Record grain output will help new government

By Mayank Bhardwaj

NEW DELHI (Reuters) - India is set to harvest a record 264.4 million tonnes of grains in the crop year that ends in June, the farm ministry said on Friday, easing pressure on a new government that may have to deal with poor monsoon rains later in 2014 due to the El Nino weather pattern.

"Record output in wheat and rice provides a breather against the El Nino threat," said Tajinder Narang, a trade analyst.

He added that record output would help the new government continue the country's policy of unrestricted grain exports in the short term.

Opposition candidate Narendra Modi will be the next prime minister of India, with counting trends on Friday showing the pro-business Hindu nationalist and his party headed for a resounding election victory.

Total rice output is expected to hit 106.29 million tonnes in the current crop year, up from 105.24 million tonnes the year before. Wheat output is likely to reach 95.85 million tonnes, compared to 93.61 million tonnes produced a year earlier.

Farmers in India, the world's second-biggest rice and wheat producer, harvested 257.13 million tonnes of grains in the crop year to June 2013.

The weather office on Thursday said annual rains could hit the southern Kerala coast on June 5, roughly five days behind their normal arrival.

Monsoon rains irrigate nearly half India's farmland.

Record rice and wheat output will boost stockpiles, providing a cushion against a possible El Nino, which forecasters around the world say is increasingly likely.

El Nino is a weather pattern marked by heating up of sea surface temperature in the Pacific Ocean, and usually causes droughts in the Asia Pacific including India.

Since grain export restrictions were eased three years ago, India has emerged as the world's top rice exporter and a key supplier of wheat to Southeast Asia and the Middle East.

(Additional reporting by Ratnajyoti Dutta)