Rice output may be 7% less than forecast

Rice output in India, the world’s second-biggest producer, will decline 7 per cent more than forecast next year because of a drought in the main growing regions, the US Foreign Agricultural Service said.

Production will be 82 million tonnes (MT) in the year starting October 1, compared with 88 MT forecast early last month, the US Department of Agriculture’s (USDA’s) Foreign Agricultural Service said in a report. India harvested a record 99.2 MT of rice in the 2008-09 season, it said.

“Most of the decline in rice production will be in the states of Uttar Pradesh and Bihar, which after a prolonged drought is now facing floods in some parts,” the USDA said. “Rainfall distribution in the major rice surplus states of Punjab, Haryana and Andhra Pradesh was also significantly below normal although better irrigation coverage in these states has mitigated production losses.”

India’s weakest monsoon in at least seven years caused drought in about half the country this year, damaging crops of rice, sugar cane and oilseeds. The monsoon, the main source of irrigation for India’s 235 million farmers, will be 15 per cent to 20 per cent below a 50-year average this season, according to the nation’s weather bureau.

The area planted with rice in the South Asian nation this year is 7 million hectares less than a year earlier, and may lead to a drop of 16-18 MT of monsoon- sown rice output, the USDA said. Record government stockpiles will make up for any shortfall in production, it said.

India may continue a ban on exports of non-basmati rice indefinitely and scrap a duty on imports to encourage private imports of the grain, the USDA said.

Rice futures for November delivery fell 4 cents, or 0.3 per cent, to $13.125 per 100 pounds on the Chicago Board of Trade yesterday. The price rose 15 percent in the past six months, partly because of the unfavorable Indian weather.