Monsoon Report- 29 June 2012 - Angel Backoffice

Monsoon Report and Sowing Update

Monday | July 02, 2012

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Content

Highlights

Southwest Monsoon: A flashback of 2011

Southwest Monsoon 2012- A slow beginning

Hike in MSP of Kharif crops

Sowing Progress of Kharif crops

- Cereals

- Pulses

- Oilseeds

- Cotton

- Sugarcane

Conclusion

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Monsoon, the backbone of the agrarian economy, has a strong hold on the country’s agricultural output and

consequently the vast majority of the rural population. The southwest monsoon rains, which India receives during

the four months of the year (June to September), accounts for nearly 74 - 75% of the countries total rainfall. Thus,

it has a large bearing on the crops that are totally dependent on the rainfall. Nearly, 55-60 percent of the net sown

area is rain fed. India gets nearly 53% of its agricultural produce from the Kharif season (June-September) and the

main crop grown during this period includes Rice, Jowar, Bajra, Tur, Urad, Soybean, Groundnut, Cotton etc.

Southwest Monsoon: A flashback of 2011

After a severe drought of 2009, India received bountiful rains during the last two consecutive years. In 2011

southwest monsoon season was a normal season with rainfall of above 2% (102% of LPA). The monthly rainfall

over the country as a whole during all the four months of the season (June-Sept) except July, was above the LPA

value. The monsoon set in over Kerala on 29th

May, three days earlier than its normal date of 1st June and covered

the entire country by 9th July 2011, earlier than its normal date of 15th July. However, the withdrawal of monsoon

from west Rajasthan was delayed and it commenced only on 23th September compared to its normal date of 1st

September.

Due to above normal monsoon in 2011, the agricultural output of Kharif food grains increased by around 6%

except for Pulses, where the output declined amidst lower area under cultivation.

Southwest Monsoon 2012- A slow start

Indian Metrological department on 22nd

June, 2012 has predicted monsoon to be normal at 96 percent of LPA for

the season June-September 2012. The department in April had predicted normal rainfall at 99 per cent of average

in its First Long Range Forecast. IMD has forecast that rainfall over the country as a whole in the month of July

2012 is likely to be 98% of its LPA and that in the month of August is likely to be 96% of LPA both with a model

error of ± 9 %.

Rainfall for 2012 over the four broad geographical regions of the country is likely to be – 93 % of LPA over North-

West India, 99% of LPA over North-East India, 96% of LPA over Central India and 95% of its LPA over South

Peninsula, all with a model error of ± 8 %.

Highlights

• IMD projects 2012 monsoon to be normal at 96% of LPA

• Seasonal rainfall for the country from 1st

June to 27th

June 2012 has been 23% below normal.

• For week ended 27th

June 2012 rainfall has been recorded 18% below normal

• Total storage capacity in the water reservoirs as on 28.06.2012 is 16% of the storage capacity

• Sugarcane planting almost complete- acreage up 4.6% till date

• Pulses and Oilseeds sowing down by 34 percent and 17 percent respectively




Current Status of Southwest Monsoon 2012

In the current season, along with the delay in the onset of monsoon, the advancement has been also

very slow. Further, in the month of June so far, monsoon rains are 23% below normal compared with a 10.7

percent surplus in June 1-29 last year. The cumulative seasonal rainfall in Northwest India, Central India and South

Peninsula was 63%, 34% and 28% below normal respectively. While, East & Northeast India recorded near normal

rains at 04 % of LPA.

Storage status of reservoirs in India

Central Water Commission is monitoring storage status of 84 important reservoirs spreaded all over the country.

The total live storage in 84 important reservoirs in different parts of the country, monitored by CWC as on

28.06.2012 is 25.364 Billion Cubic Meter (BCM) which is almost 16 per cent of the storage capacity at Full Reservoir

Levels (FRL). The current year's storage is nearly 62 percent of last year's storage and 103 percent of the average of

last ten years.

A Hefty hike in MSP of Kharif crops

Considering a substantial rise in the input cost and

with intent to boost production, the Cabinet

Committee on Economic Affairs (CCEA), hiked the

Minimum Support Price (MSP) of Kharif crops that are

sown during the months of June - August and

harvested mid September onwards. A substantial hike

in the MSP is seen oilseeds and Pulses as the focus is

to keep in check the imports of edible oil and Pulses.

Besides these, government has also focused on the

cash crops like cotton where the MSP is hike by around

28% for medium staple cotton.

A significant rise in the MSP would definitely provide

some relief to the farmers as they would be assured of

reasonable returns. However, the ultimate outcome

depends on the south west monsoon which is

considered as the backbone of the Indian agriculture.

Even if farmers opt for a particular crop considering

the higher returns, monsoon advancement and the rainfall distribution would have a significant impact on the

output.

Sowing progress of Kharif crops

Rice

Rice is the main Kharif sown crop in India and holds a

major chunk of about 68% of the total food grain

produced in the Kharif season. West Bengal

contributes about 18-20% share in the total Rice

production in India, whereas Bihar, Assam and other

Northeastern states contributes more than 10% share

in total Rice production in India. Although, monsoon

has recovered in the north eastern part of India in the

last week, the overall sowing remain lower.




Area under Rice cultivation as on 28th

June, 2012 stood at around 30.7 lakh hectares (ha) as against 41.5

lakh ha a year ago period. Compared to last year, less sowing is reported in almost all the states due to

delayed monsoon. However, nursery preparation under irrigated condition is in progress. Out of the total

area under rice, Punjab has planted Rice under 14.1 lakh ha so far in the current season. With the forecast of near

normal monsoon in the major rice growing areas we expect planting to gain momentum in the coming weeks

Pulses

Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh and

Uttar Pradesh are the main Kharif pulses producing states.

According to IMD, monsoons in central and Southern parts of

the country (Kharif Pulses producing regions) are expected to be

96% and 95% of the LPA respectively. However, monsoon in

these regions have been 34% and 28% below normal so far and

this has affected sowing of Pulses to a large extent. Area sown

under Pulses this year is 34% lower at 3.99 lakh hectares

compared to 6.08 lakh ha during the same period last year.

According to Andra Pradesh Farm department, area under

Pulses is down by 48.7%.

Going by the area under Pulses cultivation till now and the monsoon progress as of today we expect area under

Pulses to remain stable or may even decline if monsoon fails to recover in the month of July.

Oilseeds

Major Kharif oilseed producing regions are Madhya Pradesh

(Soybean), Gujarat (Groundnut) and Andhra Pradesh. Soybean is

the largest produced oilseed in India and the area under this

protein crop is expected to increase this season as farmers may

shift to this crop on account of higher returns earned in 2011-12

season. The sowing which was lagging behind due to below

normal rains has recovered with advancement of monsoon in

Maharashtra. As on 28th

June total oilseeds sowing is down by

17% while area under soybean increased by 37% to 6.3 lakh

hectares.

Oilseeds planting would improve further once monsoon fully grips the Western, Central and Northern parts of

India.

Cotton

Cotton, one of the most important cash crops of India may witness drop in acreage in the coming season as

farmers may shift to more lucrative crops like Soybean in Maharashtra and Guar in Rajasthan. North India, Cotton

sowing is completed in the irrigated areas. However, in other parts it commences with the onset of monsoon. Area

under Cotton cultivation is up 7% as on 28th

June, 2012 at 3.14 mln ha compared with 2.92 mln ha a year ago. In

Sugarcane

Sugarcane planting is almost completed across India with acreage higher so far by around 4.6% at 52.2 lakh

hectares. The cane crop is in the growing phase and thus southwest monsoon is very crucial to maintain yield of

the crop. Expectations of below normal rains might affect sugarcane and thereby sugar output in 2012-13 and this

has led to the upside in sugar prices in the last 2-3 weeks.




Spices

Turmeric and red chilli sowing in the southern regions of the country, the hub of spices, starts with the onset of

monsoons. However, this year sowing of Chilli in Guntur and adjoining areas have commenced on slow pace and is

likely to gather pace only by the mid of July on account of inadequate rainfall. With respect to Turmeric, sowing is

expected to decline this year as farmers may shift to other remunerative crops. AP contributes 50% in the total

Turmeric output in India. Normal acreage under turmeric in A.P. is around 67000 hectares. However, till now only

7000 hectares area has been covered so far.

Conclusion

As far as the monsoon is concerned, the current predictions of South west monsoon rainfall at 96% of LPA do not

point towards a major downfall in the production of Kharif crops. However, in addition to the overall monsoon

rainfall, the even and timely distribution across regions and its withdrawal also plays crucial role in the determining

the output of any agricultural commodity.

In the past few weeks, we have noticed that the prices of almost all the Kharif agri commodities have witnessed a

rise. However, the extent of the gains varied depending on the existing fundamentals of the commodity. It is very

early to predict the impact of below normal rains on sowing and yield of Kharif crops because if the monsoon

recovers in the month of July as predicted by IMD, then it may boost the sowing which was lagging behind in the

month of June.

Thus, the monsoon progress has to be watched closely in the coming days to get a clearer picture of the crop

prospects for this season.




Documents

Monsoon Report- 29 June 2012 - Angel Backoffice