* Signs of monsoon revival visible-Met office
* Rains could improve over rice-growing areas
* Domestic farm futures extend day's gains
(Adds details, market reaction, background)
By Ratnajyoti Dutta
NEW DELHI, July 19 India's monsoon rains lost
momentum again last week, falling nearly a fifth short of
averages and raising the risk of a drought year in one of the
world's leading producers of grains and sugar just as global
prices hit record highs.
Rainfall was 22 percent below average across the country in
the week to July 18, even though the parched interior in the
south received downpours up to 179 percent above average, data
from the India Meteorological Department (IMD) on Thursday
Key oilseeds and cane areas received scant rains in the
retreat, which came after rains had scraped one percent above
average in the week to July 11 -- the first weekly surplus in
the current June to September season.
June and July rains bring about 50 percent of totals during
the monsoon -- the main source of water for the 55 percent of
arable land in India without irrigation. Asia's third-largest
economy looks to farming for 15 percent of its wealth.
Sugar, soybean, soyoil and rapeseed futures extended gains
on local exchanges after the data as traders fretted over
supplies, with soybean and soyoil hitting record highs.
Global markets are already on high alert over the world's
food supplies as there seems no end in sight to a drought in the
United States that has damaged crops, pushing soybean prices
there to record highs.
In India this week, Farm Minister Sharad Pawar and Food
Minister K.V. Thomas started talking about a likely cut in
output of rice, which accounts for 70 percent of the total
summer crop, and lentils, with Pawar describing the monsoon as
But both ministers also stressed there was no need for alarm
over domestic supplies as India was sitting on massive
stockpiles of rice and wheat after bumper harvests.
India will decide whether to curb exports of wheat, rice and
sugar in mid-August, after the IMD's new forecast for August and
September at the end of July. The status of the El Nino weather
system that can curb rains further should also be clearer.
The IMD is sticking to its forecast of average rains for the
season at 96 percent of long-term average. Rains less than 90
percent would be a drought -- last seen in 2009 when India had
to import sugar, pushing global prices to 30-year highs.
The poor rains have slowed the speed of planting crops such
as rice, cereals, pulses and oilseeds including soybean, but
areas under sugar cane and cotton, mainly grown in irrigated
regions, have been higher than the previous year.
"Soybean sowing is lagging, but we are also concerned about
yields. It may get affected due to poor rainfall," said Chowda
Reddy, a senior analyst at JRG Wealth Management.
"The delay in sowing will ultimately delay harvesting. Even
in November soybean supplies will remain tight," he said.
Rainfall in top soybean growing Madhya Pradesh state was 36
to 75 percent lower than average last week, while the key
cane-growing region of Maharashtra, the top sugar producer in
the country, got 58 percent lower rainfall.
"Dry weather has affected the cane crop. Since yesterday we
are getting rains. That will limit the damage, but the prolonged
dry spell has already hit the crop," said an official at
Ajinkyatara Co-operative Sugar Factory in Maharashtra.
The August soybean contract on India's National
Commodity and Derivatives Exchange hit a record high of 4,774
rupees ($86.09) per 100 kg after the data on Thursday, while
August soyoil hit an all-time high of 810 rupees per 10
Weathermen see signs of improvements in the monsoon soon,
with showers gaining momentum over rice-growing eastern India.
"Odisha, Jharkhand, Bihar are going to receive good rains in
the next 24 hours," said S.C. Bhan, a director at the Indian
"We expect the monsoon to remain active in the remaining
period of July as no negative trigger is visible," Bhan said.
After the revival in the rice-growing areas, the monsoon is
expected to become more active in soybean areas of central India
in the next 2-3 days.
Weather officials also said the rains would improve in cane
growing areas of northern Uttar Pradesh state early next week,
after the revival in the central region.
Grain bowl states of northwest India - Punjab and Haryana -
are expected to receive ample rains from the middle of next
week. Rains at this point in time will help crops which are
already planted, such as cotton, to grow and reduce the burden
of using water from reservoirs.
($1 = 55.4550 Indian rupees)
(Additional reporting by Rajendra Jadhav in MUMBAI; Editing by
Jo Winterbottom and David Cowell)