Erratic monsoon may impact kharif output in certain pockets

The global food security has decreased for the second year in a row. The Global Food Security Index (GFSI) 2020 considers food security in the context of income and economic inequality, gender inequality, and environment and natural resources inequality. The ongoing COVID-19 pandemic has exacerbated its impact on food systems. The year 2020 marked the most severe increase in global food insecurity during the coronavirus pandemic. The ninth edition of GFSI, compiled by The Economist Intelligence Unit and sponsored by Corteva Agriscience shows the deteriorating condition of global food security across the world due to the changing climate and declining natural resources to future prosperity is based on 59 unique factors, considering the issues of food affordability, availability, quality and safety, and natural resources and resilience across 113 countries. Here is the list of world’s top 10 countries for food security as per the 2020 Global Food Security Index report.

Ruchi Agrawal
Moneycontrol Research

After a more-than a promising start this year, monsoon saw substantial slowdown in the last few weeks with western India expecting a rainfall deficit. According to Skymet, monsoon is now expected to recede with only a few showers in some pockets of northeast.

Given that the deficit situation has cropped up majorly in September and rainfall distribution remaining mixed regionally, the overall Kharif output is also expected to remain mixed. Decent reservoir levels, however, bode well for the upcoming Rabi sowing season.

Monsoon situation

According to latest data, the overall monsoon situation remains 10.3 percent below normal with the latest week’s rainfall being 55.2 percent below normal. Out of the 36 sub-divisions across India, till date, 24 received normal to excess rainfall and 12 regions have received deficient rainfall. While overall distribution seems more towards normal, there have been some deficits in west and southern India (excluding Kerala which received excess rainfall of 26 percent above normal).

The spell of deficient rainfall continues over the western belt mainly West Rajasthan, Gujarat and Saurashtra regions. Poor rainfall in the Gujarat and Saurashtra region is likely to affect the output of cotton, oilseeds and pulses from this region.

Sowing and acreages

Till September 20, overall sowing remained 0.6 percent above last year. Although rice and oil seeds sowing saw a slow start, the acreages seem to have improved now. However, pulses, coarse cereals, jute and mesta saw a noticeably reduced acreage. Cotton sowing declined by 0.9 percent. This could possibly be due to the pink bollworm issue which impacted crop production and quality substantially last year. Despite overproduction and crashing prices, sugarcane acreages increased 4.2 percent, further highlighting the skewed crop distribution due to populist government policies.

Though overall the sowing situation seems a tad positive, but it remains mixed across regions and crops. Gujarat State Agriculture Department has reduced the production and yield of kharif crops in its first advance estimate for 2018-19. The total food grains production in the state is expected to decline to 31.59 lakh tonnes from 32.16 lakh tonnes in previous year.

Reservoir levels

Overall, live reservoir levels are decent compared to last year and the long period average. Latest reservoir levels at 120.1 BCM (74 percent of total capacity) are higher than last year and long-term average levels. While reservoir levels in North and West part of the country remain lower than last year, East, Central and South India reservoir levels show a healthy growth YoY. Owing to the monsoon depression in the Bay of Bengal, live storage of the reservoirs in the eastern and central regions is expected to improve as the regions are to receive rainfall in the coming days. However, with monsoon season coming to an end, the reservoir situation in north the west may not show much improvement.

Healthy reservoir levels augur well for farm irrigation and power generation. This stands as a positive for Rabi sales of agrochemical companies. However, companies with major exposure in North and West might see some impact due to lower water levels.

Outlook

With the monsoon season reaching the last leg, much uncertainty is over. According to reports, next 10 days of rainfall would be crucial, post which any rain could be damaging for crops. We expect the Kharif output levels to get impacted in the southern and west regions owing to a deficit monsoon. Given the high concentration of cotton, oil seeds and coarse cereals in these regions, output for these crops is expected to get impacted.

Healthy reservoir levels in south, central and eastern regions show a good case for a healthy Rabi sowing in these areas, though north and west might see some impact. Reservoir levels are also the key input for hydropower generation, which might have similar region-wise trend.Follow @Ruchiagrawal

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