GIEWS Country Brief: India 18-February-2016

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  • Dry conditions cause reduction in 2016 Rabi season plantings

  • Poor monsoon rains lowered 2015 Kharif season cereal production

  • Total cereal exports forecast to decrease markedly in 2015/16 marketing year

  • Rice and wheat prices generally stable in January

Dry conditions cause reduction in 2016 Rabi season plantings

Planting of the 2016, mostly irrigated, Rabi (winter) crops, mainly wheat, was completed in January. Reduced water levels in major reservoirs, following weak monsoon precipitation, coupled with unseasonable high temperatures and below-average rains since October, associated with the ongoing El Niño event, reduced the area planted in major wheat producing states located in the north and northwest. Latest official estimates indicate that 29.3 million hectares were sown with wheat for the 2016 crop, 4 percent less than in the previous year. The recently released ‘’Second Advance Estimate’’ from the Ministry of Agriculture puts the 2016 wheat production at 93.8 million tonnes, 8 percent above last year’s reduced level but below 2014’s record output. This forecast assumes yields return closer to average after 2015’s low levels.

Similarly to wheat, reduced water availability hampered planting operations of the 2015 secondary (Rabi) rice crop. As a result, official estimates point to a 7 percent contraction in the area planted compared to the previous year. The final outcome of this season’s harvests will depend on the availability of water supplies for irrigation and rainfall in the coming weeks, which are critical for crop development.

Poor monsoon rains lowered 2015 Kharif season cereal production

Harvesting of the 2015 main Kharif season crops, including rice and maize, was completed in January. The latest official estimate puts 2015 Kharif rice production at 90.6 million tonnes (milled basis), marginally below the reduced level of 2014. The decrease results from a contraction in plantings, especially in southern and central producing states, due to below‑average monsoon rains. Including the forecast of the ongoing 2015 secondary (Rabi) crop, FAO tentatively forecasts the 2015 aggregate rice production (in paddy terms), at 155.4 million tonnes (103.6 million tonnes, milled basis), 2 percent below the reduced level in 2014.

Latest official estimates put the 2015 wheat production at 86.5 million tonnes, 10 percent below the previous year’s record level. The decrease is the result of heavy rains, coupled with strong winds and localized hail in March over the northern and central main wheat‑producing states, which damaged standing crops in the final stages of development.

The 2015 maize output is officially estimated to have decreased by 13 percent, compared to 2014’s good level, to 21 million tonnes. The decrease reflects lower yields, following delayed and below‑average monsoon rains.

Total cereal exports forecast to decrease markedly for second consecutive year in 2015/16

Cereal exports in the 2015/16 marketing year (April/March) are forecast to decrease markedly for the second consecutive year, falling to 12.5 million tonnes, some 27 percent down from 2014/15 and 25 percent below the average of the previous five years. Most of the decline reflects reduced wheat exports, which are forecast to decrease from 3.4 million tonnes to 1 million tonnes, mainly as result of lower 2015 output. Rice exports in calendar year 2016 are also forecast to decrease from last year’s high level. Maize exports are set to decrease by 33 percent to 800 000 tonnes, due to lower production coupled with increased domestic demand from the feed and starch industry. The decline in the exportable surplus is also attributed to strong domestic requirements under the National Food Security Act, which has been approved in 2013 and is currently under implementation in most states.

Rice and wheat prices generally stable in January

Retail prices of rice were stable in most markets in January, notwithstanding the progressive arrival of the 2015 main crop in the market, reflecting large ongoing Government procurement purchases. As of 12 January, the Food Corporation of India (FCI) and State Government Agencies had bought some 20.1 million tonnes of rice, compared to the 15.7 procured at the same time last year. Overall, rice prices were lower than their levels a year earlier.

Prices of wheat, another important staple, were stable in January, owing to the continued large release of Government’s supplies through the Open Market Sale Scheme (OMSS). As of 22 January 2016, a total quantity of 4.8 million tonnes were sold through the OMSS since the beginning of the 2015/16 marketing year (April/March), with particularly high volumes sold in most recent months.

Overall food security satisfactory

The overall food security situation in India is considered to be satisfactory, given ample food stocks and the provision of highly‑subsidized rice and wheat through distribution programmes, especially for the below‑poverty line families through the National Food Security Act (NFSA). Under the NFSA, about 75 percent of the rural and 50 percent of the urban population (nearly 800 million people) are entitled to receive subsidized food grains, including rice at INR 3 per kg, wheat at INR 2 per kg and coarse grains at INR 1 per kg. Additionally, the measure is providing free nutritious meals to pregnant women and children up to 14 years of age and entitlements of INR 6 000 (USD 91) per pregnancy to pregnant and lactating mothers. As of December 2015, the NFSA has been implemented in 25 States throughout India, from 11 during last year, with presently about 530 million people already benefiting from the highly subsidized food grains under NFSA. The implementation of the NFSA in the remaining 11 States/Union territories is likely to be complete by April 2016.