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Deficit North-East monsoon adversely affects rice and pulses production; prices may rally

by Sakthi Prasad , Content Manager

17 January 2017

Govindarajan Parthasarathy, Senior Research Analyst -- Agro

North-East monsoon adversely affects rice and pulses production

The North-East Monsoon that occurs between October and December has withdrawn with a deficit, falling short of the projected 90-100 percent of the long period average (LPA). The Seasonal rainfall occurs over the southern peninsular region comprising Tamil Nadu, coastal Andhra Pradesh, Rayalaseema, Kerala and South interior Karnataka.

The deficit averages 60-70 percent in all regions, with 62 percent for Tamil Nadu, 61 percent percent for Kerala, 67 percent for Coastal Andhra Pradesh, 70 percent for South Interior Karnataka and 66 percent for Rayalaseema.

Tamil Nadu is the most adversely affected region as the state receives 48 percent of total rainfall during this period. Overall, Tamil Nadu reservoirs are 82 percent short of normal levels. Those in Andhra Pradesh, Karnataka and Kerala are 53 percent, 39 percent and 37 percent short respectively.

Rice is the major crop affected as a result of the monsoon deficit, with the bulk of the crop being produced in Tamil Nadu. Pulses have also been adversely affected to a great extent, whereas spices have suffered relatively minor impact of the monsoon deficit. India is not a major global producer of coarse grains, coffee and corn, and hence does not have a significant impact on global oilseed trends.

The shortage in local rice production could lead to an increase in imports. Higher import demand from India could cause export prices to trend upwards. Since India is the global leader in pulses, prices are likely to trend upwards for this commodity as well. Spices have not been greatly affected by the monsoon deficit and hence are likely to show regular pricing trends. India is not a significant global player for the other crops and hence, global prices of these crops could remain unaffected by the monsoon deficit.

Crop	Market Size in World %	Rank		Crop Prospects	Implications on Crops
Rice	3%	7	Tamil Nadu		Paddy acreage in Tamil Nadu, the worst affected state in terms of rainfall deficit, has fallen by 39% in 2016-17 rabi season to 0.718 mha as compared to 1.182 mha in the same period last year
			Andhra Pradesh
			Andhra Pradesh		Rice acreage has declined by 15% to 0.32 mha in the 2016/17 rabi season in comparison to 0.377 mha in the previous year
			Kerala		The rice bowls of Palakkad and Thiruvananthapuram districts are the most impacted by monsoon deficit, with 7,027 ha and 4,71,4 ha of farmland affected respectively
			Karnataka		The deficit in north-east monsoon has reduced rice acreage in the state
Pulses	35%	1	Tamil Nadu		Pulses acreage in Tamil Nadu has fallen by 11.7% in 2016-17 rabi season to 0.348 mha as compared to 0.394 mha in the same period last year
			Andhra Pradesh		Pulses acreage declined to 0.764 mha, a decline of 18.4% as compared to 0.936 mha in the previous year
			Karnataka		Pulses acreage is also reported to have declined in Karnataka
Coarse Grains	3.2%	4	Tamil Nadu		Acreage of coarse grains also declined in the state by 16.1% from 0.423 mha in the previous year to 0.355 mha this year
Coarse Grains	3.2%	4	Andhra Pradesh		Area under coarse grains fell to 0.169 mha, a decline of 22.8% as compared to 0.219 mha in the previous year
Oilseeds	6-7%	2	Andhra Pradesh		Area under oilseeds is 68,000 ha, which is reported to be lower than the previous year
Spices	32% (Cardamom) 18% (Pepper)	2	Kerala		2016/17 Cardamom output is estimated to be 12,000-15,000 MT which is 40% lesser than the figure of 30,000 MT in 2015/16. The pepper crop in Wayanad district of Kerala, the second main growing region is estimated at 2,000-2,500 MT, with vines impacted by deficient rains
Coffee	3.3%	7	Karnataka		Karnataka accounts for 72% of coffee production in India. Due to poor monsoon, production is likely to decline in Chikmagaluru , Kodagu and Hassan districts of the state, which reduce the country’s arabica and robusta coffee outputs by 7% and 9.8% as compared to the previous year
Corn	2.4%	7	Tamil Nadu		It is reported that 8,230 ha out of a total acreage of 9,869 ha has been affected by the poor monsoon