MUMBAI (Commoditiescontrol) – India rating is optimistic about kharif crops despite deficit monsoon due to increased area, which has reached to 99.87 million hectares as on September 4, 2015, higher by 1.93 million hectares same period last year, it said in its latest report.
The rating agency expects the overall kharif output this fiscal to be still better than in the last fiscal.
India Ratings and Research said that “Dry spell during August and September may adversely affect the sowing of Rabi crop as it helps to retain moisture in the soil and the level of water in the major reservoirs across the country.”
The water level in the 91 major reservoirs was 92.92 billion cubic meter on 3 September 2015, which is 16% lower than that observed in the corresponding period last year as well as average of last 10 years, it said.
Cumulative rainfall in the country as a whole during the current season up to September 10, 2015 has been 15% below LPA. The worst affected is southern region.
28 percent of the districts in Telangana, Tamil Nadu, Karnataka and Kerala received deficient or scanty rainfall, India Rating Agency noted.
A less-than-normal monsoon in general leads to high food inflation. However, the agency believes that a number of factors such as i) efficient food management through timely release of food stocks by the government (open market sale of 22,380 tonne rice and 277,950 tonne wheat till August 2015), ii) limited increase in agricultural support prices and iii) lower international food prices discouraging exports have kept cereal prices under check. Also, the impact of a less-than-normal monsoon on rural consumption would be less severe than what it used to be a decade ago or earlier due to the rising share of non-agricultural income in the rural income.
(By Commoditiescontrol Bureau; +91-22-40015533)