Monsoon to enter lull phase next week: Sources

India's monsoon rains are likely to ease next week, sources in the state-run weather office said on Friday, raising concerns there could be a slowdown in planting of crops such as cane, rice, cotton and oilseeds.

India, one of the world's biggest producers and consumers of grains and sugar, relies on the June to September rains for 60% of its farms and failure of the monsoon can force it to import, sending international prices higher.

The India Meteorological Department on Tuesday lowered its estimates for the seasonal rains to be just below normal from expectations of a normal monsoon in April.

So far the rains have been above normal and were 23% above average in the past week, helping to fill reservoirs higher than last year and encouraging early planting of crops.

"Decreased rainfall activity is expected next week over the central region," said one of the sources.

Industry bodies Soyabean Processors' Association of India and Solvent Extractors' Association of India said rains were already delayed in some soybean growing parts of central India.

Sowing of oilseed crops such as soybean and groundnut has lagged due to below average rains in the western states of Maharashtra and Gujarat.

Oilseed acreage overall is 36% below last year currently, while lentils have been planted over 8% less area.

Any fall in oilseeds output could force India, the world's top cooking oil importer, to raise edible oil purchases, especially of cheaper palm oil from Indonesia and Malaysia.

"Delay in soybean planting reduces the maturity period and hits prospects of higher production ," said A. S. Chandel, a New Delhi-based soybean expert.

Sugar cane has already been planted over 5 percent more acreage than last year but any prolonged halt to rains could damage plant growth.

A reduction in farm output could also hit domestic prices, pushing up food inflation, which is already around 9 percent.

"If the weak phase gets stretched beyond two weeks in the main planting month of July, there will be a negative trigger in the market," said D.K. Joshi, chief economist at Crisil Rating.

A U.S. forecaster said the south-west monsoon could be weak over western India this year.

"We expect lower rainfall over oilseeds and cotton growing areas of western India," said Drew Lerner, senior meteorologist at the Kansas-based World Weather Inc.

Lerner said patchy monsoon rains could hit rice output in eastern parts of the country.

"We are not expecting higher rice production from India this year," he added.

India, the world's second-biggest rice grower, produced 94 million tonnes of the grain in the 2010/11 crop year, up 6 percent from the previous year when output was hit by the driest season in over three decades.

But rice prices are unlikely to surge as the government is holding massive stocks. India's rice inventory was 27.64 million tonnes on June 1 against a target of 17.1 million tonnes.