Hot, dry weather in the U.S. cornbelt and parts of Russian wheat growing areas and neighboring countries have attracted attention, but a less active than normal monsoon rainy season in India should also be closely watched. Rains for the June and July period have been 81 percent of the long-term average for the entire country and led to reduced planting of summer crops. The early August forecast from the India Meteorological Department is for rainfall for the entire June to September monsoon season to be less than 90 percent of average.

Monsoon season provides on average 70 percent of India’s annual rainfall.  About 55 percent of India’s cropland depends on rainfall, and rain on irrigated croplands improves yields and lowers operating costs.  India is divided into four geographical regions – Northwest, Central, South Peninsula and East and Northeast India.  The Northwest region is normally the driest area of the country and this year has received the smallest percentage of normal monsoon rains, but rains have improved recently. The East and Northeast is a wetter region and has had the closest to normal rains.  The Central and South Peninsula regions are normally wet and have been significantly drier than normal, but the Central region has been receiving more rain lately.

The U.S. Agricultural Attaché reported in late July that summer crop plantings were down 9 percent from normal plantings for that time of year.  The biggest decline was in coarse grains, down 24 percent, to 24 million acres.  Rice is the largest summer crop with 37 million acres planted, down 6 percent.  Oilseed plantings of 27 million acres were almost normal.  Cotton plantings were 21 million acres, down 7 percent, and sugar cane plantings were up 11 percent at 13 million acres.

Cotton acreage is expected by the Attaché to be 26.2 million acres, down 13.0 percent from the record large 30.1 million acres last year.  The dry weather will likely limit production to 23.4 million bales (480 pounds each) compared to 26.5 million bales last year.  Exports for 2012/13 are projected at 4.2 million bales, down from 10.0 million bales in 2011/12 and 6.0 million bales in 2010/11.  Indian exports this year are 23.0 percent of world exports, and provide 60 percent of the 6.7 million bale increase in world cotton trade in 2011/12.

India has been a major player in the rice market this year as it moved excess inventories that have accumulated over several years with projections to export 8.0 MMT of rice, up from 4.6 MMT last year and 2.2 MMT each in 2008/09 and 2009/10.  It is expected to be the number one exporter this year accounting for 22.5 percent of world trade.  If production is smaller due to drought, the government will likely limit future exports until the availability of new crop supplies can the assessed.