Monsoon revival seen in early July, lull persists

NEW DELHI Thu Jun 26, 2014 9:30pm IST

Men run for cover during a heavy rain shower in Chandigarh June 13, 2014. REUTERS/Ajay Verma/Files

Men run for cover during a heavy rain shower in Chandigarh June 13, 2014.

Credit: Reuters/Ajay Verma/Files

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NEW DELHI (Reuters) - India's rain shortfall shrank in the third week since the onset of its monsoon, recovering a little after a poor start, but farmers remain concerned as rains are a third below normal due to sluggish progress toward grain belts in the northwest.

India, one of the world's biggest producers and consumers of rice, corn, cooking oil, sugar and cotton, relies heavily on annual rains as nearly half of its farm lands are rainfed.

India's farm sector accounts for 14 percent of its nearly $2 trillion economy. Poor rains could hit summer crops, raising food prices and pressuring economic growth that has nearly halved to below 5 percent in the past two years.

Rains were 31 percent below average in the week to June 25, the weather office said, improving from 45 percent below average in the second week of the monsoon.

The first week recorded the sharpest deficit of 49 percent below average as the monsoon arrived over the Southern Kerala coast five days after the usual date of June 1.

The rainfall gap for the season so far stands at 41 percent below average, although weather forecasters say it is too early in the monsoon to predict that India is on course for its first drought in five years.

"We expect the monsoon to revive in the first week of July," said D.S. Pai, lead forecaster of the India Meteorological Department (IMD).

Experts forecast the rainfall gap could scale down to 30-40 percent below average in June, better than the 47 percent deficit in the first month of 2009 when the season turned out to be the driest in 37 years due to an El Nino formation.

Sowing of main summer crops such as rice, corn, soybean, sugar cane and cotton have already started in many areas, but are behind schedule.

"Sowing can accelerate by mid-July erasing the current delay of 10 to 15 days," said N. Chattopadhyay, deputy director general of IMD.

NO PANIC BUTTON

Chattopadhyay said there was no point in raising alarm over a widespread drought as the Indian sub-continent would always have some areas under water stress.

"We may not have a bumper grains output this year, but there is still room for a normal level of production," he said.

On Thursday, Prime Minister Narendra Modi reviewed the latest status of the monsoon at a high level meeting, attended by Home Minister Rajnath Singh, Finance Minister Arun Jaitley, Agriculture Minister Radha Mohan Singh and Food Minister Ram Vilas Paswan.

Rainfall is likely to improve in the crucial planting months of July and August, despite the weak monsoon progress so far, said weather officials briefing Modi and his cabinet colleagues.In an attempt to contain market speculation over food prices, the government has since mid-June taken measures to improve supply-side sentiment, including introducing minimum export prices for basic food items such as onions and potatoes.

The government has also decided to sell 5 million tonnes of rice in domestic markets from its stocks as part of measures to curb inflation.

(Editing by Keiron Henderson)

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