Shrivelled paddy, wilted gram signal a lousy harvest ahead

Farmers in Karnataka, Andhra Pradesh, Telangana and Tamil Nadu have reportedly been witnessing wilting in Bengal gram (chana) and shrivelling of paddy and cobs in maize. Paddy farmers are reportedly facing drying of the crop in a few districts of Andhra Pradesh and Telangana surrounded by the Krishna belt. Similarly, poor cob formation with low grain weight has been observed in maize.

 

“Gram prices are expected to witness a rise on-year owing to an upswing in pulse prices for the year amidst lower production of Kharif pulses," said Pushan Sharma, director-research, CRISIL Market Intelligence and Analytics. “However, in the near term, prices are expected to fall when the arrivals peak in the market, which reportedly has been delayed due to the resowing of the crop in Maharashtra following November rainfall." Sharma added that in the northern states, gram yields are likely to remain at normal levels.

Chana prices in key mandis of Indore in Madhya Pradesh are quoted in the range of ₹5,900-7,500 a quintal, depending on the variety, against the minimum support price (MSP) of ₹5,440. All-India average chana dal prices on Tuesday were at ₹83.5 a kg, up 16.7% from a year ago, according to spot traders and the consumer affairs ministry.

Paddy and maize prices are also expected to rise. Already, at ₹44.7 a kg on Tuesday, all-India average price of rice in the retail market was 13.1% higher than the corresponding period last year.

“As far as cereals are concerned, paddy and maize output are anticipated to be lower on account of the decline in acreages in Andra Pradesh, Karnataka West Bengal and Bihar owing to lower water availability," Sharma said. “Prices of these two commodities are anticipated to rise in the short term because of lower production and may stabilize if Kharif receives bountiful rainfall, which may increase the acreages."

Queries sent to the agriculture, consumer affairs, food and public distribution remained unanswered at press time.

Rabi crops are being hit by falling water levels in India’s 150 major reservoirs, which stood at 35% as of 4 April, Central Water Commission data showed. The available water level, at 61.8 billion cubic metre (BCM), was 17% lower than a year ago, and 2% below the average of the past 10 years.

Falling water reservoir level raises concerns not only about the water crisis in central and southern cities and hydropower generation, but also the upcoming summer crop sowing cycle in irrigated areas, which may weigh on the gross value added (GVA) growth of agriculture and allied sectors, according to farm economists.

“The low reservoir level is likely to increase the dependency of summer crops on rainfall. This may delay crop sowing in irrigated areas," said Devendra Pant, chief economist at India Ratings. “Despite an increase in irrigation intensity, Indian agriculture has high dependence on rainfall. This is evident from agriculture GVA growth in the December quarter of 2023-24."

GVA of agriculture and allied sectors contracted 0.8% in the October-December quarter from 1.6% growth seen in the previous quarter. This was the first time in 19 quarters that farm GVA saw a decline. The growth rate was 5.2% in the year-ago period. In FY23, agriculture GVA growth stood at 4.7%, while in the first quarter of the current financial year, it was recorded at 3.5%.

Sharma, too, expects the sowing of the summer crop or Kharif to be impacted. “Summer crop sowing, which largely comprises cereals like bajra and maize, pulses like moong, and vegetables like cucurbits and melons, are expected to be negatively impacted following lower reservoir levels across key states like UP, Bihar, West Bengal, Chhattisgarh, Andhra Pradesh, Karnataka and Tamil Nadu," Sharma said.

In the case of wheat and mustard, which account for around 60% of the rabi acreage, agriculture experts agree that yields may be hurt in some states like Uttar Pradesh and Bihar due to lower reservoir levels coupled with high temperature. Wheat productivity may shrink in Punjab, Haryana, Rajasthan, western Uttar Pradesh, parts of Madhya Pradesh and Gujarat because of unseasonal rainfall and hailstorms. However, the overall output of these two crops is expected to be higher than the previous year.

“In rabi, wheat is the main crop; wheat harvesting is going on; we received rainfall but not enough to have a significant impact on overall crop output," Pant said. “It may have an impact where temperature is higher... since the Kharif sowing in some parts was delayed, rabi was also delayed, and depending upon the duration of the crop, whether it is 80 or 90 days, the crop is at various stages of harvesting. The temperature has started rising, but it is unlikely to have a significant impact on rabi production going forward."

The government estimates wheat production to be 112 million tonnes (mt) in the 2024-25 marketing season against last year’s 110.55 mt while the industry estimates it at 105.7 mt compared to 102.9 mt the previous year.

The good news is that despite the troubles, experts expect wheat and mustard prices to actually fall. “For both wheat and mustard, prices are likely to fall owing to higher production and sufficient domestic supply amidst an expected continued ban on exports of wheat and higher production of mustard for the third consecutive year," said Sharma.

For the past year, the government has been taking preventative measures to tackle food inflation, including export curbs on rice and sugar and retail interventions such as the introduction of Bharat atta, Bharat chawal and Bharat Dal, after lower rainfall caused by the El Nino weather phenomenon, resulting in drought and prolonged dry spells in Asia as the Pacific Ocean warmed.

While wheat (desi variety) prices in the key mandis of Madhya Pradesh are currently hovering in the range of ₹2,400-2,450 per quintal against the MSP of ₹2,275, prices of mustard in Delhi market were quoted at ₹5,200-5,250 per quintal compared to the MSP of ₹5,650, spot traders said. All-India average mustard oil and atta (wheat flour) prices in the retail market on Monday were at ₹135.6 a litre, down 11% year-on-year, and ₹35.8 per kg, 4.3% higher than the previous year, data from consumer affairs ministry showed.

Meanwhile, the official weather forecast said most regions will witness above-normal temperature in April-June, with central and western peninsular regions witnessing the worst of heat waves. However, southwest monsoon may be normal to above normal, it said.

India's retail inflation marginally decreased to 5.09% in February from 5.1% in January — still above the central bank's 4% target. The period saw food and beverage prices surge above 7% for the fourth consecutive month.