July 30 (Bloomberg) -- Monsoon-sown grain production in India may climb to a record this year as the best start to the rainy season since 1994 spurs rice and corn planting, potentially easing inflation in Asia’s third-largest economy.
The production of crops from corn to rice and barley may exceed the all-time high of 131.3 million metric tons in the 2011-2012 season and last year’s 128.2 million tons, Tariq Anwar, junior agriculture minister, told reporters in New Delhi today. Farmers planted rice, oilseeds, cotton and sugar cane in 74.8 million hectares (184.8 million acres) as of July 26, about 18 percent more than the same period a year earlier, according to data from the Agriculture Ministry.
A bigger harvest may help tame inflation and revive India’s economic growth from a decade low, while adding to a global grain glut that’s pushed the Standard & Poor’s GSCI Index of eight agricultural commodities down 18 percent this year. The stronger than expected monsoon has not yet softened food inflation as much as it should have, the Reserve Bank of India said in a statement today. The consumer inflation quickened to 9.87 percent in June, according to official data.
“We can expect there to be a moderation in food inflation on account of a good monsoon,” said Madan Sabnavis, chief economist at Credit Analysis & Research Ltd. “While overall agricultural growth may exceed last year’s levels on account of good rains, there could be specific pressure on lentils and oilseeds as excess rains may damage the crops.”
Rains were 17 percent more than a 50-year average at 506.7 millimeters (19.95 inches) between June 1 and July 29, according to the India Meteorological Department. That’s the most since at least 1994, according to data from the bureau. The country received 32 percent more rains than the average in June.
Agriculture accounts for about a fifth of India’s economy, while 55 percent of the farm land does not have access to irrigation and more than 235 million farmers depend on rain for growing crops.
Soybean output may climb from all-time high of 14.7 million tons in 2012-2013, while corn harvest may increase from 22.2 million tons, said J.S. Sandhu, the nation’s agriculture commissioner. There are no reports of adverse impact on crops because of excess rains, Sandhu said.
“More than 95 percent of the crop has been planted already and the crop is shaping up well,” said Rajesh Agrawal, a spokesman for the Soybean Processors Association of India. “The only worry is that it has been raining continuously in many areas and we are waiting now for some sunshine.”
Soybeans were planted across 11.7 million hectares as of July 26, up 16 percent from a year earlier, according to the Agriculture Ministry. Corn area increased 25 percent to 7.1 million hectares, while cotton planting rose 8 percent to 10.5 million hectares.
“There has been timely rain all over and cotton planting has been better than last year,” said A. Ramani, secretary of the Indian Cotton Federation, which represents 350 spinners, ginners and traders. “This will ensure that the yield is higher and we could have a better crop this time.”
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