Crucial rain to drench India's drought-hit crop regions

The monsoon, which accounts for 70 per cent of India's annual rainfall, may advance to the main cotton, sugar and coffee-growing areas this week, drenching regions parched by the worst drought in four decades.

Rains will cover all of Maharashtra state, the country's second-biggest grower of sugar cane, cotton and soybeans, by June 10 after having advanced through the southern coastal states of Karnataka, Tamil Nadu and parts of Andhra Pradesh, said DS Pai, head of the long-range forecasting division at the India Meteorological Department. Karnataka is the largest coffee producer, while Andhra Pradesh is the top rice grower.

A normal monsoon is critical to boosting harvests of rice, corn, soybeans, sugar cane and cotton, as well as curbing retail inflation that hovers at about 10 per cent. Agriculture accounts for about a fifth of India's economy, while 55 per cent of the farmland does not have access to irrigation.

"The monsoon is progressing as per expectations and will help major crops such as rice, cotton, lentils and sugar cane," said Harish Galipelli, head of commodity and currency derivatives at JRG Wealth Management. "The rains were delayed last year, which affected yields. A good crop will help ease consumer prices of food commodities across the board."

Parts of Maharashtra and Karnataka, which together account for 45 per cent of the country's total output, have faced drought because of below-average monsoon rains in the past two years.

Monsoon rainfall during the four months through September may be 98 per cent of a 50-year average this year, a level considered normal, according to the weather department. The precipitation was 8 per cent below average last year and reduced water available to irrigate crops in Maharashtra, Gujarat and Karnataka, cutting cotton and sugar cane harvests.

A good monsoon may boost prospects for a bumper food grain harvest in 2013-2014 and output may surpass the 255.4 million metric tonnes a year earlier, the agriculture ministry said on Monday. Farmers planted rice, cotton and other monsoon-sown crops in 6.48 million hectares so far this year, the ministry said on May 31.

* Bloomberg News