India’s drought has spread to nearly half its more than 600 districts, particularly in sugar producing areas, but the government said its grain stocks were bigger than last year and sugarcane output would not fall.
The farm ministry said that drought had hit 299 districts as at September 10 including 58 in Uttar Pradesh and 28 in Maharashtra, the two biggest sugar-producing regions of India.
India’s vital monsoon rains have been 20% below average since the start of the season in June despite near-normal rains since mid August and heavy showers this month.
India’s cane area has contracted for two consecutive years because of low prices in the past and drought in the main crop area this year, but Farm Commissioner N B Singh said recent rains would ensure a steady crop output.
Analysts said that even if the cane output was the same, sugar production could still fall, leading to large imports by the world’s top sugar consumer. Such concerns have already hoisted raw sugar futures to the highest in nearly three decades.
That is bad news for India, which consumes about 23 million tonnes a year and is expected to start the new season with stocks of only 2.7 million tonnes, the lowest in 15 years.
Output forecasts have often gone wrong in India, such as in 2008/09, when millers initially forecast an output of 22 million tonnes but the country finally produced about 15 million tonnes.
Mr Pranab Mukherjee finance minister said that the country had enough grains to face the drought but there was a shortfall in lentils and edible oils.
Government sources told Reuters that the country’s rice stocks, as on Sept 1, had doubled to 17.2 million tonnes, from a year ago, while wheat stocks were up 30 percent at 30.1 million tonnes.
The farm ministry aims to boost the area and yield of winter sown crops to make up for the loss of crops after the driest June in 83 years and an exceptionally dry phase in the first two weeks of August.
Government officials and analysts said that heavy showers in the past two weeks would help increase soil moisture that is vital for winter sown wheat and rapeseed.
(Sourced from http://www.steelguru.com/news/index/2009/09/14/MTExNTg0/Macroeconomic_indicators_-_Drought_expands_in_India.html)
Sunday, September 13, 2009
Macroeconomic indicators - Drought expands in India
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