With the southwest monsoon showing late resurgence, government officials and private players are expecting another year of good kharif harvest in 2018-19, that in turn could again depress prices, impacting farm incomes.
In oilseeds and pulses, the government is sitting on stock in excess of 5.5 million tonnes, which could also impact prices.
Overall, though the southwest monsoon as on September 7 was seven per cent less than normal, though much of this had to do with low rains in the initial part of the season.
In the first week of September, rains were around 18 per cent below normal but far better than the over-25 per cent shortfall seen a few weeks ago. Data showed that out of the 662 districts for which reporting was done — from June 1 to September 5 — the southwest monsoon was normal in almost 64 per cent of the districts and deficient in the remaining 36 per cent.
Even in districts where rainfall has been less than normal, weather officials said the shortage was mainly due to low rains in the first half of the monsoon season that starts from June. Thereafter, there has been good distribution in August, which could salvage part of the situation.
On Thursday, National Collateral Management Services (NCML), a private post-harvest management company, in its second advanced estimates for 2018-19 Kharif crop production revised its total grain production estimate to 136.75 million tonnes.
This is a tad lower from its earlier estimate of 137.73 mt released a few months back, and just 3 per cent less than last year’s record harvest of 140.73 mt.
“Concerns on sowing of kharif crops and impact on the final harvest have dissipated as the rains progress, and now we are anticipating a bumper kharif harvest in 2018-19,” a senior agriculture ministry official said.
He said the projections coming in of kharif harvest are all initial estimates, and production will be good in the final analysis.
“Also, remember that 2017-18 was a record kharif production year, so a small drop in output may not be all that bad,” the official said.
Till September 7, kharif crops were sown in around 104.16 million hectares, which was 0.20 per cent more than the area covered last year (which was a record harvest year), and 2.25 per cent more than the normal area sown during the kharif season as an average of the last five years.
For the first time, acreage crossed last year’s level during the week.
“Now that acreage is normal and production is expected to be good for most kharif crops, the biggest concern for the government should be to ensure how farmers get the minimum support price announced a few months ago,” Madan Sabnavis, chief economist at CARE Ratings, told Business Standard.
Sabnavis’s concerns stem from the fact that prices have fallen below the state-mandated MSP, owing to the bumper harvest in the last few years as well as a drop in demand.
Another year of low prices may have a direct bearing on the rural economy, which has shown signs of revival of late.
Meanwhile, water levels in 91 major reservoirs across the country have also risen, which augurs well for the coming rabi harvest.
Data sourced from the Central Water Commission shows that till September 7, water levels in the reservoirs were 130 per cent more than last year, and 114 per cent more than the average of 10 years.
“For us (IMD), the water level in reservoirs and kharif sowing progress are two important parameters to judge how the monsoon was distributed. In these two, performance has been good, which shows that rains have been fairly well distributed,” IMD Director General K J Ramesh said.
P K Joshi, Director (South Asia) of International Food Policy Research Institute (IFPRI), said good and fairly well-distributed rains have once again raised the prospect of bumper oilseeds and pulses production this year.