India set for bumper winter crops in wake of monsoon rains

NEW DELHI/MUMBAI Wed Oct 23, 2013 2:04pm IST

A combine harvester is used to harvest wheat in a field on the outskirts of Ahmedabad March 14, 2013. REUTERS/Amit Dave/Files

A combine harvester is used to harvest wheat in a field on the outskirts of Ahmedabad March 14, 2013.

Credit: Reuters/Amit Dave/Files

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NEW DELHI/MUMBAI (Reuters) - India looks set for bumper harvests of winter crops such as wheat, chickpeas and rapeseed in the wake of a strong monsoon that has left the soil moist and topped up reservoirs.

The crops will follow bountiful summer harvests of rice and soybeans due to the rains, with New Delhi looking to boost agricultural growth to cool double-digit food inflation and revive a slowing economy as manufacturing struggles.

With next year's wheat output seen matching 2013's strong 92.46 million tonnes, the government - already sitting on piles of rotting grain as its storage overflows - could allow more exports. Greater supply from the world's second-biggest producer of wheat would be a bearish factor for global prices which climbed to their highest since June this week.

A jump in production of chickpeas and rapeseed should cut expensive imports of pulses and vegetable oils as the government battles to narrow a gaping current account deficit.

"Winter crop prospects are definitely bright as a good monsoon and late, extended rains have left plenty of moisture in the soil, setting the stage for farmers to harvest bumper crops of wheat, pulses and oilseeds," said Devinder Sharma, an independent food and trade policy analyst.

Farmers in one of the world's leading producers and consumers of food sow winter crops from October, a month after the June-September monsoon rains ebb, with harvesting starting from March.

They principally plant rice, sugarcane, corn and cotton in the rainy months of June and July, while wheat, chickpeas and rapeseed are the main winter-planted crops.

SUBSIDISED FOOD

"A few broad indicators like area, sales of seeds and soil moisture indicate that wheat acreage will be as good as the previous year, implying almost similar production," said Indu Sharma, chief of the state-run Directorate of Wheat Research in Haryana, a major wheat growing state in northern India.

India, second to China in wheat production, in 2013 recorded its sixth straight year in which output exceeded appetite. Local demand hovers around 76 million tonnes a year.

To cut stocks, the government has exported nearly 4.5 million tonnes of wheat since December 2011 - the first time it allowed exports since a ban in 2007 - and has asked state-run traders to ship out another 2 million tonnes.

The government buys more than a third of India's total wheat output to supply subsidised food to the poor. It has recently expanded its food welfare programme to feed 70 percent of its 1.2 billion population.

Purchases by the state-run Food Corporation of India make the government the biggest hoarder of the grain. As a result, open market prices have remained high despite bumper harvests, giving farmers good returns on wheat.

"If we do not see any pest attack, unseasonal rains and higher temperatures in February-March, we see farmers getting good yield on their average (annual) planting of nearly 29 million hectares," Sharma said.

BRIMMING

Indian reservoirs are brimming after this year's 6-percent higher than average monsoon rains. That means lower irrigation costs and less use of diesel for pumps, helping the government in its fight to curb fuel use in the world's fourth-biggest energy consumer.

To cash in on good soil moisture, farmers are also likely to plant more area with the main winter-sown oilseed rapeseed, as well as chickpeas. The latter, known locally as chana, is the most popular edible pulse in India, used in everything from curries to samosa.

"I am putting in 10 acres of land under chana as against 8 acres last year because the weather is conducive and yields are expected to be higher," said Keshav Prasad Rathi, a farmer-cum-trader from Akola in western Maharashtra, India's No.2 chickpea growing state.

Farmers and traders said the next chickpea harvest would be near the record levels of 8.8 million tonnes produced in the crop year to June 2013. That is good news for India which has to rely on Canada, Myanmar and Australia for around 2.5-3.5 million tonnes of imports of protein-rich pulses.

If weather conditions do not change abruptly, rapeseed production should exceed the 7.82 million tonnes harvested in the previous year, said a Mumbai-based industry official.

Higher output of rapeseed, which has the highest oil content among India's nine main oilseeds, will help cut imports by the world's biggest vegetable oil importer.

But any major jump in output would also depress oilseed and cooking oil prices, reducing growers' returns on the crop. Unlike wheat, the government does not buy oilseeds from farmers and promises to intervene only when prices fall below a support price fixed by the farm ministry.

(Additional reporting by Ratnajyoti Dutta in New Delhi; Editing by Jo Winterbottom and Joseph Radford)

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