SINGAPORE: June 16, 2008


SINGAPORE - The monsoon season, a lifeline of India's trillion-dollar economy, has progressed well, cheering farmers hoping for a good rice crop while giving the government an opportunity to ease restrictions on exports.


Farmers sow rice, soybean and groundnut in June during the monsoon, which lasts until September. The monsoon usually envelopes the entire country by July and provides the main source of water for agriculture that contributes about 17 percent to India's gross domestic product.

"News that monsoon is making good progress will help farmers sow more," said Anil K. Mittal, chairman and managing director of KRBL Ltd, a leading rice exporter.

"Higher rice production or indications of better production will help the government realise that it has some time to lift restrictions on rice exports," he said.

India, the world's biggest rice exporter after Thailand in 2007, banned exports of non-basmati rice and has slapped an export tax of US$200 per tonne on the aromatic basmati variety to curb overseas sales as inflation hit a 3- year high.

Rice prices on the Chicago Board of Trade struck a record high of more than US$25 per hundredweight in late April on fears about a tight global supply following export curbs by India and Vietnam.

But India expects its rice harvest to rise by 2 million tonnes next year due to the use of better seeds, adding to current production of 92 million tonnes. In other commodities growing countries, the La Nina weather pattern showed signs of weakening but still produced enough rains to get winter crops off to a reasonably good start in Australia. Rains have also drenched Thailand's main rice and rubber growing regions.

Rains have fallen in Australia's wheat, barley and canola regions after dry weather in April when planting started. But the outlook for coming months is less certain as the rain-inducing La Nina effect has started to weaken.

"La Nina has declined very quickly and the next update (in a couple of weeks' time) will be a slightly less rosy picture," said David Jones, head of climate analysis at the weather bureau's National Climate Centre.

But there is still a reasonable likelihood of wet periods, said Jones, adding that recent rain through northeast Australia was tracking along with the forecasts.

La Nina, or 'Little Girl' in Spanish, is an unusual cooling of Pacific Ocean surface temperatures that typically brings rain to eastern and northern Australia and to Southeast Asia.

"We expect wet weather to hit Thailand's south which would bring about heavy rains and floods over the next week," said Suparerk Tansriratanawong, director general of Thailand's Meteorological Department

Thailand's south is the country's main rubber growing areas. Heavy rains were also expected in the rice growing regions but there are no fears of damage. Thailand is the world's largest producer of rubber and rice.

In neighbouring Indonesia, heavy rains sparked fears that vascular-streak dieback, a deadly fungal disease, will spread further in the cocoa growing island of Sulawesi. Meteorology officials expect the dry season to begin in parts of Indonesia in July and August. (With reporting by Mayank Bhardwaj in New Delhi, Apornrath Phoonphongphiphat in Bangkok, Fitri Wulandari in Jakarta and Michael Byrnes in Sydney; Editing by Ben Tan)


Story by Lewa Pardomuan


REUTERS NEWS SERVICE