NEW DELHI India's rice output for the year ending May 31 is likely to fall below the government's estimates, after a longer-than-expected rain season damaged crops in southern states and delayed sowing.
A drop in rice output, below the official estimate of 80.41 million metric tons, is likely to mean that food-price inflation will continue to rise despite the government's recent effort to contain it. Food prices in November were up 9.41% from a year earlier.
Prolonged rains in India's southern state of Andhra Pradesh, a top rice producer, have damaged crops on about one million hectares, according to Rachel Chatterjee, a senior official at Andhra Pradesh's agricultural department said Tuesday.
Before the rain season, the Andhra Pradesh government had estimated rice output for the year ending May 31 at 9.07 million metric tons.
Ms. Chatterjee said that of the state's 23 districts, 12 so far have reported damaged crops. "Rains have damaged mostly the rice crop, though other crops have been also damaged," she said, adding that the extent of damage to the rice crop is still being assessed.
Rice millers estimate that about 60% of the summer rice output also has been damaged. But India's federal government maintains figures for summer rice output which accounts for around 85% of annual production have remained unchanged.
Madan Sabnavis, chief economist at CARE rating agency, says output is likely to be lower than the state government's estimates but said the shortfall is unlikely to be significant.
India's grain output is closely tracked by traders world-wide as it is one of the few countries expecting surplus production. A shortfall in output is unlikely to push up global prices, but local prices are likely to rise as the government has been reluctant to release grains from overflowing stocks to meet its requirement for subsidized sales.
State-run Food Corp. of India, which buys food grains for the government's welfare programs, has bought 8.2% less rice so far in the marketing year that began Oct. 1.
