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Lower Indian rice crop could slow down exports

Hari Ramachandran in New Delhi

India's rice crop prospects have improved with the revival of monsoon rains in most growing areas, but an expected drop in yields from a year earlier could slow down exports, officials and analysts said on Monday.

They said the winter rice output would drop mainly because of sparse rains in July in the key producing northern Uttar Pradesh and central Chhattisgarh states, which were largely dependent on monsoon showers.

Output would also drop to some extent, due to dry weather in the past month, in Punjab and Haryana where most farmers use canal and tubewell water for irrigation, they said.

Analysts said a lower crop could also have an impact on India's rice exports.

"The crop is getting better because of the rains in August but lack of rainfall in July has hit the area under the crop," said B N Singh, director of the Central Rice Research Institute, based in Bhubaneswar.

Rice is also grown in Andhra Pradesh, Tamil Nadu, West Bengal, Orissa and Assam.

Singh estimated that the 2002-03 (July-June) rice crop would be five to six million tonnes lower from the previous year's 91.6 million tonnes (9.16 crore), provided the rain in the remaining months of the season was normal. The crop damage would be much more if the rains in September were erratic.

Singh said the area under winter rice crop in the country had come down by about two million hectares because of lack of rains in the previous month.

"There will be about five to 10 per cent shortfall in rice output which translates into between five and eight million tonnes," said G Chandrasekhar, commodities editor with the Hindu Business Line newspaper.

The June-September southwest monsoon rains arrived over the southern state of Kerala in early June and moved to western India, but its progress in July in most parts of the country was erratic, hitting rice, oilseeds and coarse cereals crops.

The monsoon is vital to India's economic health as agriculture accounts for 25 per cent of the country's gross domestic product and employs some 70 per cent of the more than one billion population.

The cumulative rainfall between June 1 and August 14 was 24 per cent lower than normal and, despite the revival of the monsoon, the country continues to feel the impact of its worst drought in more than 15 years.

LIFE-SAVING RAINS

Officials said the revival in the rains had saved the rice crop from wilting. Transplanting of rice, a highly water intensive crop, has been completed in most of the states.

The deputy director general of the Indian Council of Agricultural Research, S N Shukla, said a clear idea of the crop size would be known only by October, since some of the shortfall in winter crop could be made up in the summer season, if there was good soil moisture.

Analysts said a lower crop could also hit the country's rice exports, which had picked up this year after fresh demand emerged from Africa and Southeast Asia and prices turned competitive.

"The government will not ban rice exports, but could raise the price of rice sold to exporters to an extent that might render it uncompetitive," said Chandrasekhar.

Food Minister Sharad Yadav said last week the government would soon review the position of rice stocks in view of the decline expected in winter rice output.

As of July 1, India held rice stocks of about 22 million tonnes as against 22.75 million at the same time last year.

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