The country’s rice production is expected to fall this year as below-normal rainfall during the crop’s maturation period hits yields, said industry officials, according to Reuters. However, large rice stocks built up after several record harvests could help the country maintain exports.
India, the world’s largest rice producer and exporter, could see its production fall by around 10 million metric tonnes this year, according to industry officials.
This would mean a nearly 6.5% decline from last year’s record production of 154 million tonnes. It would also be the biggest fall in production since 2009-10, when an El Nino-induced drought affected the crop.
The prolonged dry spell in recent weeks has reduced yield potential in several southern and eastern states, said BV Krishna Rao, president of the Rice Exporters Association, the report mentioned.
The lower output could push up rice prices in the domestic market and make Indian exports more expensive. This comes at a time when rice prices are already rising in other major exporting countries, including Thailand and Vietnam.
India has received 15% less rainfall than normal since the four-month monsoon season began on June 1, according to weather department data.
The rainfall deficit is much higher in some rice-growing states, reaching as much as 42%.
The area under summer-sown rice stood at 42.68 million hectares as of September 11, nearly 4% lower than a year earlier, government data showed.
Summer-sown crops account for more than 80% of India’s total rice production, while winter-sown crops make up the rest.
The area under winter-sown rice could also decline as reservoir levels remain below normal, said Nitin Gupta, deputy country head at Olam Agri India.
Domestic rice prices have already started rising on expectations of lower production. This has pushed export prices to their highest level in more than a year.
Farmers growing premium rice varieties are also expected to receive higher prices in the open market. This could reduce the amount of rice they sell to the government.
Despite the expected fall in production, India is unlikely to face an immediate shortage for exports because of its large stockpiles.
India’s rice reserves, including unmilled paddy, stood at a record 59.6 million tonnes as of September 1.
That is far above the government’s target of 10.3 million tonnes by October 1.
The large stockpile means India should be able to continue exporting rice without imposing restrictions, according to a New Delhi-based dealer with a global trading house.
With these inventories providing a cushion, India could maintain exports at record levels even as lower production puts pressure on domestic prices.