Report Highlights:

Post's MY 2015/16 milled rice production forecast has been lowered to 103 MMT from a projected harvested area of 43.2 million hectares on moisture stress due to weak monsoon rains in August-September. MY 2015/16 corn production is forecast lower at 22.5 MMT

General Information:

Deficient 2015 Monsoon Rains in September, Reservoir Levels Dip

The withdrawal of 2015 southwest monsoon began from northwest India in the first week of September, nearly two weeks earlier than last year. Monsoon remained weak during September wherein most parts of the country experienced a prolonged dry spell from last week of August through middle of September. Monsoon precipitation recovered in the third week of September providing some relief to the moisture stressed standing crops, but has since then weakened again. According to the Indian Meteorological Department (IMD), India's cumulative precipitation from June through September 28 was 14 percent below the seasonal long-term average. The rainfall was reported normal in only 19 weather subdivisions, and deficient in the remaining 17 sub-divisions, to include agriculturally important states of Punjab, Haryana, Uttar Pradesh, Bihar, Maharashtra, Telangana and parts of Gujarat, Madhya Pradesh and Karnataka.

The Central Water Commission (CWC) monitors the storage of 91 major reservoirs having capacity of 157.8 billion cubic meters (BCM), which is about 74% of total reservoir capacity of the country. The CWC estimated water stocks in the 91 reservoirs on September 10, 2015, at 93.28 BCM compared to 120.06 BCM same time last year, down over 22 percent. During a typical year, monsoon withdraws from central and eastern India by mid-October, which is likely to further affect the reservoir levels. Back to back 'below-normal' 2014 and 2015 is also likely to adversely affect the ground water table in most parts of the country.

… Kharif Planting Stagger On

Planting of kharif (fall harvested) crops have faltered in August/September due to weak monsoon precipitation. The MY 2015/16 kharif season grains include rice, coarse grains (corn, sorghum, millet), and pulses (pigeon pea, mung beans, black matpe).

Due to the periodic dry spells and overall deficient rains in August and September, the kharif crops in most states are facing moisture stress, particularly in the unirrigated areas (55 percent of net cultivated areas). Market sources expect crop loss to rice, corn and other coarse grains in the eastern states (Uttar Pradesh, Bihar and Jharkhand) and peninsular India (Maharashtra, Telangana and Karnataka). Besides affecting the soil moisture availability to the standing kharif (fall harvested) crops, the faltering 2015 monsoon is also likely to affect the soil moisture and irrigation water availability for the upcoming rabi (winter planted) crops.

Government Forecasts Lower MY 2015/16 Kharif Harvest

The MoA released its First Advance Estimates of Food Grain Production for the Indian Crop Year (ICY) 2015/16 (July-June), pegging India's kharif grain production at 124.1 million metric tons (MMT), more than two million tons lower than last year, and seven MMT lower than the government's production target set at the beginning of the season. The MoA estimates Kharif rice production at 90.6 MMT (vs. 90.9 MMT last year), corn at 15.5 MMT (vs. 16.4 MMT), sorghum at 1.9 MMT (vs 2 MMT) and millet at 10.5 MMT (vs. 11.4 MMT). Market sources report that the first advance estimates are largely based on the planting conditions and are likely to be revised later based on the crop progress and harvest reports.

RICE

Commodity, Rice Milled PSD

Area in thousand hectares, quantity in thousand metric tons and yield in MT per hectare.

Rice, Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

India

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

43,940

44,136

43,000

43,000

44,000

43,200

Beginning Stocks

25,440

25,440

22,651

22,650

16,700

16,500

Milled Production

106,540

106,646

104,800

104,800

104,000

103,000

Rough Production

159,826

159,985

157,216

157,216

156,016

154,515

Milling Rate (.9999)

6,666

6,666

6,666

6,666

6,666

6,666

MY Imports

0

0

0

0

0

0

TY Imports

0

0

0

0

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

131,980

132,086

127,451

127,450

120,700

119,500

MY Exports

10,149

10,149

11,500

11,700

9,000

9,000

TY Exports

10,907

10,907

11,500

11,500

9,500

9,000

Consumption and Residual

99,180

99,287

99,251

99,250

99,200

99,000

Ending Stocks

22,651

22,650

16,700

16,500

12,500

11,500

Total Distribution

131,980

132,086

127,451

127,450

120,700

119,500

Yield (Rough)

3.6374

3.6248

3.6562

3.6562

3.5458

3.5767

Production

Due to the weak 2015 monsoon rains during August and September, Post's MY 2015/16 milled rice production forecast has been lowered to 103 MMT from 43.2 million hectares. Overall rice productivity of kharif season rice in the largely unirrigated eastern and (Uttar Pradesh, Bihar, and Jharkhand) and peninsular (Maharashtra, Karnataka, Telangana and Tamil Nadu) is likely to be adversely affected by prolonged dry spells at the critical tillering and panicle initiation stages. Back to back deficient 2014 and 2015 monsoons is also likely to affect planting and production prospects for upcoming rabi season rice in the states of Andhra Pradesh, Telangana, Orissa, Karnataka and Tamil Nadu.

Despite the slowdown in rice planting in August and September, the MoA estimates rice area planted through September 24, 2015, at 37.4 million hectares, nearly same as last year but higher than the normal (5-year average) planting for the corresponding period.

About 58 percent of the rice crop is irrigated, of which only half is under assured irrigation (ground water and irrigation catchment areas). Consequently, most of the rice growing areas are dependent on monsoon rains, either directly or through runoff canal and reservoirs for irrigation. The rice crops in largely irrigated rice growing states of Punjab, Haryana and West Uttar Pradesh are currently doing well under assured irrigation facilities. However, field reports from the largely unirrigated rice growing central, southern and eastern states indicates that after favorable planting conditions in July, the periodic dry spells in August-September has affected the crop tillering and panicle initiation in several areas. Although sufficient rains during third week of September supported the standing crop, the crop continues to face moisture stress in many areas with the recent weakening of monsoon. Consequently, overall rice yield in MY 2015/16 is likely to be lower than last year.

With planting of some rice to continue through end September in some parts of east and south India, MY 2015/16 kharif rice planting is estimated to reach 39.2 million hectares, slightly lower than initially expected (39.5 million hectares). Deficient monsoon and lower reservoir levels in the southern states may lower rabi rice planting to 4.0 million hectares compared to the initial forecast (4.5 million hectares).

Consequently, Post estimates MY 2015/16 rice production at 103 MMT (vs. 104.8 MMT last year), which includes 90 MMT kharif rice (vs. 90.9 MMT) and 13 MMT rabi rice (vs. 13.9 MMT). However, early withdrawal of 2015 monsoon in October and cyclones in October/November in eastern coast could further affect the current production forecast.

Based on the latest published final state-wise area and production estimates by MoA, MY 2013/14 rice production is revised marginally higher to 106.6 MMT and planted area to 44.1 million hectares. The state-wise planting estimates are compiled by revenue officials and are typically at variance with the figures compiled by the state department of agriculture

Trade

Post continues to estimate MY 2014/15 rice exports at a record 11.7 MMT based on the current pace of monthly exports.

According to the available preliminary trade estimates, MY 2014/15 rice exports through August 2015 are estimated at 10.9 MMT. Although the export estimates for September are not available, market sources report that at least 800,000 MT of rice will be exported during the month, which is likely to raise MY 2014/15 exports to a record 11.7 MMT. Assuming no major changes in the international market and Indian export policy, MY 2015/16 rice export is forecast at 9.0 MMT, lower than previous year record exports due to forecast tight domestic supplies.

Stocks

Based on the latest position on the government held rice stocks, Post estimates MY 2014/15 ending stocks at 16.5 MMT. MY 2015/16 ending stocks have been revised lower to 11.5 MMT to reflect the relatively tight domestic supplies.

Government held rice stocks on September 1, 2015 are officially estimated at 16.3 MMT, about 5.5 MMT lower than last year level, which is likely to come down to 12.0 MMT on October 1, 2015, assuming normal procurement and offtake of government rice in September. Consequently, MY 2014/15 ending stocks are estimated at 16.5 MMT (12 MMT government rice and 4.5 MMT rice stocks with private trade) compared to 22.7 MMT last year (17.6 government and 5.1 private).

Consumption

MY 2013/14 and 2015/16 consumption estimates have been revised marginally to reflect the other changes in the PSD.

CORN

India: Commodity, Corn PSD

Area in thousand hectares, quantity in thousand metric tons and yield in MT/hectare

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Nov 2013

Nov 2014

Nov 2015

India

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

9,430

9,066

9,300

9,300

9,200

9,000

Beginning Stocks

651

651

1,447

1,447

2,127

2,027

Production

24,260

24,260

23,670

23,670

23,500

22,500

MY Imports

7

7

10

10

50

50

TY Imports

11

11

10

10

50

50

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

24,918

24,918

25,127

25,127

25,677

24,577

MY Exports

3,871

3,871

1,000

1,100

2,000

2,000

TY Exports

3,889

3,889

1,000

1,100

2,000

2,000

Feed and Residual

10,600

10,600

12,500

12,500

12,800

12,500

FSI Consumption

9,000

9,000

9,500

9,500

9,500

9,500

Total Consumption

19,600

19,600

22,000

22,000

22,300

22,000

Ending Stocks

1,447

1,447

2,127

2,027

1,377

577

Total Distribution

24,918

24,918

25,127

25,127

25,677

24,577

Yield

2.5726

2.6759

2.5452

2.5452

2.5543

2.5000

Production

Despite higher planting of kharif corn, Post's MY 2015/16 corn production forecast is revised lower to 22.5 MMT on expected lower yields and planting of rabi corn. Sufficient early monsoon rains supported timely and higher planting of kharif corn, with overall planting as of September 24, 2015, estimated at 7.7 million hectares compared to 7.6 million hectares same time last year. However, deficient monsoon rains during August-September characterized by periodic dry spells in the major corn growing states of Maharashtra, Karnataka, Telangana and Andhra Pradesh have affected the crop at critical reproductive stages (tasseling, silking, milking and seed setting). Consequently, overall yields are likely to be lower than last year due to the moisture stress at critical stages. Soil moisture stress and lower irrigation water availability is also likely to reduce rabi corn planting and production prospects, particularly in the peninsular states. Consequently, Post estimates MY 2015/16 production at 22.5 MMT (vs. 23.7 MMT last year, which include 15.5 MMT kharif corn (vs 16.4 MMT) and 7 MMT rabi corn (vs 7.3 MMT). However, continued dry spell in October-November may further adversely affect the production prospects.

Based on the latest published final state-wise area and production estimates by MoA, MY 2013/14 corn planting is revised lower to 9.1 million hectares.

Exports

Post's MY 2014/15 corn export is estimated marginally higher at 1.1 MMT based on the latest available monthly export figures.

According to the available preliminary trade estimates, MY 2014/15 corn exports through August 2015 are estimated at 960,000 MT, with the exports tapering down further since June. At the current pace of monthly exports, MY 2014/15 corn exports are likely to touch 1.1 MMT.

Stocks

MY 2014/15 and 2015/16 ending stocks have been revised lower to reflect the change in MY 2014/15 exports and MY 2015/16 production.

WHEAT

India: Commodity, Wheat PSD

Area in thousand hectares, quantity in thousand metric tons and yield in MT/hectare

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Apr 2013

Apr 2014

Apr 2015

India

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

30,000

30,000

31,530

30,473

30,600

30,600

Beginning Stocks

24,200

24,200

17,830

17,830

17,200

17,200

Production

93,510

93,510

95,850

95,850

88,940

88,940

MY Imports

25

25

52

52

800

800

TY Imports

22

22

263

262

800

800

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

117,735

117,735

113,732

113,732

106,940

106,940

MY Exports

6,053

6,053

3,402

3,402

300

500

TY Exports

5,354

5,354

1,694

1,700

300

500

Feed and Residual

4,800

4,800

4,500

4,500

4,800

4,800

FSI Consumption

89,052

89,052

88,630

88,630

89,940

89,740

Total Consumption

93,852

93,852

93,130

93,130

94,740

94,540

Ending Stocks

17,830

17,830

17,200

17,200

11,900

11,900

Total Distribution

117,735

117,735

113,732

113,732

106,940

106,940

Yield

3.1170

3.1170

3.0400

3.1454

2.9065

2.9065

Post's MY 2015/16 wheat export is estimated higher at 500,000 MT based on the higher than anticipated pace of exports till date. According to the available preliminary trade estimates, MY 2015/16 wheat exports through August 2015 are estimated at about 260,000 MT, with most exports to neighboring Nepal and Bangladesh. With the pace of monthly exports likely to taper down in the coming months, MY 2015/16 wheat exports are likely to touch 500,000 MT.

MY 2015/16 consumption is revised lower to 94.5 MMT to reflect the change in export estimate.

MY 2014/15 wheat area is also revised lower to 30.5 million hectares based on the latest published final state-wise area and production estimates by MoA.