Rabi Crop Output A Concern If Monsoon Pick-Up Doesn't Sustain
India's rabi or winter crop output could be impacted if the pick-up in monsoon doesn't sustain as reservoir levels remain low in parts of the country.
National reservoir levels are at 63%, only 4% below the 10-year average. But the geographical split tells a different story, according to a note by Credit Suisse. While it is 81% in south India, the north, east and west are all running well below the 10-year average.
The concern is in the north, where it is 37% below normal at 49%. Levels are low in the east, central and the west too, but some of these are one-crop areas.Credit Suisse
India has, so far, witnessed its lowest cumulative rainfall in six years. Weak spells of rains, particularly in August, have left a deficit in large parts of Gujarat, Rajasthan, Uttar Pradesh, Madhya Pradesh and Chhattisgarh. Even with rains improving over the past week, the cumulative rainfall is still 9% below normal.
In case the recent pick-up doesn't sustain, then India would face challenges with soil moisture and reservoir levels for rabi crops sown in the winter. "Good reservoir levels are essential for rabi crops, which are mostly reliant on irrigation facilities," a research note by IDFC First Bank Ltd. said.
ICRA Ltd. Chief Economist Aditi Nayar, however, also pointed that heavy rainfall in September could hurt the standing crops that were sown earlier.
There are fewer concerns for kharif crops that could see potentially lower yields and higher pumping costs due to the deficient rains. But that would be offset by higher global food prices, Credit Suisse said.
But sowing of kharif crops is lagging, even though it has started increasing more recently. IDFC First Bank said the area sown for kharif crops at August-end was 1.8% lower than last year, compared with 4.7% lower in July. The biggest year-on-year decline in area sown has been for cotton, followed by coarse cereals, oilseeds and rice.
Still, the spatial distribution of rainfall and sowing trend indicate that the impact will remain limited on kharif crops, it said. Besides, most of the key food-grain producing states are expected to get normal rainfall, it said.