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  Monsoon soaks soybean area after June lag
http://www.business-standard.com 07022010

Monsoon revived in the soybean-growing central region on Thursday, after a two-week lag reduced the June rainfall to 16 per cent below normal, the second lowest in 15 years.

Heavy showers in Madhya Pradesh would accelerate soybean planting in the world’s top importer of edible oils and ease growing nervousness about monsoon rains.

The weather office reaffirmed its prediction of a normal monsoon this year, in line with several forecasts from global agencies.

“I stand by the forecast of normal monsoon. We are hopeful of a revival by July 2 or July 3,” Ajit Tyagi, director general of the India Meteorological Department (IMD) said.

The erratic behaviour of the June-September monsoon has often led to incorrect forecasts, with last year being the most recent example, when early forecasts were for normal rain but the country saw the worst drought in nearly four decades.

The shaky start to this year’s rainy season heightens concerns about food inflation, which soared to nearly 17 per cent last month, having risen steadily after last year’s monsoon failure.

Sluggish monsoon rain would discourage the government from lifting export curbs on wheat and rice although the country has massive stockpiles, analysts say.

“Curbs on grain exports would continue until the monsoon ends,” said S Raghuraman, an analyst with the Delhi-based consulting firm Agriwatch.

IMD said adverse local weather conditions had weakened the monsoon winds, which reached the country’s southern coast on May 31, a day ahead of schedule, but did not advance beyond eastern and central India since June 18.

June rainfall was below normal but still 60 per cent higher than a year ago, IMD data showed. In June 2009, rainfall was nearly half of normal, making it the driest month in 83 years.

Crop planting
The poor start of monsoon rain — the main source of water for 60 per cent of Indian farms — had slowed planting of soybeans in central India, while farmers in the grainbowl states of Punjab and Haryana may delay rice planting if rains are delayed in northern India, traders and officials said.

In the past week, rainfall was a quarter short of normal but farms in central India received good rains on Thursday.

“Monsoon has revived in Madhya Pradesh,” D P Dubey, director of the regional office of IMD said.

This should help the soybean crop, industry officials said.

“Sowing will pick up now,” A S Chandel, director at the Soybean Processors Association of India said.

India’s food prices were up an annual 16.90 per cent in mid-June, while the overall inflation rate has risen above 10 per cent, maintaining pressure on the central bank to tighten monetary policy.

India’s inflation — which has already triggered several protests in the country — may rise further as last week the government lifted controls on petrol prices and raised the state-set rates of diesel, cooking gas and kerosene.

Samiran Chakraborty, regional head of research at Standard Chartered Bank said if rainfall remained weak in July also, it might hit economic growth.

“It is too early to revise our GDP estimates based on just June rainfall. July is the crucial month and if this deficit rainfall trend continues in July, then we may see a drought-like situation and in that case, may have to revise our GDP estimates downwards and inflation upwards,” he said.

“As of now, there is no need to do so just based on June numbers,” he said.

D Sivananda Pai, director of the National Climate Center in the western city of Pune, said the La Nina weather phenomenon was likely to develop and catalyse monsoon rains.

Last week, Australia’s weather office said the chance of a La Nina weather event developing in 2010 was now more certain.


Other Headlines
Monsoon soaks soybean area after June lag
Monsoon lags, may yet cover country on time
                
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