­casts for the first above-av­er­age mon­soon in In­dia in three years is set to boost plant­ing of crops from rice to oilseeds, with record food grain out­put pos­si­ble af­ter two years of short­fall.

Rain­fall from June is seen at 106% of the 50-year av­er­age of 89 cm as the El Nino that of­ten trig­gers dry weather weak­ens, the In­dia Me­te­o­ro­log­i­cal De­part­ment said on Tues­day.

The forecast has a mar­gin of er­ror of 5%. Show­ers may be105% of the mean, Skymet Weather Ser­vices, said on Mon­day.

The pre­dic­tion for a stronger mon­soon af­ter the first back-to­back deficit in 30 years is seen bol­ster­ing Prime Min­is­ter Naren­dra Modi’s aim to dou­ble farmer in­come in five years and stem the slide in pop­u­lar­ity ahead of key state elec­tions next year. Out­put of crops in­clud­ing rice, sugar cane and oilseed all fell last sea­son in­creas­ing the cost of food in In­dia.

“Food grain pro­duc­tion may touch pre­vi­ous records or it may cross” above them, KK Singh, head of the agro me­te­o­ro­log­i­cal divi- sion of the state fore­caster, said by phone on Tues­day. The June-Septem­ber rains are cru­cial to keep food prices in check as the rain­fall in that pe­riod ac­counts for 80% of In­dia’s to­tal and wa­ters more than 50% of farm­land. The cen­tral bank cut its key in­ter­est rate for the first time in six months on April 5 with Gover­nor Raghu­ram Ra­jan say­ing he would watch its per­for­mance to look for more room to ease. “With a good mon­soon we will look at a larger pro­duc­tion while prices will cer­tainly re­duce,” Pravin Dongre, chair­man of the In­dia Pulses and Grains As­so­ci­a­tion, said on Tues­day. —Bloomberg


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