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Sep 20, 2011, 04.37 PM IST | Source: Reuters

South Asia floods spare crops but Pakistan cotton hit

Seasonal floods across South Asia have largely spared summer crops this year, helping meet output targets for key rice and cane harvests, but Pakistan could import more cotton after losing about two million bales of the fibre to rains.

South Asia floods spare crops but Pakistan cotton hit

Seasonal floods across South Asia have largely spared summer crops this year, helping meet output targets for key rice and cane harvests, but Pakistan could import more cotton after losing about two million bales of the fibre to rains.

Shipments from a region that is among the world's top producers of grain, sugar and oilseeds will reduce price volatility and bring relief to several Asian governments trying to combat food-led inflation.

The news is good from India, the world's second-biggest producer of sugar and rice, as it heads for record output of grain, oilseeds and cotton in 2011/12, boosting chances of higher global supplies along with sugar.

Bangladesh, a leading consumer of rice, is not reporting any major crop damage either. And while rains have damaged some of the cotton crop in Pakistan, it expects bumper harvests of rice and cane, potentially cutting its need to import refined sugar.

"All of South Asia received healthy monsoon rains this year, except some cotton growing areas of Pakistan, where floods have hit productivity," said S. Raghuraman, a senior analyst with consulting firm Agriwatch.

"Well distributed monsoon rains in the region will keep food prices in check for at least six months."

Indian harvests

India's summer-sown rice output in the new season that began in July is expected to touch a record 87.10 million tonnes, up about 8% over the previous year, raising prospects of further exports of the grain.

The country's entry into the export market threatens to undercut supplies from Thailand and Vietnam, the world's No.1 and No. 2 rice exporters respectively, which have seen demand for their costlier supplies fall after India's food ministry allowed two million tonnes of exports of common grades of rice this month.

Indians annually consume around 90 million tonnes of rice.

The farm ministry will release three more forecasts for the 2011/12 crop year at regular intervals as plantings progress and official agencies gather more data. Indian farmers plant summer-sown crops during the rainy months of June and July.

As a result of consecutive bumper harvests and a three-year-old ban on exports of common grades, rice stocks at government warehouses totalled 22.7 million tonnes on Sept 1, substantially higher than a target of 9.8 million tonnes.

"There is no report of any damage to the rice crop due to floods throughout the country, except from some small pockets of eastern Orissa state," said Gurbachan Singh, farm commissioner.

"But this is unlikely to have any significant effect on the country's rice output which is expected to be at least 100 million tonnes in 2011/12," he said. The government rice output figure of 87.10 million tonnes in 2011/12 is provisional.

Pakistani cotton imports

Apart from rice, Indian cane output for 2011/12 is expected at 342.20 million tonnes, up from 339.2 million tonnes in 2010/11, helping the country produce 26 million tonnes of sugar, about 4 million tonnes more than domestic demand.

The government has permitted 1.5 million tonnes of unrestricted sugar exports, or sales under the Open General Licence scheme, so far in the season that ends this month.

A Reuters poll showed earlier this month India is likely to allow unrestricted exports of 2.8 million tonnes of sugar in 2011/12.

Indian cotton output is also headed for a record at 36.10 million bales against 33.4 million bales the previous year, a surplus much of which could head to neighbouring Pakistan where 2011/12 output of the fibre has been tamped down two million bales to 13 million tonnes in 2011/12 due to heavy rains.

"It will be too early to say actually how much damage has been done to cotton because water is still standing in the fields," Naseem Usman, chairman of the Cotton Brokers' Association, told Reuters. "But so far 2 to 2.2 million bales have been lost in the floods." A bale weighs 170 kg.

The Pakistani floods have left about 300,000 people homeless and damaged crops over 1.7 million acres of land in Sindh province, which provides about 22% of its total cane output and produces rice and cotton as well.

But the country hopes to meet rice and cane production targets on higher productivity, while it may need to import about 1.4 million bales to feed its textile mills.

"Last year, it seemed that Pakistan had to import a lot. But there was a big recession in the international market because of which our exports halted and we had to take the imported cotton as a carry-over stock," Ihsan-ul-Haq of Cotton Ginners Associations told Reuters.

The world's fifth largest rice exporter, Pakistan is also hoping to export up to 4.5 million tonnes of rice in the 2011/12 fiscal year, despite damage to some crop in Sindh.

Like rice, there has been some damage to the country's sugar crop but the excess rains have also helped save the crop from pest attacks.

Ibrahim Mughal, president of Agri Forum Pakistan, a national farmer association, said sugar output in 2011/12 was estimated at more than 4.5 million tonnes. If that is achieved, the country will not need to import any sugar next year.

The rice crop in Bangladesh is also looking good. It may need to import at most 500,000 tonnes of rice in the year to June 2012 on higher domestic stocks, said Ahmed Hossain Khan, director general of the state grain buyer.

Bangladesh produces around 33 million tonnes of rice, enough to feed its 160 million people, but it often needs to import due to natural disaster. Out of 500,000 tonnes, 100,000 tonnes of white rice will come from Vietnam under government deals and another 100,000 tonnes will be supplied by India.

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