ANALYSIS - As monsoon winds down, risk shifts to winter wheat

By Himangshu Watts

NEW DELHI (Reuters) - Just as India's sugar, soybean and rice farmers begin to breathe easier as the worst monsoon in nearly four decades winds down on a less sombre note, those planning to grow winter wheat are bracing for a serious knock-on impact.

The world's second-biggest wheat producer faces a grim winter: soil moisture is extremely low after summer rains delivered one-quarter less water than normal; hydro-reservoirs are deeply depleted, threatening power shortages and limiting irrigation; and many farmers may shift to planting more profitable rapeseed, which can better withstand dry conditions.

While the government ponders a broader policy response to the ravaged summer rice harvest and a sugar supply shortfall that will force the top consumer into a second year of substantial imports, analysts and traders warned that the worst fallout from the near-failure of the monsoon may not be past.

"The government needs to be better prepared for (these winter) crops. It was caught unaware by scanty rains this summer," said S. Raghuraman, head of research at Agriwatch, a commodity research firm.

At the moment, the outlook still hinges heavily on September rains, essential for ensuring soil moisture is sufficient to support the wheat and rapseed crops, and that reservoirs rise to provide enough water to irrigate the crops, particularly in north and northwest India, where rain deficiency was 37 percent last week.

But the precedent is not good.

Although the summer-sown crops are much more heavily dependent on the June-September monsoon than the winter crops -- three-quarters of India's annual rainfall comes from the monsoon -- the latter have consistently declined almost as severely each year that the monsoon fails to deliver.

For a graphic on Indian crops and rainfall trends, click: