(Rabi) crops may be at risk this year as insufficient showers in some key regions reduced dam levels. The country's 91 main reservoirs held 103.43 billion cubic meters of water as of September 28, down 13 per cent from the 10-year average, according to the Central Water Commission.
The total volume was 66 per cent of the combined storage capacity, compared with 74 per cent a year ago, it said.
The June-September monsoon season is critical to India’s agriculture sector as it directly waters more than half of all farm land and helps fill dams that irrigate crops during winter. This year's monsoon was below normal, with 17 per cent of the country receiving insufficient showers. Rainfall was normal last year after back-to-back deficits.
“If one looks at the reservoir levels, the winter crop is certainly at risk.” said Suvodeep Rakshit, senior economist at Kotak Securities Ltd. “The risk increases in terms of prices because when there is some uncertainty about production, a lot of speculative players enter the market.”
India’s four-month rainy period, which accounts for more than 70 per cent of annual precipitation, was below normal this year. Showers totaled 841.3 millimeters, or 95 per cent of the 50-year average, in the season, according to the India Meteorological Department. A monsoon is defined as normal when rain is between 96 per cent and 104 per cent of the long-term average.
The area under winter-sown crops, including wheat, pulses and mustard, is likely to be lower than last year on unfavourable weather conditions and depressed prices of some agricultural commodities, Veeresh Hiremath, head of research at Hyderabad-based Karvy Comtrade, said by phone. “Imports of wheat and vegetable oils are going to rise.”
India is aiming to produce 137.6 million tonnes (mt) of food grains, including wheat, oilseeds and pulses, during the winter crop season, which typically starts in October. That compares with 137.2 mt produced a year ago, according to the farm ministry. Any drop in output will potentially boost imports of wheat and vegetable oils into the country, the world's second-biggest producer and consumer of the grain and the top buyer of palm oil. Lower water level in reservoirs “could be a concern going ahead as it will determine the supply of water for both households and farming purposes for the rest of the year,” CARE Ratings said in a report on October 3.
South India, including Andhra Pradesh, Karnataka, Kerala and Tamil Nadu, was among the worst hit, with the region's major reservoirs storing 51 per cent of the total water capacity as of September 28, the water commission said.
Output of monsoon-sown food grains will probably drop 2.8 per cent to 134.67 mt from a year earlier, according to the farm ministry's first advance estimates. Production of rice, the biggest food grain crop of the season, is seen falling around 2 per cent to 94.48 mt, it said. Harvesting typically begins in October. Bloomberg