Monsoon is driest in more than 3 decades

India’s monsoon rainfall, the main source of irrigation for the country’s 235 million farmers, is the weakest in more than three decades, threatening farm output in the world’s second-biggest producer of rice, wheat and sugar.

Rain in the June-September season are 23 per cent below the long-period average, the most since the 23.4 percent deficit in 1972, Ajit Tyagi, director general of the India Meteorological Department, said in an interview.

Sugar jumped to a 28-and-a-half-year high amid forecasts that India, the biggest user, will remain the largest buyer after drought in half the nation hurt crops of cane, rice and oilseeds. Rains returned in mid August, following a driest June in eight decades, filling up lakes and aiding efforts by Prime Minister Manmohan Singh’s government to lift winter-sown crops including wheat.

“The government will now need to put all its efforts in salvaging the winter agriculture production,” said Dharmakirti Joshi, an economist at Crisil, a unit of Standard & Poor’s. “This year’s drought may be less traumatising. Nevertheless, it is a drought.” The monsoon-sown rice production will fall 10 million tonnes from last year’s record as inadequate rainfall forced farmers to pare acreage by 6.1 million hectares. Duty-free imports of white sugar will be permitted until May or June, extending an earlier exemption, to bolster supplies, Farm Minister Sharad Pawar said last week. The nation may have a shortfall of 8 million tonnes in 2009-10 season, Czarnikow Group said earlier. The impact of falling farm output on economic growth and consumer spending is likely to be countered by the government’s actions to support incomes of the rural and urban poor, Crisil’s Joshi said. Food prices will be pressured by drought, he added.

‘Stimulus package’
“The impact of drought on overall economic growth will be limited as the industrial and services sectors are responding to the government’s stimulus package,” he said. “Food inflation, which has been above tolerable levels since the mid of 2006, will stay under pressure due to the drought.”

Asia’s third-biggest economy is expected by the Reserve Bank of India to expand 6 per cent in the financial year to March 2010, slower than the 8.7 per cent average annual growth in the last four years.

To be sure, rains will continue over most parts of the country, save for the northwestern region that includes the biggest grain-producing states, aiding standing and winter-planted crops including wheat, weather bureau’s Tyagi said. India’s 81 main reservoirs were 59 per cent full on September 24, compared with 57 per cent a week ago.