RPT-UPDATE 1-Monsoon rains lash India, cover most of country

(Repeats story issued late Monday)

By Mayank Bhardwaj

NEW DELHI, June 16 (Reuters) - India's monsoon rains in the first half of June were more than 40 percent above the long-term average, raising hopes of strong crop output at a time when rising food prices have helped push inflation to 7-year highs.

A senior official at the India Meteorological Department (IMD) told Reuters on Monday that rainfall in the June 1-15 period was 44 percent above normal, adding the rains had now spread across most of the country.

The monsoon arrived in New Delhi at the weekend, two weeks ahead of usual. The four-month rainy season normally kicks off around June 1 in the southwestern state of Kerala and covers the entire country by mid-July.

"Rainfall for June 1-15 has been very good, and the monsoon has covered almost the entire country except some parts of Rajasthan," an IMD director, B.P. Yadav, said.

With only 40 percent of farmland irrigated, most of India's small farmers rely on the monsoon to water their crops. A good season of rains also boosts rural demand for a range of products and is a key factor in determining expansion in the larger economy.

Analysts say above average rainfall will help farmers growing oilseeds like soybean and groundnut, as well as rice and sugarcane, as it will raise soil moisture levels and cut irrigation costs.

Farming and related activities generate income for more than two-thirds of India's 1.1 billion people. Traders said it was too soon to declare the 2008 monsoon a good one.

"The progress of the monsoon has been good but we need to wait for a while to see the intensity of rains, especially in western and central parts where soybean and groundnuts are grown," said Govindbhai Patel, a leading oil trader from the western state of Gujarat.

Wholesale price inflation, India's most widely-watched measure, rose 8.75 percent in the 12 months to May 31, the highest in seven years.

With elections due early next year, the government has taken a series of steps, including export curbs and cuts in import duties on a number of food items, to boost domestic supplies.

The IMD has forecast the 2008 monsoon would be near-normal and 99 percent of the average between 1941 and 1990. (Editing by Mark Williams)