New Delhi:
The threat of a drought is again haunting the Indian economy. The ground level situation remains precarious as the farmers are looking towards the heavens for some mercy.
According to the Indian Meteorological Department (IMD), the entire country has a seen a 34 per cent fall in rainfall for the period between June 1 and July 9. The lack of rain is being felt most acutely in the granaries of Punjab and Haryana since the north west part of the country has seen a 50 per cent fall in monsoon. In central India, where soyabean, mazie and groundnuts are growth in plenty, the rainfall has been 162.4 mm, which is 37 per cent below normal. South India has been relatively untouched since it has rained 187.8 mm in the southern peninsula, 15 per cent below normal.
Met department data shows that the two states considered the granary of India, Punjab and Haryana, are seeing a 70 per cent and 67 per cent rainfall deficiency.
"We will need to press the panic button if the rains do not pick up in north west (part of India) in the next week," Akhilesh Guptqa, Director at the National Centre for Medium Range Weather Forecasting told NDTV. He added that he was not expecting that there would be a need to cut the long term average estimate of 93 per cent for the monsoon.
The index of industrial production (IIP) figures showed a surprise jump for the month of May, hinting that the economy was probably turning around. Indian industry grew at 2.7 per cent against the expectation of 1.4 per cent. However, the cheer was dampened because capital good sector registered a contraction, leaving some doubt in the minds of economists.
Kharif crop sowing season starts in June and the sowing season gets over by the end of July. The Indian government is closely monitoring the sowing that is taking place in south and western parts of India, where the rainfall has been better.
For example, paddy is planted from 2nd-3rd week of July once the paddy crop is about 6 inches high. The seed has not been sowed in most of the regions. As a result, experts estimate that the yield per acre for rice is expected to go down by 50 per cent. If the situation does not improve in the next 3 weeks, then the yields could go down by 70 per cent.
The impact of the lack of rain is clearly being felt on the spot prices of agri commodities and vegetables at Mumbai's wholesale market. Spot prices have risen sharply over the last week with prices for pulses up 20 per cent, wheat 30 per cent, rice 36 per cent, onions 60 per cent and tomatoes 100 per cent. Traders are not willing to enter into long term contracts since they are expecting prices to harden further. As of now, India has a buffer stock of 56 million tons of foodgrain.
The availability of foodgrain is hardly a problem, though. Wheat and rice procurement for the year has been at record levels. Wheat and rice has had a bumper production and the Indian government has carried out record procurement of both the commodities this year. That was quite evident in the prices too. Prices on the NCDEX for wheat fell to Rs.940/quintal against the the government-mandated minimum support price of Rs 1080/quintal.
That trend may have been reversed. And that has ominous signs for inflation too.
Primary food articles have a weightage of approximately 15 per cent on the wholesale price index (WPI) while manufactured food products have nearly 11 per cent weightage on the WPI. Various brokerages have indicated that their inflation target for 2009 end is between five and eight per cent.
The government will now have to wait till July 22, when the sowing data up to July 15 will be available to take stock of the situation finally.
Clearly, while the stock markets have been talking of green shoots, the farmers can't see any.
According to the Indian Meteorological Department (IMD), the entire country has a seen a 34 per cent fall in rainfall for the period between June 1 and July 9. The lack of rain is being felt most acutely in the granaries of Punjab and Haryana since the north west part of the country has seen a 50 per cent fall in monsoon. In central India, where soyabean, mazie and groundnuts are growth in plenty, the rainfall has been 162.4 mm, which is 37 per cent below normal. South India has been relatively untouched since it has rained 187.8 mm in the southern peninsula, 15 per cent below normal.
Met department data shows that the two states considered the granary of India, Punjab and Haryana, are seeing a 70 per cent and 67 per cent rainfall deficiency.
"We will need to press the panic button if the rains do not pick up in north west (part of India) in the next week," Akhilesh Guptqa, Director at the National Centre for Medium Range Weather Forecasting told NDTV. He added that he was not expecting that there would be a need to cut the long term average estimate of 93 per cent for the monsoon.
The index of industrial production (IIP) figures showed a surprise jump for the month of May, hinting that the economy was probably turning around. Indian industry grew at 2.7 per cent against the expectation of 1.4 per cent. However, the cheer was dampened because capital good sector registered a contraction, leaving some doubt in the minds of economists.
Kharif crop sowing season starts in June and the sowing season gets over by the end of July. The Indian government is closely monitoring the sowing that is taking place in south and western parts of India, where the rainfall has been better.
For example, paddy is planted from 2nd-3rd week of July once the paddy crop is about 6 inches high. The seed has not been sowed in most of the regions. As a result, experts estimate that the yield per acre for rice is expected to go down by 50 per cent. If the situation does not improve in the next 3 weeks, then the yields could go down by 70 per cent.
The impact of the lack of rain is clearly being felt on the spot prices of agri commodities and vegetables at Mumbai's wholesale market. Spot prices have risen sharply over the last week with prices for pulses up 20 per cent, wheat 30 per cent, rice 36 per cent, onions 60 per cent and tomatoes 100 per cent. Traders are not willing to enter into long term contracts since they are expecting prices to harden further. As of now, India has a buffer stock of 56 million tons of foodgrain.
The availability of foodgrain is hardly a problem, though. Wheat and rice procurement for the year has been at record levels. Wheat and rice has had a bumper production and the Indian government has carried out record procurement of both the commodities this year. That was quite evident in the prices too. Prices on the NCDEX for wheat fell to Rs.940/quintal against the the government-mandated minimum support price of Rs 1080/quintal.
That trend may have been reversed. And that has ominous signs for inflation too.
Primary food articles have a weightage of approximately 15 per cent on the wholesale price index (WPI) while manufactured food products have nearly 11 per cent weightage on the WPI. Various brokerages have indicated that their inflation target for 2009 end is between five and eight per cent.
The government will now have to wait till July 22, when the sowing data up to July 15 will be available to take stock of the situation finally.
Clearly, while the stock markets have been talking of green shoots, the farmers can't see any.
