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Monsoon soaks India soybean area after June lag by Ratnajyoti Dutta


India’s vital monsoon rains revived in the soybean-growing central region on Thursday, after a two-week lag that reduced June rainfall to 16% below normal, the second lowest in 15 years.

Heavy showers in the central Madhya Pradesh state 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 2 July or3 July,” Ajit Tyagi, director general of the India Meteorological Department (IMD), told Reuters.

The erratic behaviour of the June-September monsoon has often led to incorrect forecasts, with the most recent example being last year, when early forecasts were for normal rains but India 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% last month, having risen steadily after last year’s monsoon failure.

Sluggish monsoon rains 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 31 May, a day ahead of schedule, but had not advanced beyond eastern and central India since 18 June.

June rainfall was below normal but still 60% 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 rains, the main source of water for 60% 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 the India Meteorological Department of Bhopal, told Reuters.

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 from the central city Indore over the phone.

India’s food prices were up an annual 16.90% in mid-June, while the overall inflation rate has risen above 10%, 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 the government last week lifted controls on petrol prices and raised the state-set rates of diesel, cooking gas and kerosene.

Samiran Chakraborty, regional head of research, India, at Standard Chartered Bank said if rainfall remained weak in July also, it may 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.

“But 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.