Poor rains globally may add to India's woes

As the monsoon situation in India turns gloomy, relying on foreign markets for imports might not be of much help, since India is not alone in facing the spectre of a drought.

Across the world -- the US, Russia, the Korean peninsula, Ukraine and Sri Lanka --deficient rainfall may hit agricultural output. This would exert pressure on the Centre if it wants to import large quantities of pulses and edible oils in the case of domestic shortage.

Though many of these countries do not export pulses and edible oils directly, a rise in commodity prices globally could hit India's ability to import large quantities at cheap rates.

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Officials say if the monsoon deficit in India remains at 15-20 per cent by July-end, there is little chance of a recovery.

"Rains in August and September would have to be much above normal to compensate for the loss. This is slightly difficult, as the intensity of rainfall over the Indian peninsular declines from August," said a senior official.

Though India Meteorological Department has forecast a revival in the southwest monsoon from July-end, most experts say it is unlikely this would help tackle the overall rainfall deficiency in the country.

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Till on Thursday, overall rainfall in India was about 22 per cent less than normal. A shortfall of more than 10 per cent during the four-month southwest monsoon season ending September is categorised as a period of drought.

The region affected the most this season was north India, where rainfall was about 37 per cent less than normal. For central India, it was 26 per cent below-normal, while in the southern peninsula, it was 24 per cent below-normal.

Globally, major corn, wheat, paddy and soybean-producing countries are also facing severe rainfall deficiency.

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On Wednesday, the US officially admitted the country was facing the worst drought in two and a half decades.

About 61 per cent of the country has been characterised as drought-hit. This would severely hit production of corn and soybean in that country.

Already, global corn prices have risen 38 per cent since June, while soybean prices rose 24 per cent.

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In Russia, a major grain producer, 16 of the country's 83 regions have been hit by drought this year.

In India, no region other than some parts of Karnataka has been declared drought-hit. However, officials said if the rainfall situation did not improve significantly by the first week of August, there was a possibility of 25-30 per cent of the country being hit by drought.

The government is already considering regulating the export of wheat, rice, sugar, cotton and onions to ensure domestic supplies.

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In 2009, when India recorded its weakest monsoon since 1972, the government had extended a ban on the export of sugar, rice and wheat.

However, as output rose, it has gradually eased the curbs. India now allows free export of wheat, rice, sugar, cotton and onion due to bumper harvests in 2010 and 2011.

Till last week, acreage under kharif crops was about 18 per cent less than normal, with coarse cereals, paddy, oilseeds and pulses being the worst affected.