USDA sees fall in India's rice output, exports this year
New Delhi: India's rice output is likely to decline to 103 million tonnes in 2013-14 on crop damage and exports are also expected to be lower at 10 million tonnes, a latest USDA report says.
The likely crop damage has pushed up domestic rice prices strongly in November and this has been a major concern for the government, which may liquidate rice stock in the local market to check prices ahead of general elections, it said.
The US Department of Agriculture (USDA) said: "Rice production has been lowered to 103 million tonnes (from 105 million tonnes) as the recent cyclones in the eastern coast and heavy rains have damaged the standing rice crop, which was at maturity and harvest stage, in eastern and southern states."
Harvesting in the rain-affected areas have been significantly delayed as the mechanical harvesters are unable to operate due to wet soil conditions, it said.
Although no official assessment of crop loss due to the recent cyclones and heavy rains is available, market sources report crop loss in the affected areas of around 3 million tonne, it added.
Despite some drop, India's rice output would be it third highest crop ever, it said. The country had achieved an all-time output of 105.30 million tonne in 2011-12 and the second highest crop of 104.40 million tonne in 2012-13.
On impact of likely output fall on prices, the USDA said: "Domestic rice prices have gained strongly in November on reports of crop damage in Andhra Pradesh and other eastern state. Rising domestic rice prices over the last few months has been a major concern for the government."
"With the Parliamentary elections due in next five months, the government may liquidate its 'more than sufficient rice stocks' to contain any further increase in domestic prices," it said.
Prices of common variety rice in India rose to Rs 29,000 per tonne level last month, from the below Rs 24,000 per tonne in the same period last year, USDA data showed.
On rice exports, the USDA said the outbound shipments are expected to decline to 10 million tonnes in the 2013-14 marketing year (October-September), from the estimated 10.9 million tonnes last year.
Noting that sowing of rabi (winter) rice, has started and will continue through December, the USDA said, "Assuming normal weather conditions, higher rabi rice production is likely to partially offset the recent crop loss."
Planting of rabi rice, mostly confined to West Bengal and southern states, is likely to be higher than last year on improved soil moisture, augmented water levels in irrigation reservoirs and relatively firm domestic prices, it said.
Since early October, three consecutive cyclones -- Phaillin, Helen and Lehar -- on the eastern coast have caused significant damage to the rice crop in the coastal belt of Andhra Pradesh and Odisha.
Also, the consequent heavy rains in the eastern states of West Bengal, Bihar, Jharkhand and eastern Uttar Pradesh have caused some crop lodging, it added.