India: One Disaster Away From Disaster

The stalled monsoon rains this summer across large swathes of northern India are set to see rice production in the country fall from 99.15 MMT in 2008 to just 84 MMT this year, according to the USDA.

Kariff rice production only has a short growing season, being sown from mid-May through to the end of August, and harvested October through to January. Rice acreage is estimated down around 20% this year, which is seen having a knock-on effect in demand for winter sown wheat.

The country relies on the monsoon season to provide almost three-quarters of the year's rain. So far this season rains have been 29% lower than normal (1st June - 12th Aug) on a national level, and considerably more than that in many parts of the breadbasket northwest of the country.

The government have been moved to assure the public that strategic reserves of rice and wheat held in state-owned stores are adequate. But with state-level elections coming up, what else are they going to say?

"There is no point in pressing the panic button," said the country's Finance Minister, playing down the potential effect of the drought on economic growth.

The government are already being urged to release some of these stocks onto the open market. After buying a record amount of wheat in excess of 25 MMT on the domestic market following the harvest in March/April, the quantity of wheat left in private hands is fast diminishing.

"There is hardly any wheat stock left with the private trade in the open market," said the president of an Indian Flour Millers Association last week.

Compare this map of Indian rainfall this monsoon season here, with a map of where winter wheat is grown here.