India's rice harvest may fall far faster than had been
thought thanks to the weak monsoon rains, also expected to hurt production of
corn and sorghum, although an export ban looks off the cards for now.
US Department of Agriculture staff in New Delhi slashed to a
six-year low of 94m tonnes their forecast for rice production in India, the
world's second-largest producer, after China.
The downgrade, to a level 6.0m tonnes below the official
USDA forecast, reflected the weak start to the monsoon, which "at best can
recover to 85% of normal [rainfall] based on the last 10 years' monthly
precipitation data", the bureau said in a report.
Official Indian meteorologists last week acknowledged the
monsoon set to prove "deficient", implying a shortfall of at least 10% from
For rice, the water shortage meant growers were likely to
cut sowings by 2m hectares to 42m hectares.
"Planting progress is currently lagging behind last year's
level by about 2m hectares, and the window of opportunity for planting rice in
most states will be over by the second week of August," the briefing said.
"In a worst case scenario, if the monsoon rains remain deficient
in August, production will almost certainly not achieve even that reduced
level," of 94m tonnes.
Government to step
India's rice harvest has taken on particular global
importance since top exporter Thailand initiated a stockpiling programme,
supporting rural incomes but lowering supplies available for export.
India has exported more rice than Thailand in 2011-12, and
will ship only 1m tonnes less in 2012-13, on current USDA estimates.
However, while India's government may thanks to weaker rice
harvest hopes "explore additional market control measures", such as limits on
hoarding and a ban on futures trading, to keep domestic prices in check it is "unlikely
to impose any export control measures on
rice wheat and corn" unless production prospects deteriorate further.
"If rains remain deficient through August/September, the
government may review exports of non-basmati rice, wheat from government stocks
and corn, with an eye to an export ban," the USDA bureau said.
The comments, which follow a caution from the United Nations Food and Agriculture Organization over the risk of Indian export curbs, came as
the country revealed limited success in an effort to sell down part of its huge
India sold 100,000 tonnes to Toepfer, the German trading
house, at $302 a tonne, and a further 20,000 tonnes at $296.68 per tonne.
Singapore-based trading company Starcom bought 70,000
tonnes, also at $296.68 per tonne, but bids for a further 50,000 tonnes were
India is aiming to sell 2m tonnes of stocks, which swelled
to 47.5m tonnes at the start of the month, nearly three times a target of 17.1m