Monsoon picks up but drought areas remain

NEW DELHI (Reuters) - Drought continues to hit western oilseeds and cotton growing areas but higher rainfall over rice-growing regions in the east and the central soybean belt meant overall rainfall was just 1 percent below average last week.

The monsoon, which brings some 75 percent of India's annual rainfall, is 17 percent short of normal so far and threatening cereal and pulses production. Other global grain giants the United States, Russia and Ukraine have also been hit by drought.

India, whose huge land mass contains nearly all climates and soil types, last faced widespread drought in 2009 when the June-to-September monsoon rains were 22 percent below average and it had to import sugar, pushing global prices to 30-year highs.

Rains in the week to August 8 have picked up from a shortfall of 4 percent the week earlier, the India Meteorological Department (IMD) said on its website. Rainfall had picked up in the key planting month of July to be 13 percent off normal compared with June, when the deficit was 29 percent.

"Rains are expected to be near normal in the next week with increased rainfall activities likely over the northwest region," said a senior official of the IMD who did not wish to be named.

"Planted soybean is in good condition as the crop received rains at regular intervals during last two weeks," said Rajesh Agrawal, an official at the Soybean Processors' Association of India, which is based in the central city of Indore.

The IMD revised its official forecast for the season last week to deficient rains -- a drought in layman's terms. The government has introduced contingency plans for worst-hit areas and drought experts meet under Agriculture Minister Sharad Pawar.

The government has taken steps to cut irrigation costs and increase fodder supplies for livestock farmers, but it has held off from imposing any curb on exports of agricultural products or a ban of futures trading in them.

Worst-hit states have been Punjab and Haryana in the north, Gujarat and Maharashtra in the west and Karnataka in the south.

"Rains at this juncture will help wipe out the drought-like conditions in Punjab and Haryana and help the planted rice crop, which is till now free from any major pest attacks," said Vijay Setia, former president of the All India Rice Exporters' Association.

But the monsoon rains continued to be poor in Gujarat, which grows cotton and oilseeds, in the past week.

The drought panel under Pawar was scheduled to review the monsoon status on Thursday. But the meeting was postponed as Pawar went to the grain bowl states of Punjab and Haryana to take stock of the situation on the ground.

Rains in these two states have been less than half of normal averages, though major crops such as rice and cotton were sown using irrigation.

Rains below 90 percent of long-term averages in the entire season are considered "deficient" by the IMD.

(Editing by Jo Winterbottom and Alison Birrane)