Grains output seen only slightly up despite ample rain

By Ratnajyoti Dutta

NEW DELHI (Reuters) - India's summer-sown grains output could rise only a little due to patchy rains but overall an above average monsoon will help boost output of other crops, helping curb food price inflation.

Monsoon rains covered all of India almost a month ahead of schedule, but were below average in rice growing areas of eastern states Bihar, Jharkhand, West Bengal and Odisha.

The output of summer-sown grains is expected to rise 0.9 percent to 129.32 million tonnes in the crop year that began in July, government sources said.

A marginal increase was due to better production estimates for pulses and oilseeds though there would a small fall in the rice harvest, said the sources, who did not wish to be named as Farm Minister Sharad Pawar is scheduled to release this year's official farm output numbers on Tuesday.

Farmers in India plant rice, corn, cane, cotton, soybean in the rainy months of June and July. Harvests start from October.

The output of summer-planted rice in the 2013/14 season is seen marginally lower at 92.32 million tonnes against 92.76 million tonnes in the previous year.

"Rainfall was patchy in key rice growing eastern states like West Bengal and Odisha at the start of the season. It affected transplanting. Heavy rainfall in some areas in August also dampened yields," said Nalini Rao, an analyst with India Infoline, a brokerage.

Monsoon rains irrigate 55 percent of farmland in India, one of the world's biggest producers and consumers of rice, sugar, soybean, edible oils and cotton.

Analysts said a marginal fall in rice output is not a matter for concern as the government is sitting on huge stocks of the grain.

"A slight fall is rather good news for the government which has been grappling with storage problems. In terms of availability, India has more than ample stocks," said Tejinder Narang, advisor of Emmsons India Ltd, a trading company.

On September 1, India's rice stocks at government warehouses were 21 million tonnes against a target of 9.8 million tonnes.

Bumper harvests since 2007 have led to massive stocks of rice and wheat, forcing the government to store food in open fields where stocks are exposed to rains and rodents.

Massive stocks have made it easier for the government to implement a $20 billion plan to give ultra cheap rice and wheat to 67 percent of India's 1.2 billion people.

Patches of heavy rains in the second half of the rainy season prompted some fears of vegetable crop damage in south, central and western India and stalled planting of onions, pushing food inflation to a three year high level in August.

CONSERVATIVE ESTIMATE

The government updates its forecast as it gathers information about crop planting.

"It is the first estimate for the 2013/14 crop year and it is a conservative estimate which should be revised upwards as harvests progress," said another government official who did not wish to be named as he is not authorised to talk to the media.

Any fall in rice output could be compensated in the winter season which begins from October, Narang said.

Growers plant summer-sown rice from June, while the winter-planted variety is transplanted from October.

(Additional reporting by Rajendra Jadhav; editing by Mayank Bhardwaj and William Hardy)

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