Good monsoon rains in India, as forecast by the weather office, will boost the country's farm output for the second straight year and prompt the government to allow unrestricted exports, industry officials said on Friday.
India's Meteorological Department predicted on Thursday a near normal monsoon during the June-September period. Good rains are vital to India's economic health, with the farm sector generating almost a quarter of its gross domestic product.
"It will become easier for the government to take a decision in favour of uninterrupted grain exports, as the stock situation may become comfortable after a good monsoon," D P Singh, chairman of the All India Grain Exporters' Association, told Reuters.
Last year, the country received the best monsoon rains in a decade. But the previous year was extremely bad, with several parts of the country facing a severe drought.
India, which entered the global grain market with a bang three years ago to clear its bulging stocks, has been less active over the past year.
It even stopped the sale of subsidised wheat and rice to exporters in August following a drop in its stocks.
Total grains stocks with government procurement agencies fell to 22.8 million tonnes on March 1 from 36.2 million tonnes a year before due to exports and domestic consumption.
India exported about six million tonnes of wheat and rice in the year to March.
Traders said a comfortable inventory of wheat and rice after two years of bumper crops would help India resume exports and emerge as a consistent and long-term player in the international market.
India's grains output in 2003/04 (July-June) is expected to rise to a record 212.2 million tonnes from 174.2 million tonnes in the previous year, while oilseeds output is set to jump to 24.98 million tonnes from 15.1 million tonnes.
Bountiful rains would bring cheer to farmers and ensure better crop yields, but the timing and the spread of rains during the crop maturity period would be very important, industry officials said.
"Normal rains will help in enlarging the area under soyabean cultivation," said Rajesh Agrawal, chairman of the Soyabean Processors Association of India, adding soyameal exports could rise following a jump in output.
"But the distribution of the rainfall will be a crucial factor. If the soyabean crop gets three to four good showers during the season, yields will be very good."
Sugar factories, which have been suffering due to scant rainfall in the cane-growing areas of Maharashtra and Tamale Nada last year, would be able to step up output after good rains.
Sugar output in India, which annually exports 1.5-2.0 million tonnes, is likely to drop about 23 percent to 15.5 million tonnes in the year to October.
"Export prospects will be better," said Vine Kumar, managing director of National Federation of Co-operative Sugar Factories.
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